SL HARBOR BULK TERMINAL CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES Court of Tax Appeals QUEZON CITY SECOND DIVISION SL HARBOR BULK CTA CASE N0.10250 TERMINAL CORPORATION, Present: Petitioner, vs. RINGPIS-LIBAN, Chairperson, MODESTO-SAN PEDRO, and FERRER-FLORES, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, DECISION FERRER-FLORES, J.: Before this Court is the Amended Petition for Review filed on September 15, 2020 praying for the issuance of a tax credit certificate in the amount of P3,100,000.00, 1 allegedly representing petitioner's erroneously paid excise tax.2 THE PARTIES Petitioner SL Harbor Bulk Terminal Corporation is a domestic corporation organized and existing under and by virtue of Philippine laws, duly registered with the Bureau of Internal Revenue (BIR) Revenue District Office (RDO) No. 29, and with principal office at Block 4 Lots 10 and 11, Manila Harbor Center, North Harbor, Barangay 128, Zone 10, Tondo, Manila.3 It is engaged in the business of handling, storing, distributing, importing, selling and marketing of petroleum products, petroleum products~ 1 Amended Petition for Review, Docket - Vol. III , pp. 862 to 880. \ 2 Summary of the Case, Pre-Trial Order dated September 29, 2021 , Docket - Vol. IV, p. 368 . 3 Par. 2(a), Joint Stipulation ofFacts and Issues (JSFI), Docket- Vol. IV, p. 1394.

DECISION CTA Case No. 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner ofInternal Revenue Page 2 of22 mixed with fuel additives, ethanol fuel grade products, and coco methyl ester (erne), and of blending and/or manufacturing of blended fuel oil grades.4 Respondent Commissioner of Internal Revenue (CIR) is the duly appointed Commissioner of the BIR, vested under appropriate laws with the authority to carry out the functions, duties, and responsibilities of his office, including the authority to refund and/or credit taxes under Section 204 of the National Internal Revenue Code (NIRC) of 1997,5 as amended.6 ANTECEDENTS (ADMINISTRATIVE LEVEL) On January 20, 2020, petitioner filed an Administrative Claim for Tax Credit with Revenue District Officer Teresita R. Lumayag of RDO No. 29, Manila, covering excise taxes paid for the first quarter of 2018.7 PROCEEDINGS BEFORE THIS COURT On January 24, 2020, petitioner filed a Petition for Review.8 Thereafter, petitioner filed a Motion to Admit Amended Petition for Review9 on February 18, 2020 attaching therewith its Amended Petition for Review, 10 which primarily amends, among others, the amount of excise tax claimed for refund from P13,361,877.50 to P12,347,485.00. On February 26, 2020, respondent filed a Motion for Extension ofTime to File Answer, 11 which the Court granted in the Order dated March 2, 2020. 12 Respondent then filed his Answer on March 12, 2020. 13 In the Resolution dated July 10, 2020, 14 the Court granted petitioner's Motion to Admit Amended Petition for Review and admitted the Amended i Petition for Review and, consequently, granted respondent a fifteen (15)-day period to file his Amended Answer to the Amended Petition for Review. 4 Exhibit "30", Docket- Vol. IV, pp. 1557 to 1564. 5 Republic Act (R.A.) No. 8424, as amended. 6 Par. 2(b), JSFI, Docket- Vol. IV, p. 1394. 7 Par. 2(c), JSFI, Docket- Vol. IV, p. 1395. 8 Docket- Vol. I, pp. 6 to 21. 9 Docket- Vol. II, pp. 403 to 406. 10 Docket- Vol. Tl , pp. 407 to 424. 11 Docket- Vol. lll, pp. 842 to 844. 12 Docket- Vol. III, p. 845. 13 Docket- Vol. III, pp. 846 to 852. 14 Resolution dated July 10, 2020, Docket- Vol. III, pp. 855 to 856.

