EMERSON ELECTRIC (ASIA) LIMITED-ROHQ v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SECOND DIVISION EMERSON ELECTRIC (ASIA} CTA CASE NO. 8384 LIMITED-ROHQ, Petitioner, Members: - versus - CASTANEDA, JR., Chairperson, CASANOVA, and COTANGCO-MANALASTAS, 11. COMMISSIONER OF INTERNAL Promulgated: REVENUE, AUG 1 3 2015 Respondent. ,/ / 7 'f�,rv f�4f . x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x AMENDED DECISION CASTANEDA, JR., J.: Before this Court are (1) petitioner's Motion for Reconsideration (And to Reopen Trial for Reception of Additional Evidence}, filed on April 15, 2015, without respondent's comment despite due notice~ as per Records Verification dated May 20, 2015; and (2) respondent's Motion for Reconsideration, filed on April 16, 2015, with petitioner's Comment (To Respondent's Motion for Reconsideration dated 16 April 2015}, filed on May 19, 2015. Both petitioner and respondent seek reconsideration of the Court's Decision dated March 31, 2015, the dispositive portion of which reads as follows: "WHEREFORE, premises considered, the instant Petition for Review is hereby PARTIALLY GRANTED. Accordingly, respondent is hereby ORDERED TO REFUND or TO ISSUE A TAX CREDIT CERTIFICATE ft--

AMENDED DECISION CTA CASE NO. 8384 in favor of petitioner in the amount of P852,298.76 representing its excess unutilized input taxes for the period covering October 1, 2009 to December 31, 2009 or the 1st quarter of fiscal year ending September 30, 2010." SO ORDERED."1 On petitioner's Motion for Reconsideration A. There is no cogent reason to re-open trial for reception of additional evidence. Petitioner prays that this case be re-opened for the purpose of submitting the properly issued certified true copies of official receipts and invoices, hence, it asks for the relaxation of the rules of procedure, citing the principle enunciated in the Philippine National Bank v. Commissioner ofInternal Revenue (Philippine National Bank case). We now re-examine the Philippine National Bank case, where the Supreme Court cited the ruling in Suarez v. Judge Villarama, Jr.3, to wit: "It is an accepted tenet that rules of procedure must be faithfully followed except only when, for persuasive and weighting reasons, they may be relaxed to relieve a litigant of an injustice commensurate with his failure to comply with the prescribed procedure. Concomitant to a liberal interpretation of the rules of procedure, however, should be an effort on the part of the party invoking liberality to adequately explain his failure to abide by the rules." 4 Based on the foregoing, the Court may only relax the rigid application of the rules of procedure upon showing of compelling and persuasive reasons. In the instant case, petitioner neither advanced ~ 1 Docket, p. 2324. 2 G.R. No. 172458, December 14, 2011, 662 SCRA 424. 3 G.R. No. 124512, June 27, 2006, 493 SCRA 74. 4 Ibid.

AMENDED DECISION CTA CASE NO. 8384 any justifiable reason nor adequately explained the circumstances for its failure to submit the certified true copies of the official receipts and invoices. It simply invoked the liberal application of rules without providing any cogent reason for the application of the exception. While a party may believe that it has a meritorious legal defense, this must be weighed against the need to halt an abuse of the flexibility of procedural rules. It is well established that faithful compliance with the Rules of Court is essential for the prevention and avoidance of unnecessary delays and for the organized and efficient dispatch of judicial business.5 In the case of Luzon Hydro Corporation v. Commissioner of Internal Revenue,6 the Supreme Court denied the party's prayer to remand the case before the CTA to enable it to present evidence consisting of VAT official receipts. It held: xxx Verily, the Court has emphasized in Atlas Consolidated Mining and Development Corporation v. Commissioner of Internal Revenue that a judicial claim for tax refund or tax credit brought to the CTA is by no means an original action but an appeal by way of a petition for review of the taxpayer's unsuccessful administrative claim; hence, the taxpayer has to convince the CTA that the quasi-judicial agency a quo should not have denied the claim, and to do so the taxpayer should prove every minute aspect of its case by presenting, formally offering and submitting its evidence to the CTA, including whatever was required for the successful prosecution of the administrative claim as the means of demonstrating to the CTA that its administrative claim should have been granted in the first place. Nonetheless, on the proposition that we may relax the stringent rules of procedure for the sake of rendering justice, we still hold that the concept of newly discovered evidence may not apply herein. In order that newly discovered evidence may be a ground for allowing a new)*- 5 Philippine National Bank v. Commissioner ofInternal Revenue, G.R. No. 172458, December 14, 2011. 6 G.R. No. 188260, November 13, 2013, 709 SCRA 462.

