CTA Case No. 4476 (Decision)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ZIPPY CO~~ERCIAL CORPOnATION, Pf't. J ti(')ner, - vers�Js - C.T.A. CASES NOS. 4476 & 4477 COMMISSIONER OF INTERNAL REVENUE, RP !'\ r�fHHIPnt. X- - - - - - - - - - - - - - X D E c:; X N These are two ( ? ) r onsnlirl At ed r~ses <CTA Ca~es Nos. 4476 & 4477) concerninq c laims for refund of value-added tax al.le~1e ci h"l be Pt~t�o neously paid to t'esponde nt in the amount of PlRO,OOO coverinq CAse No. 4476 and P163 , 636.36 for the Case No. 4477. In add it jon , a t' efund fot' the s um o f P900,000 t'ept'esentinq P.><c i se ta x raid on lo ca lly petitioner IJndPr r: 1n l ' l'lc;,? No. '+'07 . As bot'ne out hy the pleading and evidence presented, petit i o net~ is a newly dom~~ti c cornnr4tlnn and is engaged in the business of' buyinq locally m~nufactured ci garettes with fore ig n brands from lo ca l manufacturers for export to foreign buyers. Petjtioner is a reqistered VAT

DECIS ION CTA CASES NOS. 4476 & 4477 - 2- taxpayer' with the Bureau of Internal Revenue on Jan�Jat"'y 1, 1988 and as a new tt'ader r egist et'ed with the Board of Investments on Januat'Y 4, 1988 <Annexe!5 "A" & "B" Petition for Review, p. 4, CTA t"' cot"'d!';). The case at bAt' has beE;>n submitted fOl' decl~lon based on the pleadinqs and the records of the Bureau of Internal Revenue with the rartiec; !Submitting their t"'P.Rp~ctive memo r andum. It appears from the records of the case that petitioner' on Aug�.1st ;:.> '~ , 1988, put'ch ased from La Suerte Cigar ~nd Ci'lr:1t ' ~t; t.r->s F.:~r'tot'Y 450 cases of M<9.rlboro Cig;:n' e t te~ in t he AII!OWlt nf P1 , ROO, 000.00 with VAT included o n ttiP. 1nvoicP. v lue <Annex "C" Petltlon for ReviPw , CTA Ca"e No. 4'+76). Petitioner' on Augu st 31, 19B8 ~xp orted the 450 ca!5e!5 of Mar lbot'O Ci g r�-ptte<; t o Hongkong <Exhibit "A", BIR records) and t'PCe � vPd from Green Dragon Tt"'ading Company of Hongkong through <SolidBank) The Consolidl!ltf!d Bank &� h -ust Cor~pat'ation US~65,925.00 <pp. 6, 7 & 32 of BIR re r� ord s ). Petitioner, on N q �. �Pm hf>l~ 29, 19B8 filf:?rl a claim for refund o f the value-added tax in the amount of _P180, 000. 00 <Annex 11 D" Petition for Rev i P.w, p. 7, CTA Case which was denied by

DECISION CTR CASES NOS. 4476 & 4 477 3- � re�pondent i n a l etter d a ted January 2 5, 1990. Hence, petiti on e r appe a 1e d to th is c our t on Au gu st 1, 1990 and the case he r ei n wa s do c k eted as CTA C��� No. 4476. In the other c a se, CTA Case No. 4477, petitioner in the case a t bar f i l ed a claim fo r the refund of P163,636. 36 for al leged erroneous ly paid val ue-ad d ed tax, anr1 t hP su m o f P9 0 0, 000.00 exc ise t a x pay men t o n l oc ally ma nuf actu re d cig a r e tt es whi c h p e t it io ~er e xpor t e d to Hon g kon g. It appear s from t he l"~ ecords t hat petitioner wa� issued a permit by the res pond e nt on September 10, 1987, to purchase loc a l cigat~ et te Manufacturer � quant i t i e s o f cig.:n~et te s f o r e x port without prepayment of speci f ie tax <Exh. "J", p. 68(a)-69, BIR r e c ., fo l der 1 , CTA Ca� e No. 4477). Pet i ti on er on t h e bas is of sai d permit tried to purc h as e 4 50 c a ~ es o f Mat~ lbo t~ o Ki ng Cigat"' ett es from La Suert e Cigar a n d Cigarett e s Fact ory wit ho ut prepayment of s peci f i c tax but said company refused to sell to petitioner any quantity of cigarettes without prepayment of e xcise tax (p. 73 BIR recs., folder 1 , CTA Ca s e No. 4477>. On Novembe r 2 9, 1988 pet it i oner �ade a no th e t"' p u r c h ase of 450 c ases of Marlboro King Cigar ette s f rom the same manufacturer 340