DECISION CTA Case No. I0250 SL Harbor Bulk Terminal Corporation vs. Commissioner ofInternal Revenue Page 3 of22 On September 15, 2020, petitioner filed a Motion for Leave to Admit Amended Petition for Review, 15 attaching therewith its Amended Petition for Review, 16 which further amends the amount of its claim for tax credit to P3, 100,000.00. Respondent filed an Ex-Parte Manifestation on September 24, 2020, 17 stating therein that he served and filed his Amended Answer through registered mail on September 22, 2020 which the Court received on October 7, 2020. 18 On October 23, 2020, respondent filed a Manifestation with Motion for Extension to File Comment, 19 which the Court noted and granted in the Order dated October 27, 2020.20 In lieu of a comment, respondent posted on November 3, 2020 a Manifestation {To Petitioner 's Motion for Leave to Admit Amended Petition for Review), stating that he submits petitioner's motion to the sound discretion of the Court.21 The Court then noted said Manifestation and submitted petitioner's Motion for resolution, in the Resolution dated November 20, 2020. 22 In the Resolution dated January 7, 2021,23 the Court granted petitioner's Motion for Leave to Admit Amended Petition for Review, and admitted the Amended Petition for Review. On January 22, 2021, respondent transmitted to the Court the BIR Records of the case, consisting of 1,519 pages, in three (3) folders. 24 Thereafter, on January 28, 2021, respondent filed his Amended Answer,25 interposing his special and affirmative defenses. The Pre-Trial Conference was initially set on February 24, 2021,26 but was later reset to March 24, 2021,27 and further reset to and held on July 5, 15 Docket- Vol. III, pp. 858 to 86I. \ 16 Docket - Vol. III, pp. 862 to 880. 17 Docket - Vol. III, pp. I085 to I086 18 Docket-Vol.III, pp.I095toii02 . 19 Docket - Vol. III , pp.II07 to II09 . 20 Docket - Vol.III, p. IIIO. 2 1 Docket- Vol. III , pp. IIII to II13 . 22 Docket - Vol. III, p. III6. 23 Docket - Voi.TTT, pp. lll8to1121 . 24 Compliance dated January 2I , 2021 , Docket- Vol. Ill , pp. I122 to 1123 . 25 Docket- Vol. III, pp. II25 to II35 . 26 Notice of Pre-Trial Conference dated January 29, 2021 , Docket - Vol. III , pp. Il36 to Il37. 27 Notice ofResetting dated February 10, 2021, Docket - Vol. III , p. 1I38

DECISION CTA Case No . 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner of Internal Revenue Page 4 of22 2021.28 Prior thereto, petitioner and respondent filed their Pre- Trial Briefs on March 22,2021 29 and March 23,2021,30 respectively. On July 27, 2021, the Court received the parties' Joint Stipulations of Facts and Issues, filed via accredited courier,31 which was approved and adopted by the Court in the Pre-Trial Order dated September 29, 2021,32 thereby deeming the termination of the Pre-Trial. Trial then ensued, with both parties presenting and offering their respective documentary and testimonial evidence. Petitioner offered the testimonies of the following individuals, namely: (1) Ms. Shiela Mary A. Ahing,33 petitioner's Finance Manager; (2) Mr. Christian Ivan R. Requinta,34 petitioner's Trading Head; (3) Ms. Jenny V. Catriz,35 petitioner's Billing Head; and, (4) Ms. Ma. Alma C. Sese,36 the Court-commissioned Independent Certified Public Accountant (ICPA).37 The Report of the said ICPA was posted on December 1, 2021.38 On April 4, 2022, petitioner filed its Formal Offer of Evidence, 39 to which respondent filed his Comment/Opposition [Re: Petitioner's Formal Offer ofEvidence dated 04 Apri/2022} on May 13, 2022.40 In the Resolution dated June 7, 2022,41 the Court admitted petitioner's offered exhibits, except for: \ 28 Notice of Resetting dated May 17, 2021 , Docket - Vol. III, p. 1338; Minutes of the hearing held on, and Order dated, July 5, 2021 , Docket - Vol. III, pp. 1339, and 1342, respectively. 29 Petitioner's Pre-Trial Brief Docket- Vol. III , pp. 1139 to 1154. 30 Respondent's Pre-Trial Brief Docket- Vol. III , pp. 1331 to 1336. 31 Docket- Vol. IV, pp. 1362 to 1365 . 32 Docket- Vol. IV, pp. 1368 to 1374. 33 Exhibit "P-19", Docket - Vol. III, pp. 1237 to 1252; Minutes of the hearing held on, and Order dated, March 14,2022, Docket- Vol. IV, pp. 1499 to 1501. 34 Exhibit "P-20", Docket- Vol. III, pp. 1283 to 1292; Minutes of the hearing held on, and Order dated, March 14, 2022, Docket - Vol. IV, pp. 1499 to 150 I. 35 Exhibit "P-21 ", Docket- Vol. III , pp. 1300 to 1309; Minutes of the hearing held on, and Order dated, March 14,2022, Docket- Vol. IV, pp. 1499 to 1501. 36 Exhibit " P-28", Docket- Vol. IV, pp. 1478 to 1494; Minutes of the hearing held on, and Order dated, February 21 , 2022, Docket - Vol. IV, pp. 1496 to 1497; Minutes of the hearing held on, and Order dated, March 14, 2022, Docket- Vol. IV, pp. 1499 to 150 I. 37 Order dated October 6, 2021 , Docket- Vol. IV, p. 1399. 38 Exhibit " P-29", Docket - Vol. TV , pp. 1465 to 1473 (Attached to Compliance dated December I, 2021 , Docket- Vol. IV, pp. 1461 to 1463). 39 Docket- Vol. IV, pp. 1502 to 1519. 40 Docket - Vol. IV, pp. 1731 to 1733 . 41 Docket - Vol. IV, pp. 1736 to 1739.