AMENDED DECISION CfA CASE NO. 8384 trial, it must be fairly shown that: (a) the evidence is discovered after the trial; (b) such evidence could not have been discovered and produced at the trial even with the exercise of reasonable diligence; (c) such evidence is material, not merely cumulative, corroborative, or impeaching; and (d) such evidence is of such weight that it would probably change the judgment if admitted. The first two requisites are not attendant. To start with, the proposed evidence was plainly not newly discovered considering the petitioner's admission that its former Finance and Accounting Manager had misplaced the VAT official receipts. If that was true, the misplaced receipts were forgotten evidence. And, secondly, the receipts, had they truly existed, could have been sooner discovered and easily produced at the trial with the exercise of reasonable diligence. But the petitioner made no convincing demonstration that it had exercised reasonable diligence. The Court cannot accept its tender of such receipts and return now, for, indeed, the non-production of documents as vital and material as such receipts and return were to the success of its claim for refund or tax credit was improbable, as it goes against the sound business practice of safekeeping relevant documents precisely to ensure their future use to support an eventual substantial claim for refund or tax credit. (Emphases supplied) Applying the foregoing, the Court cannot relax the rules of procedure for reasons discussed above. B. Petitioner was able to establish the twenty nine (29) foreign clients were indeed doing business outside the Philippines, hence, the refundable VAT was r input accordingly adjusted.

AMENDED DECISION CTA CASE NO. 8384 Petitioner posits that it rendered services to additional twenty- nine (29) clients considered as zero-rated transactions. Petitioner likewise avers that it submitted various documents that would establish that it rendered services to clients doing business outside the Philippines. Petitioner insists that its zero-rated sales amounted to P337,337,536.29, thus, the refundable input VAT should be recomputed into a total amount of P1,963,018.36. Petitioner enumerates the various exhibits, which the Court allegedly omitted in the assailed Decision, denominated as Certificates of Foreign Registration/Incorporation, Articles of Association/Incorporation, and Tax Residency/Payment Certificates that would establish that its twenty-nine (29) foreign clients are doing business outside the Philippines. Thus, petitioner prays that the sales made to these entities covered by eighty six (86) invoices be reconsidered as zero-rated sales. Upon careful re-examination of the records of the case, the Court reconsiders its earlier findings. We reiterate the requisites in order for the supply of services to be VAT zero-rated under Section 108 (B)(2) of the National Internal Revenue Code (NIRC) of 1997, as amended, to wit: (1) the services must be other than processing, manufacturing, or repacking of goods; (2) the payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations; and (3) the recipient of such services must be doing business outside the Philippines.7 The Court found petitioner to have fully met the first and second requisites. However, with reference to the third requisite, it was ruled that only those clients of petitioner with Securities and Exchange Commission (SEC) Certificates of Non-registration and Certificates of Registration or Incorporation in a foreign country are considered to have complied with the said requisite. Based on the assailed Decision, out of the declared zero-rated sales/receipts for the first quarter of fiscal year (FY) ending September 30, 2010, i.e., from October 1, 2009 to December 31, 2009, in the amount of~ 7 Page 12 of the Decision dated March 31, 2015, docket, p. 2310, citing Commissioner ofInternal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., G.R. No. 153205, January 2, 2007, 512 SCRA 124.