DECISION CTA CASES NOS~ 4476 & 4477 - 4- for the same pu r ch As~ p r i c e o f Pl,BOO,OOO.OO inc: 1 u� 1 ve of the ~.Q - vp..!_9.J::.~I!I- tax in the amount of � P900, 000.00 and value- a dded tax in the amount of P163, 636.36 (p. 17, fold et' 1, BIR rec., CTA Case No. 4477). The records show th a t all o~ the 450 cases of Marlboro King Cigarettes were actual ly exported to Green Dragon Co. of Hong kong which generated forei g n ex c h n llR E? pa ym en t in the amount of f65,925.00 as c o nf i t' med by <SolidBank) The Con�olidated Bank and Tt' ust Cot' poration <pp. 13, 16, 21 and 22, foldet' 1, BI R t'ec., CTA Case No. 4477). Subsequently, in a letter dated December 21, 1988 petitionet' filed a claim for t~efund of the ad-valorem tax in the amo unt of P900,000.00; and in � separate 1e t t e r d at e d Apr i 1 3, 1989, the petitioner also filed a claim for refund of the value-added tax in the amount of P163, 636.36 <p. folder 1, BI R t~ec. , CTA Case No. 4477). Re�pondent in a letter decision dated May 22, 1990 denied the claim fot~ refund of the ad-valqre.J!!. tax of petition&r in the sum of P900,000.00 <Exh. 4, PP� 159, 160, foldet" 1, BIR rec., CTA Case No. 4477). Likewise, t'espondent den ied the clai M of petitioner for the t~efund of P163,636.36 repre�enting VAT payments in a l etter da ted January 34.1

DECISION CTA CASES NOS. 4476 & 4477 - 5- 25 , 1990 <p . 27, fold t' 11 , BIR t'ec. , CTA Case No. 4477). He c e th is appeal filed by petitioner on Au gust 1 , 1990 docket e d as CTA Case No. 4477. The iasues in the s e two case~ ar e a s fo llo ws r 1. Whether or not petitioner is e nti tl e d to e. Wh�ther or n ot p etiti oner, as export trad�r iB e xeMpt or entitled to the refund of Th e leg 1 bases for t h e petitioner's claim for VAT ref un d in both Cases Nos. 4 476 and 4 47 7 i s Sect i on 100 (a) (1) in t"'elation to Sec. 106<a> o f th e National Int ern 1 Reven ue Cod e <NI RC > o f 1986, a s ���nde d b y Executi ve Order No. 273. Th e p e t"'t i nent portion of whi ch ar e quo t e d in ord e r be low� "Sec. 100. Valu e add e d t a x on �ale o f" good . <a> Rate a n d b as e of" t x. - There shall be l e vied, as s essed and collected on e vet'Y sale, barter or exchanget of goods , a value - added ta x equivalent to 10~ of t h e gross se ll ing price or gross value in money o f t he goods sold, bat't Pt' ed or exchan ged, such t a x to be pa\id by the sell er or tr ans f er o rs Pro v id~d, t h at the f ol lowing sale1 by VAT-regi stered per ons shall be subj ect t o 0" ' )( )( )( X )()( 34?