DECISION CTA Case No . 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner of Internal Revenue Page 5 of22 1. Exhibits "P-1"' "P-1-1"' "P-2" and "P-2-1"' "P-12"' "P-12- f1a"i'lu"rPe-t1o6p"r' e"sPen-1t 6th-1e"o' ri"gPi-n1a6l -f2o"r' c"oPm-p1a7r"i'soann;dan"dP,-17-1"' for 2. Exhibits "P-33-2.1" and "P-33-3 .4", for failure to correspond, as the documents marked were very blurred that it cannot be determined whether it is the same document described in the Formal Offer ofEvidence. For his part, respondent presented the testimony of Revenue Officer Loreto P. Tilbe, Jr.42 On June 24, 2022, petitioner posted its Omnibus Motion (Re: Resolution dated 07 June 2022),43 to which respondent filed his Comment/Opposition [Re: Petitioner 's Omnibus Motion dated 24 June 2022] on September 19,2022.44 On the other hand, on July 5, 2022, respondent filed his Formal Offer of Evidence,45 to which petitioner filed its Comment/Objection (Re: Formal Offer ofEvidence dated 04 July 2022j46 on July 25, 2022. In the Resolution dated September 12,2022,47 the Court admitted respondent's offered exhibits, except for Exhibits "R-1" and "R-2", for failure to submit the duly marked exhibits. Respondent then filed his Omnibus Motion [Re: Respondent's Formal Offer ofEvidence] on October 3, 2022,48 without petitioner's comment despite due notice.49 In the Resolution dated March 6, 2023,50 the Court, inter alia: (1) granted petitioner's Omnibus Motion; (2) admitted Exhibits "P-1"' ""PP--11-61-"2'""' P"-P2-"17an'''d""PP--127--11""' ' ""PP--1323"-'2".P1"- 12-1"' "P-16"' "P-16-1"' and "P-33-3.4"; \ 42 Exhibit " R-6" and "R-7", Docket - Vol. III, pp. 1316 to 1321 ; Minutes of the hearing held on and Order dated June 13 , 2022, Docket- Vol. IV, pp. 1740 to 1741. 43 Docket- Vol. IV, pp. 1758 to 1765 . 44 Docket- Vol. IV, pp. 1815 to 1820. 45 Docket- Vol. IV, pp. 1747 to 1750. 46 Docket- Vol. IV, pp. 1805 to 1808. 47 Docket - Vol. TV pp. 1813 to 1814. 48 Docket - Vol. IV, pp. 1823 to 1825 49 Records Verification Report dated January I0, 2023 issued by the Judicial Records Division of this Court, Docket- Vol. IV, p. 1843 . 50 Docket- Vol. IV, pp. 1845 to 1857.