AMENDED DECISION CTA CASE NO. 8384 P487,383,178.988, only the amount of P215,816,767.89 may be considered as zero-rated. After considering petitioner's arguments and upon scrutiny of the records, petitioner was able to sufficiently establish that the additional twenty nine (29) foreign clients are indeed foreign entities doing business outside the Philippines. The supporting documents are as follows: Certificate of Foreign SEC Registration/Incorporation; Certificate of Articles of Non- Association/Incorporation; Service Registration Tax Residency Certificate/Tax Contract Client Name (Exhibit) Payment Certificate (Exhibit) (Exhibit) A. With SEC Certificate ofNon-registration, Certificate ofRegistration or Incorporation in Foreign Country and Service Contract with petitioner 1 Emerson Climate Technologies (Hong Kong) us yB yB-1 KK Emerson Network Power Connectivity n 2 Solutions M6 G9 G9-1 3 Emerson Japan Ltd. H6 H9 H9-1 to H9-3 uu 4 Emerson Network Power S.R.L. N6 I 9 I 9-1 w 5 Emerson Network Power Ltd. (UK) 06 J9 J9-1 to J9-6 ww 6 Emerson Power Transmission R6 L9 L9-1 to L9-2 XX 7 Emerson Process Management (Australia) rG N9 N9-1 to N9-2 yy 8 Emerson Process Management Flow B.V. w6 0 9 0 9-1 AAA Emerson Process Management Shared z6 9 Services Ltd. Q9 Q9-1 to Q9-4 CCC 10 Emerson Tool Company cl FlO F10_1 DDD 11 Fisher Rosemount Systems Inc. F7 59 59-1 EEE 12 Fusite Gl Tg FFF 13 InSinkErator e ug GGG 14 Instrument & Valve Services Company i ~ V9-1 HHH 15 Intermetro K7 W9 W9-1 III 16 Kato Enqineerinq, Inc. L7 X9 X9-1 JJJ 17 KNAACK L.L.C. M7 Y9 Y9-1 to Y9-2 KKK 18 Liebert Corporation N7 Z9 Z9-1 LLL 19 Liebert Services 07 A10 A10-1 MMM 20 LLLP Corporate Headquarters p7 610 610-1 NNN 21 Micro Motion Inc. ccccc c c 10 10-1 000 22 Regulator Technologies Inc. GGGGG HlO H10_1 ppp 23 Ridge Tool Company FFFFF D10 0 10-1 QQQ 24 Therm-o-Disc BBBBB Elo Elo_1 to Elo_2 RRR Emerson Network Power - Energy Systems, p6 sss 25 N.A. Inc. K9 K9-1 Emerson Process Management Valve GlO 26 Automation Inc. A7 TTI B. With SEC Certificate ofNon-registration and Certificate ofRegistration or Incorporation or Certification by Taxing Authority in Foreign Country 8 Exhibit "J".

AMENDED DECISION CTA CASE NO. 8384 Emerson Process Management-Power & Water 56 M9 M9-1 1 Solution p9 p9-1 Rg Emerson Process Management GMBH & Co. x6 2 OHG Argelsri 3 EPM Process Systems & Solutions D7 As such, petitioner's receipts derived from services rendered to the aforementioned entities in the amount of P121,107,993.70 may qualify for VAT zero-rating pursuant to Section 108(8)(2) of the NIRC of 1997, as amended. Below is the breakdown of the amount of P121,107,993.70: Invoice Invoice Amount in Exchange No. Date Client 1284 USD Rate Amount in Php Emerson Climate 1289 10/28/2009 1 Technologies (HK) 1290 10/28/2009 6 177.15 47.61905 294 150.01 Emerson Power 10/28/2009 2 Transmission 1292 3 308.96 47.61905 157 569.53 10/28/2009 8 488.50 47.61905 404,214.31 3 Emerson Tool Company 1293 Emerson Network 1296 10/28/2009 9 443.93 47.61905 449,710.97 Power Connectivity 1298 10/28/2009 1301 10/28/2009 41 070.95 47.61905 1 955,759.62 4 Solutions 10/28/2009 7 617.40 47.61905 362,733.35 Emerson Network 1303 193 242.39 Power Energy 1305 10/28/2009 4,058.09 47.61905 924,607.19 10/28/2009 5 Systems N.A. Inc. 1306 19 416.75 47.61905 1308 10/28/2009 6 Emerson Japan Ltd. 10/28/2009 21,489.11 47.61905 1 023 291.00 Emerson Network 1309 10,744.87 47.61905 511,660.50 1311 10/28/2009 7 Power SRL 1312 10/28/2009 1,877.90 47.61905 89 423.81 Emerson Network 1314 10/28/2009 1,328.24 47.61905 63 249.53 1315 10/28/2009 8 Power Ltd. (UK) 1316 10/28/2009 136 907.07 47.61905 6 519 384.61 Emerson Process 1317 10/28/2009 Management 1318 10/28/2009 2 340.82 47.61905 111467.62 1319 10/28/2009 4 555.57 47.61905 216 931.92 9 (Australia) 1320 10/28/2009 4,955.26 47.61905 235,964.77 Emerson Process 1321 10/28/2009 10/28/2009 27 420.57 47.61905 1 305 741.49 10 Management Flow B.V. 32 936.01 47.61905 1 568 381.51 Emerson Process 47.61905 Management GMBH & 6,493.90 47.61905 309 233.35 14,799.51 47.61905 704 738.61 11 Co.OHG 145,531.46 47.61905 6 930 069.87 EPM Process Systems & 82,432.16 47.61905 3 925 341.15 12 827.29 610 823.36 12 Solutions Emerson Process Management Shared 13 Services Ltd. Fisher Rosemount 14 Systems Inc. 15 Fusite 16 InSinkErator Instrument and Valve 17 Services Company 18 Intermetro 19 Kato Engineering Inc. 20 Knaack LLC 21 Liebert Corporation 22 Liebert Services 23 LLLP Corporate