DECISION CTA CASES NOS. 4476 & 4 477 - 6- Sec. 106. R funds or ta x credits of inp�Jt ta>c. <a> Ex pot~t sr~l es. An e)(port e r who is a VAT--t~P.giste red per~ son JUlY wit h in tw o years fro11 the d a t -e of e,.portat ion, apply fot~ the iss uance of a ta,. credit ce rtificate a t~ t~ e f und of the input tax att r i butable to th e goods e)(ported, to t he extent that such i n put ta)( has not been appl i ed to out put tax and upon pr~esentation o f pt~ '?of t ha t t he foreign e xchan ge proceeds has been accounted for in a c c ordance with the regulat i on� of the Central Bank of the Philippines." Th er e appe ars t o be n o le ga l dispute that pursuant to the abo ve-mentioned pro v is ion s o f law, petitioner is e n titl ed to the refund of va l ue -added ta,. on two occas ion s o f p ur chas es of Marlboro King cigarettes from La S ue r te Cigar and Cigarette Factory and its exportation to Hongkong which generated a n inwa r d re mi ttance of foreign currency, so that, what r e mains t o be res o lv ed is the factual basis for the grant of t he refund. Petitioner i a newly organized export-trading firm. As of Nov ember 29, 1988, it had is sued on 1y three <3> sales invoices. The first Sales Invoice No. 001 was issued on December 15, 1987; the s econd Sales Invoice No. 002 was issued on August 31, 1988 for the first export shipment of 450 cases of Marlboro King cigarettes; and the th i rd Sales Invoice No. 003 issued on November 29, 1988 for the 34~

DECISION CTA CASES NOS. 4476 & 4477 - 7- ��cond shipment o f t h e same quantity of cigarettes whi ch was als o exported. The tes timony of VAT Divis i on Re ven u e Officet~ Ed mund Cal u ag <TSN d ated Dece mbe r 6, 1990, pp. 7 to 9>, indicates that the rea s on th e p e ti tion e r's cla i m f o r r efund of t he VAT portion Ltnd-er Sale s I nvoic e No s � . 002 and 003 was d�nied is th a t S a les Invo i ce No. 001 was never presented by p e t ition e r. This factual matter, howev er, pos es no obstacle for pet itio ner's c l ai m for refutld considet~ in g t hat it i s admitted by the tJaid Revenue Officer in his test i11ony that even without such invoice having been sub11itted it would not hav� �aterially affected the petitioner's claim for VAT refund under Sales Invoice Nos. 002 and 003 <Testimony of VAT Di v is ion Revenue Offi c er Edmund Caluag, TSN dat e d Decembe r 6 , 1990 pp. 10 to 15 ) . In other words, Invoi ce No. 0 0 1 i s not at a ll a r�q�.Jirelllent in th e pet i t io ner ' s cla i m f o r VAT r�fund under Invoice No s . 002 a nd 003. Sal�� Invoice No. 0 01 c ould not be 11aterially aff�ct�d the claim for refund since it was issued �v�n before the i mp l e ment a t ion of the VAT, havin g been issued f or transact i o n s as f at~ bac k as Decembe r us , 198 7 . Respondent fu rth r a lleges t h a t t he other

DECISION CTR CRSES NOS. ~~76 & ~477 - a- cl e i m for VAT ref Lind cover-ed by Sa 1 es Invoice No. 003 was d nied because said inYoice was missing from respondent' s records. The same Sales InYoice No. 003, howeYer, is clear- ly in the t'ecot'ds of the CIA!U as Ex hib it "G" (p. 21 Lmdet' CTA Case No. 4476). In Case No. 4476, it appears that pet' Annex "C" of the peti tion , in the sales inYoice issued by La Suerte Cigar and Cigarett e Factory, the tax was not billed separately in the total pllt'Chase price I of P1,800,000.00. The val Lte-added tax t'efundabl e as fer as Case No. 4476 is concerned should therefore b compute d on the basis of Section 102 (2) of th& Tax Code and s hould according 1y be r-ed�Je d to the amount of P 163, 636.36 instead of Ptao,ooo.oo. On the other h an d, no such reduction �hould be Mad on t he claim f or refund of the VAT in Case No. 4477 as the t'Pfunda ble a mount h a s been computed to be P163 , 636. 36 co11 s i det' i ng that t he tax ha� not also been bill ed separate ly in the total The �ore significant lega l issue is the claim for refund of ~..Q.__Y. �.\.!.QJ.:~n..'- t ax in the amou nt of P900,000.00. Petitioner's claim is based on Section 127 (d > of the National Internal ReYenue Code as amended by Exe utiYe Ordet' No. 273, which