DECISION CTA Case No. 10250 SL Harbor Bulk Terminal Corp oration vs. Commissioner ofInternal Revenue Page 6 of22 (3) remarked Exhibits "P-28" and "P-28-1" as Exhibits "P-42" and "P- 42-1 ", respectively; and, (4) partially granted respondent' s Omnibus Motion, allowing the remarking of Exhibits "R-1" and "R-2" in a commissioner's hearing. On April 3, 2023, respondent filed his Supplemental Formal Offer of Evidence. 51 Petitioner filed its Memorandum on April 11 , 2023.52 Meanwhile, in the Resolution dated May 25, 2023,53 the Court granted respondent's Omnibus Motion, and admitted Exhibits "R-1" and "R-2". Subsequently, respondent filed his Memorandum on July 12, 2023.54 On July 28, 2023 , the case was considered submitted for decision.55 THE STIPULATED ISSUE As stipulated, the sole issue for the Court's determination is as follows: Whether or not petitioner is entitled to a tax credit of alleged erroneously paid Excise Tax in the aggregate amount [of] Three Million One Hundred Thousand Pesos (Php3,100,000.00) covering excise taxes paid for first quarter of 2018. 56 Petitioner's arguments:57 Petitioner argues that the Court has jurisdiction over the instant petition; and that it is entitled to a tax credit for the erroneously paid excise tax in the aggregate amount ofP1 ,650,000.00 covering the period of January 1, 2018 to March 31, 2018, representing the excise tax on the bunker fuel and diesel which it imported and allegedly established to have been used to sell 660,000 liters of Bunker Fuel Oil (BFO) and Special Fuel Oil (SFO) to entities 51 Docket - Vol. IV, pp. 1890 to 1892. \ 52 Docket- Vol. IV, pp. 1861 to 1888. 53 Docket - Vol. IV, pp. 1895 to 1897. 54 Docket - Vol. IV, pp. 1901 to 1916. 55 Docket - Vol. IV , p. 1918. 56 Par. 3(a), JSFI, Docket - Vol. IV, p. 1395. 57 Petitioner' s Memorandum, Docket - Vol. IV, pp. 1861 to 1888.

DECISION CTA Case No . 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner ofInternal Revenue Page 7 of22 registered with the Subic Bay Metropolitan Authority (SBMA) and Philippine Economic Zone Authority (PEZA). Respondent's counter-arguments:58 Respondent contends that petitioner's administrative and judicial claims for tax credit are filed beyond the prescriptive period, thus, the Court has no jurisdiction over the instant petition; that, assuming arguendo that the Court has jurisdiction over the instant petition, the excise tax paid by petitioner is not erroneously or illegally collected; that petitioner is not entitled to its claim for refund; and that petitioner is not the proper party to claim for tax refund. THE COURT'S RULING The Amended Petition for R eview must be denied for lack of merit. The Court has jurisdiction over the present petition; the administrative and judicial claims were timely filed. Respondent argues that this Court has no jurisdiction over the instant petition on the basis that premature invocation of court's intervention is fatal to petitioner's cause of action, considering respondent was not given sufficient time to determine the propriety of petitioner' s claim. He further points out that the Amended Petition for Review, which was filed on September 15 , 2020, is treated as an entirely new petition for review, thus, petitioner' s claim for refund was filed beyond the two (2) year prescriptive period. On the other hand, petitioner contends otherwise, claiming that its administrative and judicial claims for tax credit were timely filed. We agree with petitioner. Sections 204(C) and 229 of the NIRC of 1997, as amended, read: SEC. 204. Authority ofthe Commissioner to Compromise/Abate and Refund or Credit Taxes. - The Commissioner may - \ 58 Respondent' s Memorandum, Docket- Vol. IV, pp. 1901 to 1916.

DECISION CTA Case No . 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner ofInternal Revenue XXX XXX XXX (C) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment 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. XXX XXX XXX SEC. 229. R ecovery ofTax E rroneously or Illegally Collected.- No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid. (Emphasis supplied) The above-stated provisions are clear: within two (2) years from the date of payment of tax, the claimant must first file an administrative claim with respondent before filing its judicial claim with the courts of law. Both claims, however, must be filed within a two (2)-year reglementary period. Timeliness of the filing of the claim is mandatory and jurisdictional, and thus, the Court cannot take cognizance of a judicial claim for refund filed either prematurely or out of time. It is worthy to stress that, as for the judicial claim, tax law even explicitly provides that it be filed within two (2) years from payment of the tax "regardless of any supervening cause that may arise after payment."59 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 "' v,. San M;gu" ca,pamt;an, ''"9� �G.R. Nos. 180740 aod 180910, \ November 11 ,2019 .