AMENDED DECISION CTA CASE NO. 8384 Headquarters 1324 10/28}2009 38,852.23 47.61905 1850 106.28 1325 10/28/2009 2 324 818.21 24 Micro Motion Inc. 1326 10/28/2009 48,821.18 47.61905 Regulator Technologies 1332 10/28/2009 16,749.99 47.61905 797,618.61 1350 11/24/2009 36,045.62 47.61905 1 716 458.18 25 Inc. 1358 11/24/2009 8 348.12 46.59832 389,008.37 26 Ridge Tool Company 1365 11/24/2009 207 615.35 46.59832 9 674 526.52 27 Therm-o-disc 1366 11/24/2009 Emerson Climate 1368 11/24/2009 9 559.83 46.59832 445 472.02 1369 11/24/2009 6 390.84 46.59832 297,802.41 28 Technologies (HK) 228,440.34 Emerson Network 1370 11/24/2009 4 902.33 46.59832 1 249,416.06 Power Pty. Ltd. 1371 11/24/2009 26 812.47 46.59832 2 306 531.10 29 (Australia) 1372 11/24/2009 252,697.56 Emerson Network 49 498.16 46.59832 Power Connectivity 1373 11/24/2009 5 422.89 46.59832 (20 780.99) 1376 11/24/2009 30 Solutions (445.96) 46.59832 1 086 534.43 1377 11/24/2009 524 778.63 31 Emerson Japan Ltd. 23 317.03 46.59832 Emerson Network 1379 11/24/2009 11,261.75 46.59832 87 914.25 32 Power SRL 1380 11/24/2009 1 886.64 46.59832 6 299 693.98 Emerson Network 1382 11/24/2009 1383 11/24/2009 135/191.44 46.59832 562 818.24 33 Power Ltd. (UK) 1384 11/24/2009 302 990.20 Emerson Network 1385 11/24/2009 12 078.08 46.59832 Power Energy 1388 11/24/2009 6,502.17 46.59832 84 943.61 1389 11/24/2009 109 636.06 34 Systems N.A. Inc. 1390 11/24/2009 1,822.89 46.59832 209 935.68 Emerson Power 1391 11/24/2009 268 448.73 1392 11/24/2009 2,352.79 46.59832 1435 913.25 35 Transmission 1393 11/24/2009 4,505.22 46.59832 1 658 472.42 Emerson Process 1394 11/24/2009 5,760.91 46.59832 332 582.46 Management- Power & 1395 11/24/2009 923 672.37 1398 11/24/2009 30 814.70 46.59832 7 441 246.11 36 Water Solution 35 590.82 46.59832 4 365 478.33 Emerson Process 46.59832 670 092.70 Management 7 137.22 46.59832 1 792 151.82 19 822.01 46.59832 37 (Australia) 159,689.15 46.59832 Emerson Process 93 683.17 38 Management Flow B.V. 14 380.19 46.59832 Emerson Process 38,459.58 46.59832 Management GMBH & 39 Co. OHG Emerson Process Management Shared 40 Services Ltd. Emerson Process Management Valve 41 Automation Inc. 42 Emerson Tool Company EPM Process Systems & 43 Solutions Fisher Rosemount 44 Systems Inc. 45 Fusite 46 InSinkErator Instrument and Valve 47 Services Company 48 Intermetro 49 Kato Engineering Inc. 50 Knaack LLC 51 Liebert Corporation 52 Liebert Services LLLP Corporate 53 Headquarters 54 Micro Motion Inc.