DECISION CTA CASES NOB. 4476 & 4477 - 9- "Bee. 127. on domestic: produets - >OO< (d) Crttdit for excis e tax on goods etually exported . - When goods locally produced or mol'\n ltf.=\ct ur~ ed .:cn~e. r~emoved and actually expoYted without returning to the Phil� ppines, whether so expor~ted in their orlRinal st~te or as ingredients or pa,...ts of any mi'l rH tf;ou::t�n ed goods ot' produeta, any ~x c~sp tax paid thereon thall be credited or' ~'efunded 1.1pon fP.tbm~slS1on of the pt'oof of actual xpot"tation and upon receipt of the eorre9ponding foreign exchange payment: Provided, that the excise t f'\x on mi net' a 1 pl"'odueta, @XC pt coal and co ~<e, imposed under Section 151, shall not be creditable or refundable even if the lltin,,...al product~ 1\re actually exported." Petitioner eontends that on September 10, 1987, respondent, in n~p ly to petiti oner's query dated June 16, 1987, appt'oved the pt'ojected expot't sale of petitioner net of excise tax and r uled: "From the provisions of Section 109 and 110(d) of th e T x Code, as amended by Executive Order No. 22, it can be safely inferred that locally produced articles which are t"'emoved and actt.lally exported without returning to the Philippines will not b11 s1..1bject to exc i s t x, if there is proof of actual expor"'tation and receipt of the corresponding fol"'eig n exchange. In reply, please be informed that permit ia hereby granted to you to export loc lly produced cigarettes without the prepay111 nt of the exc ise tax, subject to the following conditioner" res p ondent issued BIR

DECISION CTA CASES NOS~ 4476 & 4477 - 10 - Ruli ng No. 127(d)-000-87-442-88, the port ion of which 6tatest '' Rep 1 y , p 1 e ase be i n formed t hat purs�.uant to Sect i on 12 7<d> of the tax Code, 11 amended , when go o ds locally produeed or manufactured are removed and actually exported without ret urning to the Philippin s, whether as exported in their original st a t e or as ingredi ents or p4rt of any manuf ctured goods or product1, ny excise tax paid thereon eh~All be ere d it e d or r funded upon submi~sion ~f proof of actu al xportation and r~c& ipt of the col"'r spending foreign EU<t:~han e pay111 n � Accordingly , you may s pu~eh loc ~ lly manufactur ed tax paid cigarettes from a ny source and export the s ame; and upon s ubmis sion of proof of exportat'ion and receipt of the corresponding for i n exchange payment; this Office , upo n your r equest will refund the excise tax el em ent or issue a corresponding tax credit certificate which can be used in payment of yo ur other internal reve nue tax li bilities." B sed on the fot"egoing rul ings of the respondent, petition er argues that it is enti t led to the refund of th e e xcise tax element on it s local put"chase and subsequent e><p o rtation of 450 cases of Marlboro K i n q ciqaret t es cov ered by Invoi c e No . 003 made on November 29, 1 9 8 8. Th e court has been made to undet"stand tha t t h e excis e ta>e portion on the fit"st purchase and exportation of the sa me quantity of cigarettes Ltn d e,... Invoice No. 0 02 i ssue d on ALIQ List 31, 1988 nad been refund e d to the taxpa yer. 3d7

DECISION CTA CASES NOS. 4476 & 4477 - 11 - � On the oth et' hc:\nd , t� espond e nt cont e nds that Sectio n 127<d> of the 1ax Code , whi c h a uthorized the reftmd of the excis e tax t o ex pot' te t's, refers only to exporters who are themselves manufacturers or producers of the ~oods expo t� t e d. Thus, since the petitioner is a trade-export er, it is not entitled to clai� a t' efund citing unnumbered BIR Ruling dated June 7, 1989 in the case of Shell Gas Philippine�, Inc. <p. 134 , Folder I, BIR rec., CTA Cate No. 4477>, whi c h re ads - "A re a din ~] o f the p t�� o v i s ion of the law cited by you <S e c. 127 <d) of the Tax Code), howev er, limits the credibility and/or t' efundab l e of the taxes pa id on the exported articles only to those actually produced or manufactured by the exporter-taxpayer and does not extend to and include .local sale�. When the law <Section 127(d)) says: When go ods 1 ocal l y manufactured are removed and expor' t ed , xxx it means that the remova l should be followed by exportation. In other words, to be exe mpt fro111 the payment of the speci fie tax and ~.s..tot:_e111_ taxes, the exporter should be �anufacturer of the expot'ted good�." However, We are inclined to agree with the theory of the petitioner when he argue� thats "xxx It must be emphasized that when the law does not d ist inguish we should not make any distincti on Ut;?..L_Le?i__NJ>n D i � t in g u it Nee 1\tQ. ~ i s t.iD.Q.~L~.r:.~D e b ~t!!t!::l-~� <Tanada v. Yulo, 61 Phil. 515 �1935&> "Section 127(d) of t he National