DECISION CTA Case No. 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner ofInternal Revenue Page 9 of22 taxation, or by some officer having no authority to levy the tax, or one which is some other similar aspect is illegal. 60 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". In this case, the amount ofP3,100,000.00 being claimed for tax credit allegedly came from excise taxes on importation of bunker fuel and diesel paid on January 24,2018, January 26,2018, February 1, 2018, and March 20, 2018. Below are the pertinent dates relative to petitioner's claim for tax credit: Amount of Two (2)-Year Date of Date of Date of Payment i Excise Tax Paid Prescriptive Administrative Judicial 1 Period Claim Claim L... !~n~~D'. ?.4.! ?.QJ_~~~ ...j ?.4.4.~?.~4.!~9?.:_QQ j J~J.:~~~ry?.4.~.?.9?.9 1 I f~ ����~~r;;'~~?��?.~�1:~~;H:~ jl ~�� ~,:H:J:H~:~~-~.�~~:66n-l ~~r;};~~;Q?.1;:?~~~~~--1 -Ja;~. ~...6._6;o, LI....J~ a;~~66�;� �4� �'� � As can be gleaned from the foregoing, since the administrative and judicial claims were within the two (2)-year prescriptive period, the Court has jurisdiction to entertain the present judicial claim. As to respondent's contention that the premature invocation of the court's intervention is fatal to petitioner's cause of action as the present case was filed barely four (4) days after petitioner filed its administrative claim for refund, it should be noted that the law only requires that an administrative claim be priorly filed, to give the BIR at the administrative level an opportunity to act on said claim. In other words, for as long as the administrative claim and judicial claim were filed within the two (2)-year prescriptive period, then there was exhaustion of administrative remedies.67 The taxpayer need not wait for respondent to act on the administrative claim for refund.68 \ �6 Commissioner of Internal Revenue vs. Pilipinas Shell Petroleum Corporation, G.R. No. 188497, April 25 , 2012, citing the definition provided in BLACK'S LAW DICTIONARY, Fifth Edition, p. 486. 61 Exhibit "P-33-2.5", Docket- Vol. IV, p. 1604, USB . 62 Par. 3, JSFI, Docket- Vol. IV, p. 1395; Exhibits " P-10" and " 11 ", Docket- Vol. IV, pp. 1549 to 1554, and 1555, respectively. 63 Docket- Vol. I, pp. 6 to 21. 64 Exhibit "P-33-1.5", Docket- Vol. IV, p. 1596, USB 65 Exhibit "P-33-3 .5", Docket- Vol. IV, p. 1613 , USB. 66 Exhibit "P-33-4.5", Docket- Vol. IV, p. 1621, USB. 67 Commissioner of Internal Revenue vs. Univation Motor Philippines, Inc. (formerly Nissan Motor Philippines, Inc.), G.R. No. 231581, April 10, 2019. 68 !d.

DECISION CTA Case No. 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner ofInternal Revenue Page 10 of22 Respondent also claims that the amended petition for review was filed beyond the two (2)-year prescriptive period, invoking the ruling in Ching vs. Court ofAppeals,69 that pleadings superseded or amended disappear from the records and ceases its status as a pleading and is deemed withdrawn and disappears from the record. We disagree with respondent. Section 8, Rule 10 of the Rules of Court, as amended,70 provides: Section 8. Effect of amended pleadings - An amended pleading supersedes the pleading that it amends. However, admissions in superseded pleadings may be offered in evidence against the pleader, and claims or defenses alleged therein not incorporated in the amended pleading shall be deemed waived. Based on the foregoing, an amended complaint supersedes an original one. Consequently, the original complaint is deemed withdrawn and no longer considered part of the record. The settled rule is that the filing of an amended pleading does not retroact to the date of the filing of the original pleading; hence, the statute oflimitation runs until the submission of the amendment. It is true that as an exception, the Supreme Court has held that an amendment which merely supplements and amplifies facts originally alleged in the complaint relates back to the date of the commencement of the action, and is not barred by the statute of limitations which expired after the service of the original complaint. Thus, when the amended complaint does not introduce new issues, cause of action, or demands, the suit is deemed to have commenced on the date the original complaint was filed. 71 In this case, a comparison of petitioner' s Amended Petition for Review and its original Petition for Review reveals the following pertinent changes or amendments, to wit: 72 Ip h Petition for Review filed on Amended Petition for Review January 24, 2020 filed on September 15, 2020 ! aragrap 1.1 I x x x ...erroneously or wrongfully I x x x ...erroneously or wrongfully \ i � collected Excise Tax in the amount I collected Excise Tax in the amount 1 I i-- - - ��-- -----~-<?.K~1?. ~?._�J2.~n : ?.9 ����---- -�---� ----- m L<rt.~?.?.!QQ,QQQ~_Q_Q_______________ ----�----- . __j I 3.3 I A portion of the Excise Tax which A portion of the Excise Tax which j I. ........................ E~!~!~9!1.~~--������� Ec.:t.~g -~-~~-~~q~~!l.gY ...P~!~!~9!1.~~---�������Ec.:t.~g ... ~~~~~-q~~!l.!IY... !............ 69 G.R. No. 110844, April27, 2000 . \ 70 A.M. No. 19-1 0-20-SC. 7 1 Alpha Plus International Enterprises Corp. vs. Philippine Charter Insurance Corp., et at. , G.R. No . 203756, February I0, 2021. 72 Pars. 1.1 , 3.3 and 4.6 of the original Petition f or Review and Amended Petition f or Review, Docket - Vol. I, pp. 6, 10 and 12 and Docket- Vol. III, pp. 862, 866 and 869, respectively.