AMENDED DECISION CfA CASE NO. 8384 Regulator Technologies 1400 11/24/2009 54,701.30 46.59832 2 548 988.68 55 Inc. 1401 11/24/2009 28 670.54 46.59832 1 335 999.00 1406 11/24/2009 40,379.88 46.59832 1 881 634.57 56 Ridge Tool Company 1421 12/22/2009 8,606.50 46.94836 404 061.06 57 Therm-o-disc 1435 Emerson Climate 1436 12/22/2009 10,890.13 46.94836 511 273.74 1438 12/22/2009 5,278.82 46.94836 247 831.94 58 Technologies (HK) 1439 12/22/2009 224 264.33 Emerson Network 12/22/2009 4,776.83 46.94836 913 275.65 Power Connectivity 1440 1441 19,452.77 46.94836 59 Solutions 1442 12/22/2009 47,711.74 46.94836 2 239 987.95 60 Emerson Japan Ltd. 1445 12/22/2009 7,789.63 46.94836 365 710.35 Emerson Network 1446 12/22/2009 23 340.80 46.94836 1 095 812.28 61 Power SRL 12/22/2009 10 861.57 46.94836 509 932.90 Emerson Network 1448 12/22/2009 1,566.43 46.94836 73 541.32 62 Power Ltd. (UK) 1449 Emerson Network 1451 12/22/2009 140,749.59 46.94836 6 607 962.42 Power Energy Systems 1452 1456 12/22/2009 12 636.18 46.94836 593 247.93 63 N.A. Inc. 1457 12/22/2009 6 267.48 46.94836 294 247.91 Emerson Power 1459 1460 12/22/2009 1 281.09 46.94836 60 145.07 64 Transmission 1461 Emerson Process 1462 12/22/2009 5,348.27 46.94836 251 092.51 Management 1463 12/22/2009 6 361.28 46.94836 298 651.66 1464 12/22/2009 5 565.80 46.94836 261 305.18 65 (Australia) 1465 Emerson Process 1466 12/22/2009 31 870.28 46.94836 1,496,257.38 1467 12/22/2009 9 925.24 46.94836 465 973.74 66 Management Flow B.V. 1469 12/22/2009 7 836.92 46.94836 367 930.54 Emerson Process 1470 12/22/2009 46.94836 801 090.66 Management GMBH & 1475 12/22/2009 17 063.23 46.94836 12/22/2009 149 041.95 46.94836 6 997 275.12 67 Co.OHG 91153.82 4,279,522.36 Emerson Process Management Shared 12/22/2009 12 261.18 46.94836 575 642.29 12/22/2009 38 368.26 46.94836 1 801,326.88 68 Services Ltd. Emerson Process 12/22/2009 50 194.54 46.94836 2,356,551.33 Management Valve 12/22/2009 21 340.88 46.94836 1,001,919.32 12/22/2009 36 389.54 46.94836 1,708,429.22 69 Automation Inc. 2,576,732.75 121,107,993.70 70 Emerson Tool Company EPM Process Systems & 71 Solutions Fisher Rosemount 72 Systems, Inc. 73 Fusite 74 InSinkErator Instrument and Valve 75 Services Company 76 Intermetro 77 Kato Engineering Inc. 78 Knaack LLC 79 Liebert Corporation 80 Liebert Services LLLP Corporate 81 Headquarters 82 Micro Motion Inc. Regulator Technologies 83 Inc. 84 Ridge Tool Company 85 Therm-o-disc TOTAL

AMENDED DECISION CTA CASE NO. 8384 The Court, in the assailed Decision, initially considered the amount of P215,816,767.899 as petitioner's zero-rated receipts for the first quarter of fiscal year (FY) ending September 30, 2010. However, after considering the foregoing, petitioner's aggregate receipts that may qualify for VAT zero-rating amount to P336,924,761.59 (P215,816,767.89 plus P121,107,993.70). However, petitioner must substantiate its zero-rated receipts by proper VAT zero-rated official receipts (ORs) in accordance with Sections 113(A)(2) and (B) of the NIRC of 1997, as amended, which provide as follows: SEC. 113. Invoicing and Accounting Requirements for VAT-Registered Persons.- (A) Invoicing Requirements.-A VAT-registered person shall issue: (1) A VAT invoice for every sale, barter or exchange of goods or properties; and (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. (B) Information Contained in the VAT Invoice or VAT Official Receipt-=The following information shall be indicated in the VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his Taxpayer's Identification Number (TIN); (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax: xxx XXX XXX XXX )k- 9 Page 19 of the Decision dated March 31, 2015, docket, p. 2317.

AMENDED DECISION CTA CASE NO. 8384 (3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and (4) In the case of sales in the amount of One thousand pesos (Pl,OOO) or more where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and Taxpayer Identification Number (TIN) of the purchaser, customer or client. (Emphases supplied) The Court-commissioned Independent Certified Public Accountant (ICPA) reported the following findings with regard to petitioner's zero-rated receipts for the first quarter of FY ending September 30, 2010: Findings Amount a) Gross receipts from zero-rated sales supported by ORs and p 394,950,723.28 invoices10 89,973,369.59 b) Gross receipts from zero-rated sales supported by invoices11 c) Gross VATable sales subject to 12% included in gross receipts from 2,459,087.10 p 487,383,179.97 zero-rated sales12 TOTAL An examination of the ICPA report13 and the related supporting documents reveals that the following zero-rated receipts were not properly substantiated and should be disallowed: Client Invoice Invoice Amount in Exchange Amount in PhP No. Date USD Rate 20,443,349.59 1. Found to be supported by invoices on/J per /CPA Report Annex 8-2 47.61905 118 122.08 46.59832 Emerson Electric Asia-Pacific 1336 10/28/2009 429 310.32 46.59832 23,343 112.47 46.59832 232 240.44 Air Comfort Products 1337 11/24/2009 2 534.90 46.59832 1,829,479.40 Emerson Electric Asia-Pacific 1352 11/24/2009 500 943.22 46.59832 1,298 855.48 Emerson Hermetic Motors 1357 11/24/2009 4 983.88 Emerson Network Power 1361 11/24/2009 39 260.63 1363 11/24/2009 27 873.44 (Malaysia) SDN BHD Emerson Network Power (Singapore) Pte. Ltd. Instrument and Valve 1315 10/28/2009 10 Exhibit Z7, Annex B-1. 11 Exhibit Z7, Annex B-2. 12 Exhibit Z7, Annex B-3. 13 Exhibit Z7�

AMENDED DECISION CfA CASE NO. 8384 Services Company 27,420.57 47.61905 1,305, 741.49 Intermetro 1316 10/28/2009 32 936.01 47.61905 1 568 381.51 1318 10/28/2009 14 799.51 47.61905 704,738.61 Knaack LLC 1321 LLLP Corporate 1324 10/28/2009 12 827.29 47.61905 610,823.36 1325 10/28/2009 38 852.23 47.61905 1 850 106.28 Headquarters 1366 10/28/2009 48 821.18 47.61905 2 324 818.21 1371 11/24/2009 46.59832 Micro Motion Inc. 6 390.84 297,802.41 1372 11/24/2009 Regulator Technologies Inc. 1373 5 422.89 46.59832 252,697.56 1376 Emerson Japan Ltd. 11/24/2009 (445.96) 46.59832 (20 780.99) Emerson Power 1377 11/24/2009 23 317.03 46.59832 1 086,534.43 11/24/2009 11 261.75 46.59832 Transmission 1380 524,778.63 Emerson Process 1385 1389 11/24/2009 1 886.64 46.59832 87,914.25 Management Power & 1391 Water Solution 1392 11/24/2009 12 078.08 46.59832 562,818.24 Emerson Process 1398 11/24/2009 4 505.22 46.59832 209,935.68 Management (Australia) 1463 Emerson Process 11/24/2009 30 814.70 46.59832 1 435,913.25 Management Flow B.V. 11/24/2009 7 137.22 46.59832 332,582.46 Emerson Process 11/24/2009 46.59832 923,672.37 Management GMBH & Co. 11/24/2009 19 822.01 46.59832 OHG 12/22/2009 38 459.58 46.94836 1 792,151.82 Emerson Process 17 063.23 801 090.66 Management Valve Automation Inc. 1,358,276.41 63,916,879.69 Fusite Instrument and Valve Services Company Kato Engineering Inc. Knaack LLC Micro Motion Inc. Knaack LLC Sub-total 2. As found by the Court ORs were not issued in the name of the client in the corresponding invoice Alber Corporation 1271 10/28/2009 1 654.73 47.61905 78,796.67 ASCO Numatics 1272 10/28/2009 17 123.41 47.61905 815 400.52 Closetmaid 1276 10/28/2009 11 085.69 47.61905 527 890.03 EGS Electrical Group 1279 10/2812009 2 676.33 47.61905 127 444.29 Electric Reliability Services 1280 10/28/2009 4 815.86 47.61905 229,326.68 Emerson Electric Co. 1335 10/28/2009 635 415.03 47.61905 30 257,860.08 Alber Corporation 1338 11/24/2009 2 777.27 46.59832 129,416.12 ASCO Numatics 1339 11/24/2009 19 914.86 46.59832 927,999.02 Closetmaid 1343 11/24/2009 13 821.27 46.59832 644,047.96 EGS Electrical Group 1346 11/24/2009 6 534.30 46.59832 304,487.40 Electric Reliability Services 1347 11/24/2009 5 897.30 46.59832 274,804.27 Emerson Electric Co. 1353 11/24/2009 731 760.23 46.59832 34 098,797.36 Alber Corporation 1409 12/22/2009 2 714.50 46.94836 127,441.32 ASCO Numatics 1410 12/22/2009 25 464.17 46.94836 1 195,501.02 EGS Electrical Group 1417 12/22/2009 4 901.51 46.94836 230,117.86 Electric Reliability Services 1418 12/22/2009 5 492.51 46.94836 257,864.34 Emerson Climate 1284 10/28/2009 6 177.15 47.61905 294,150.01 1289 10/28/2009 3 308.96 47.61905 157,569.53 Technologies (HK) Emerson Power Transmission Emerson Tool Company 1290 10/28/2009 8 488.50 47.61905 404,214.31