DECISION CTA CASES NOS. 4476 & 4477 - 12 - Internal Revenue Code makes no mention that it is applicable on 1 y to Manufacturers or producers. XHX 11 In fact, the law even state s that it redounds t o the benefit of all exporters con idering that it mandates that "goods locally pr oduce d or ma nu f actured ��� whether so imported in their original st.t\te or in gredi ents or parts of any ~a nufactured goods or produc ts, any exc i se tax paid thPreon shall be credited or refund ed." "The law Mpn l i.es to manufacta_wed g oods or prod ucts. mea n i n g a product not in it~ ot~igin al state. Hence, even whet~ e a s econd, thit~ d, fo urth, e t c . sale aftet~ manufacture o r prod uction is involved prior to expot~ t ati on, exe mption ft~om excise tax is ma nd a t e d. xxx" "The law flwther states that "any excise tax paid thereon shall be credited or refunded", me ani ng any and all excise taxes paid, wit hout dist incti on as to who paid i t, shall be credited at~ refunded. In the final anal ysis , the end purchaser who bears a burd en of any excise tax pa i d, in this case paid by the petitioner, should be entitled to the credit or refund." "It �ust be borne in mind that the Chief Executive, in enacting E.O. No. 22 dated June 25, 1987, is pr esumed to have amended the NIRC to add s ignificant changes and no t merely adding wot~ds in vain or leavi ng part of the enactment devoid of sense or meaning." XXX XXX )()()( Our agree�ent wi th the petitioner is based on the clear provision o f the law involved Section 127 ( d ) , quo t e d above.

DECISION CTA CASES NOS. 4476 & 4477 - 13 - ' In accordance with the said provision of law, for locally or manu factured qoods to be entitled to credit or refund of ex cis e tax paid thet' eon, there are tht'ee (3) req uisites which should be met, namely a (e.) the said goods a t'e actually exported either in th eir original state or as ingredient s o t ' pat' t of any manufactut'ed (b) proof of actual exportation should be submitted' (c) there should be pro of of receipt of the corresponding foreign �~change payment. Nowhere in the provision of the applicable law 11 there any expres s ment ion that the manufacturer of the exported good s on which excise tax has been paid should be the exporter; nor is it stated that removal should immediate l y be followed by �~portat ion. For a better understanding and interpretation of the law, we find it necessat'Y to present the pt'ovisi on of the code pt"'iOt"' to its aunendment by E. D. .c......c...:.... Section 127(d) was previously part of S ection 109 <now Section 126) of the Nat i anal Intern a 1 Revenue Code. The pet"'t i nent portion of which is r ad a1 follows�

DECISION CTA CASES NOS. 4476 & 4477 - 14 - "Exci�� taxes apply to a t~t i c les Manufact ured or produced i n t he Philipp i ne s for do mestic s al e or consuMption or f or an y dis posi t ion and to thing� impo rted, !;!ut __nQt to anything locally pr o d ~.~g__o_r llla n t..t factt..tred wh ic; h ~.u.J____Q!?_ re 111 Q.ygg___fp !~~-~-R..Q.r:t; ~~j. on -~DJL.J....�. ~ ct ll~ l l y_ e ~_p_o_ t: t ~ 1::1 . ~ ry _ _j_t...�. _ QJ.:.i...g_tr:t~l._.!i!_t_~_t-~_ o r as ~.IL..__j. n _gr:.~_d.! .!:1 D..t______ru:.____Q~r:.t__Q_f__~n.y !!!~D..!Jf.~~ :t;_l,!_t::_,q__e_l'::.'_t;__!_c;-_.!.~..1L__9T_P.t~_o q~,IG t S_. X X X 11 <U nders c o r ing s up pli~d>. P l e a se no t e t h a t pt'io t~ l o t he a men d men t t here was an out r ight exe mp tio n fro m e xc ise tax of exported goo d s. v When Exec utiv e Ot~ det~ No. 22 was promulgated t wo s ignif i c a nt chan ges we r e int r oduc ed, n a111ely ( 1) excise t ax has to be paid fi r�t <2> t ax re f u n d o r cre d i t sh a 11 be granted upon proof of actual ex port ati on a nd rec e i pt of fo reig n e xchan ge payment. Obv io u s ly , th e inten ti on i s to ensu t' e t h a t t he f' ot~ eig n e xchan ge p ay me nt f ot~ the e x port i s i n wardly re mi tted as a me ans o f di �courag i ng s alting of forei gn exchange on expor t pro c eed s . No wh ere in th e ame n d me nts introduced by the said E xe c u t ive Or de r can we i n fe r that t he t a x inc en t iv e is o n l y restricted to ma nu factu r er or producer. Con s id ering t he c on ti nu ing po licy of the government whi c h is to e ncourage exportation, the �ore c orr ect wa y of in t er p r etation will be that the incentive will be extended to every exporter �ubject only to the c ond ition � a f orementioned. 35 .1

-------- ~---....... DECISION CTA CASES NOS. 4476 & 4477 - 15 - It �ay be at'gued by respondent that the BIR Ruling issued on June 7, 1989 is the contt'olling rule, being the latest on the case . But, before the BIR Ruling of June 7, 1989, the BIR had, as already adverted to, issu ed on Sept e111ber 15, 1988 SIR Ruling No. 127Cd >-000-87- 442- 88 h olding the opposite view. Much e Ar l i er, on September 10, 1987, petit i onet' h a d depended on t' e s pond e n t ' s favorable answer to it s quet' Y <Annex "A", .Petition for Review, CTA 4477> to the effect that "locally prodiJI:::ed articles which at' e t' emoved and actually exported without r eturni ng to the Phi lippine s will not be subject to e ><ci s e tax, if t he t'e is pt'oof of actual exportation and receipt of the corresponding foreign exchange. " The probl e111 posed, therefore, i5 whether th e see ming modification or reversal by re5pondent of i ts answer-to-query of September 10, 1987 and BIR Ruling Mo. 127(d)-000-87-442-88 through the BIR Ruling dated June 7, 1989 can be Made to operate t'etroactively against petitioner, who had depended on such pre vio us ruling/opinion, in the 1 i ght of Secti on 246 of the NI RC of 1 986 <for111erly Section 327 o f the 1977 NIRC>. Section 246 provid es that a Section 246. Non-retroactivity of rulings - Any revocat ion, modificati on or 35?

DECISION CTA CASES NOS. 4476 & 4477 - 16 - reversal of any of the rules and regulation promulgated by the Commissioner s h al l not be given retroactive application if the revocation, modificatio n, or t~evet~sal will be prejudic ia l to the taxpayers except in the follow i ng cas es: <a> where the taxpay er de liberately misst ates or o�its material facts ft~om his retm~n or in any document required of him by the B�Jreau of Intern a 1 Revenue; . ( b> where the facts subsequently gathered by the Bureau of Inte rnal Revenue are materially different fro� the facts on which the ruling i9 based; or (c) where the taxpayer acted in bad faith. The gui ding element in the pt~ov is ion, therefor e, is � that, any ru ling promu lgated by the Commi�� i oner shall not be given application if the t~ evocatio n, modification or reversal will be pt~ejudicial to the taxpayer. Applied to the instant case, it is cleat~ that the application of the BIR ru ling of J une 7, 1989 to petitioner, in its tt~ansac tions of August 29, 1988 and November 29, 1 98 8 would wot~ k injusti ce upon tlaid taxpayet~. Even i f We were t o gran t f or the � a k e o f .:n~ gum en t t h at t h e �\I R t~ ul i n g of June 7, 1989 is the correct intet~pretation of the law, its retroactive application to cover past transactions will �urely, cost pre judice to petitioner, an injury preci�ely sought to be avoided by the enact�ent of provi sion on non-retroactivity of 3fl,1