AMENDED DECISION erA CASE NO. 8384 Emerson Process 1305 10/28/2009 10,744.87 47.61905 511 660.50 Management Flow B.V. 1306 10/28/2009 1,877.90 47.61905 89 423.81 Emerson Process 1308 10/28/2009 1,328.24 47.61905 63 249.53 Management GMBH & Co. OHG 1309 10/28/2009 136,907.07 47.61905 6 519 384.61 1312 10/28/2009 4,555.57 47.61905 216 931.92 EPM Process Systems & 1319 10/28/2009 47.61905 Solutions 1320 10/28/2009 145 531.46 47.61905 6 930 069.87 1350 82 432.16 3 925 341.15 Emerson Process 1383 11/24/2009 Management Shared 1393 8,348.12 46.59832 389 008.37 Services Ltd. 1395 11/24/2009 1400 11/24/2009 1,822.89 46.59832 84 943.61 Fusite 1421 159,689.15 46.59832 7 441 246.11 1441 11/24/2009 Liebert Corporation 1445 11/24/2009 14,380.19 46.59832 670 092.70 54 701.30 46.59832 2 548 988.68 Liebert Services 1446 12/22/2009 Emerson Climate 8 606.50 46.94836 404 061.06 1449 12/22/2009 Technologies (HK) 1451 7,789.63 46.94836 365 710.35 EPM Process Systems & 1452 12/22/2009 1457 10 861.57 46.94836 509 932.90 Solutions 1460 1464 12/22/2009 1,566.43 46.94836 73 541.32 Liebert Corporation 1465 LLLP Corporate 1466 12/22/2009 12 636.18 46.94836 593 247.93 1469 12/22/2009 6 267.48 46.94836 294 247.91 Headquarters 12/22/2009 1,281.09 46.94836 60 145.07 Regulator Technologies Inc. 12/22/2009 6,361.28 46.94836 298 651.66 Emerson Climate 12/22/2009 31 870.28 46.94836 1496 257.38 Technologies (HK) 12/22/2009 149 041.95 46.94836 6,997 275.12 Emerson Power 12/22/2009 91153.82 46.94836 4,279 522.36 Transmission 12/22/2009 12 261.18 46.94836 575 642.29 Emerson Process 12/22/2009 50 194.54 46.94836 2,356 551.33 Management Flow B.V. 2,522,234.43 118,778,256.33 Emerson Process 3,880,510.84 182,695,136.02 Management GMBH & Co. OHG Emerson Process Management Valve Automation Inc. Emerson Tool Company EPM Process Systems & Solutions Fusite Instrument and Valve Services Company Liebert Corporation Liebert Services LLLP Corporate Headquarters Regulator Technologies Inc. Sub-total TOTAL Moreover, the Court finds that the following zero-rated receipts in the amount of $114,544.14 were not supported by official receipts: Exhibit Invoice Invoice OR OR Amount Difference DDDDDDDD-26 & No. Amount in Number inUSD 10 413.31 DDDDDDDD-26a 1297 USD 21438.70 31 852.01 1250

AMENDED DECISION CTA CASE NO. 8384 DDDDDDDD-56 & 1343 13 821.27 1724 11 896.00 1 925.27 1359 163 495.31 1599 163 345.96 149.35 DDDDDDDD-56a 1414 1605, 1301 12 173.23 1574 10 170.82 2 002.41 DDDDDDDD-68 & 1314 19 416.75 1522 13 663.56 5 753.19 1358 1319 3 024.82 DDDDDDDD-68a 1379 4 955.26 1589 1 930.44 1388 207 615.35 1565 207 595.73 19.62 DDDDDDDD-102 & 1394 135,191.44 1782 125 160.20 10 031.24 1401 1547 DDDDDDDD-102a to -102b 1448 5 760.91 1608 88.82 5 672.09 93 683.17 1565 50 273.00 43 410.17 DDDDDDDD-30 & 28 670.54 12 117.26 16 553.28 140 749.59 125 160.20 15 589.39 DDDDDDDD-30a 857,384.83 742,840.69 114,544.14 DDDDDDDD-43 & DDDDDDDD-43a DDDDDDDD-67 & DDDDDDDD-67a DDDDDDDD-77 & DDDDDDDD-77a DDDDDDDD-84 & DDDDDDDD-84a DDDDDDDD-87 & DDDDDDDD-87a DDDDDDDD-91 & DDDDDDDD-91a DDDDDDDD-135 & DDDDDDDD-135b TOTAL Using the foreign currency exchange rate on the invoice date per petitioner's Schedule of Zero-Rated Sales, 14 the foregoing zero- rated receipts which are not supported by VAT zero-rated ORs amounted to P5,363,311.47, thus: Client Invoice No. Amount in Exchange Amount in Emerson Network Power USD Rate PhP (Malaysia) SDN BHD 1297 1343 10 413.31 47.61905 495 871.93 Closetmaid 1 925.27 46.59832 89,714.35 Emerson Network Power (Hong 1359 Kong) Co. Ltd. 1414 149.35 46.59832 6 959.46 2 002.41 46.94836 94,009.87 Closetmaid 1301 Emerson Network Power Ltd. 1314 5 753.19 47.61905 273 961.44 (UK) 3 024.82 47.61905 144 039.05 1358 InSinkErator 19.62 46.59832 914.26 Emerson Network Power Pty. 1379 Ltd. (Australia) 1388 10 031.24 46.59832 467 438.93 Emerson Process Management 1394 5 672.09 46.59832 264 309.86 Shared Services Ltd. 1401 46.59832 2 022,840.99 43 410.17 46.59832 771 355.04 InSinkErator 1448 16 553.28 731 896.29 Liebert Services 15 589.39 46.94836 5 363,311.47 Ridge Tool Company 114,544.14 Emerson Process Management Shared Services Ltd. TOTAL 14 Exhibit CCCCCCCC-1.

AMENDED DECISION CfA CASE NO. 8384 Thus, petitioner's adjusted substantiated zero-rated receipts for the first quarter of FY ending September 30, 2010 is P148,866,314.10, computed as follows: Gross recei!)ts considered to be zero-rated p 63,916,879.69 p 336,924,761.59 Less: Disallowances 118,778 256.33 188,058,447.49 Supported by Invoices only 5,363,311.47 P148,866,314.10 Official receipts not Issued In the name of the client In the corresponding Invoice Not supported by official receipts Substantiated zero-rated receipts Inasmuch as only a portion of petitioner's zero-rated receipts is substantiated, only the portion of the input tax claimed attributable thereto will be refunded. The rate to be applied is 30.5440�/o, computed as follows: Substantiated zero-rated receipts p 148,866,314.10 487,383,178.98 Divided by total zero-rated receipts, per VAT returns p 30.5440�/o Rate of substantiated zero-rated receipts In fine, petitioner has proven that it is entitled to a refund or an issuance of tax credit certificate for its excess unutilized input taxes for the first quarter of FY ending September 30, 2010 in the adjusted amount of P866,276.08, computed as follows: Substantiated input taxes p 2,836,157.9515 Portion of substantiated zero-rated sales X 30.5440% Refundable input taxes p 866,276.08 On respondent's Motion for Reconsideration Respondent, on the other hand, alleges that petitioner failed to prove the latter's submission of complete documents in support of the administrative claim for refund. As such, the period of 120 days will not commence to run. Respondent further asserts that petitioner failed to comply with the invoicing and accounting requirements. Respondent points out that the VAT invoices or official receipts should include not only the name of the taxpayer but also the TIN number, registered address, and business style.~ 15 Page 26 of the Decision dated March 31, 2015, docket, p. 2324.

AMENDED DECISION CTA CASE NO. 8384 It is noteworthy that the issues regarding the timeliness of the filing of the Petition for Review and the invoicing requirements have already been passed upon extensively by the Court in the assailed Decision. WHEREFORE, petitioner's Motion to Reopen Trial for Reception of Additional Evidence is DENIED. Further, petitioner's Motion for Reconsideration of the Decision is PARTIALLY GRANTED and the assailed Decision promulgated on March 31, 2015 is MODIFIED. Accordingly, respondent is ORDERED TO REFUND OR ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the amount of P866,276.08 representing its excess unutilized input taxes for the period covering October 1, 2009 to December 31, 2009 or the 1st quarter of fiscal year ending September 30, 2010. Meanwhile, respondent's Motion for Reconsideration is DENIED. SO ORDERED. WE CONCUR: ~J!t, c .a.,r--~~ ~ CAES~SANOVA fuANI'TO C. CASTANEDA:Jtr.. Associate Justice Associate Justice AMELIA R. COTANGCO-MANALASTAS Associate Justice

AMENDED DECISION CTA CASE NO. 8384 ATTESTATION I attest that the conclusions in the above Amended Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. <;k~ C. QJf-~~L ~ iOANITQ C. CASTAN ED~,~ JR. 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 Amended Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. Presiding Justice