DECISION CTA CASES NOS. 4476 & 4477 - 17 - Court of Tax AP...Q.!HtL~ G. R. No. L-52306 , October 12, In an Am e rican case, the aforestated theory wa� forMulated in this wise1 "In such a cit~c umstances . taxpayer cannot be convicted fot~ taking the tax authorities at their wot~ d". (I nt et�nat ion a 1 Business Machine s Co t~ p o t' at i o n v � U.S . 343F 2d 914, 923 (1965)" Our Supreme Court did have the occasion to cite the Corporation v. Court ._of_._I~ x_B..P..P..!..Al ~-' supra sayi ng 1 "Th� Commissioner Ot' Collector is precluded fro ada pting a position inconsistent wit h one previously taken where injusti ce n q l d t� esu lt thet~eft� om, or where th e re has been as mi�re presentllltion to t h e tax payer." More to th e poi nt . C_om m_i s s i on~y.:.___Q..f___...!.!:lj_et~n ~..!. Appeals <G. R. No. 66 65 - June 19, 1986, 142 SCRA 324, 328>, under analogous circumstances as the case at hand, further confirmed the effects of Section 246 and held thata "Petitioner' s aforesaid contention i� without merit. What is applicable in the case at bar is s till the Revenue R�Jling of Janu at' Y �::-1, 1980 because private respond ent Burroughs Ltd. paid ' 3fl4

DECI SION CTA CASES NOS. 4476 & 477 18 - the bt~ an ch pt'ofit t' emittance tax in question on Mat'ch 14, 1979. Memot~a ndum C ircular No. S-82 dated Mat'ch 17, 1982 c annot be given retroaLtive effect in the light of Section 327 o f the Nat ional Internal Revenue Code >< xx." Here, on the othe r ha n d, petit i onet~ was made to believe that the transactio n which it had de�cribed in its quel' Y wi 1 1 not be subject to excise tax, and was isstted a permi t on Septe mb et' 1 0, 1 9 8 7 t o s e 1 1 c i g A. t' e t t s t o fa t' e i g n buy e r s. Petitioner's belief was fltt'ther t'einfot~ced by the revenue ruling of Sept em be t' 15, 1988, which although not issued to p etitioner t'e iterated respondent's previo us stat ement of September 10, 1987. The expo rts of cig rettes were made on Augu5t 31, 1988 and No vember 29, 1 988 ot' aftet' the BIR r�Jlings of Septembet' 10, 1987 and September 15, 1988. So that, pet itioner had reason to be 1 i eve that said BIR t~ulings were pt'evailing at the time of the transaction. In point of time, thel"'efore, the SIR permit and ruling of September 15, 1988 are the applicable ruling and n ot the BI R t~ ul i ng of June 7, 1989 considet'ing S e ction 246 of the 1986 Tax Code. The exception und er Section 246 have not been alleged and do not ap pear to be applicable again�t petitioner. WHEREFORE, the res pon d nt should and is hereby

- DECISION CTA CASES NOB. 4476 & 4477 - 19 - a) th� aaount o f P163, 636.36 paid as value- add�d-tax in C. T. A. Case No. 4476 and P163, 636.36 al�o paid as value-added-ta>e in C. T. A. Case No. 4477. b) th� aaount of P900,00Q.OO paid as ~ ~A-~_P.~~~ t ax in CTA CA!1-f' No. 4477. SO ORDERED. Cllle:r:on City, Mett' O t1 .':1. ni l , 1\tlQIISt 20, 1991. ~~ Q.~ ER ERTO D. ACOSTA A~soci<'l\te J tdg lt WE CONCUR1 ~ Presiding JJ..tdg e (On Leave ) CONSTANTE C. ROAGUIN Associate Jud ge

DECISION CTR CASES NOS. 4476 & ~477 - 20 - CE RT I F I CRT I 0 N I hereby certify that t h is dec is i on was reached after due con sultation a mong the members of the Court of Tax Appeals in accordance with Section 13, Article VII I o f t h e C~n5titution. ~~ Pre5 id i n g Judge Cour t of Tax Appeals 3::17