DECISION CTA Case No. 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner of Internal Revenue Page 11 of22 Paragraph I Petition for Review filed on I January 24,2020 1 became erroneous when it sold a I became erroneous when it sold a i substantial volume of bunker fuel substantial volume of bunker fuel 1 to excise tax-exempt entities 1I to excise tax-exempt entities registered with either Subic Bay registered with either Subic Bay Metropolitan Association I Metropolitan Association (SBMA) , (SBMA), Philippine Economic I or the Philippine Economic Zone Authon.ty I Authon.ty I Zone (PEZA) or CPEZA) . 1 1 Zamboanga City Special Economic Zone (ZAMBO ! --- ��������������-- L�~S>.~_o_g~): . - .. -- . -� - r - � - - - - - - --------------------------------------------------------------------------------------------------------------------------------------------------------1� 4 .6 / During the same period of January During the same period ofFebruary , to March 2018 , petitioner, out of I to March 2018, petitioner, out of I I I 1 the [ fuel 139 ,797 ,946.60 L of bunker the 139 ,797 ,946 .60 L of bunker I1 it has imported, sold a total of I fuel it has imported, sold a total of 1 5,344,751 L thereof to various tax 1,240,000 L thereof to various tax ! I exempt entities registered with � exempt entities registered with ! , either the SBMA, PEZA or either the SBMA or PEZA . .. x x x I _____ I ZAMBO Ecozone ... x x x , '����������- ...................,, ____________ ............:.,,. .. ,,,,,,,,, �����������������----���---�����--����-����������--��-��������---��-�-��� ...........-------������������������-�- ����������������-�-��---.. -������-���--�-�--����-------�--�--�����.. .......; Considering that the above amendments do not introduce new issues, causes of actions, or demands, the suit is deemed to have been commenced on January 24, 2020, the date the original Petition for Review was filed, and not on the date of the filing of the Amended Petition for Review on September 15, 2020. That being settled, we now proceed to evaluate petitioner's compliance with the requirements for the subject refund. Requisites to claim a tax credit or refund of erroneously or illegally collected excise taxes paid on imported fuel sold to tax-exempt entities Petitioner's claim for issuance of a tax credit certificate is governed by the following provisions of the NIRC of 1997, as amended, viz.: SEC. 129. Goods Subject to Excise Taxes. - Excise taxes !I!.Jlly to goods manufactured or produced in the Philippines for domestic sale or consumption or for any other disposition and to things imported. The excise tax imposed herein shall be in addition to the value- added tax imposed under Title IV. SEC. 131. XXX XXX XXX Payment ofExcise Taxes on Imported Articles. - \

DECISION CTA Case No. 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner ofInternal Revenue Page 12 of22 (A) Persons Liable. -Excise taxes on imported articles shall be paid by the owner or importer to the Customs Officers, conformably with the regulations of the Department of Finance and before the release of such articles from the customhouse, or by the person who is found in possession of articles which are exempt from excise taxes other than those legally entitled to exemption. XXX XXX XXX SEC. 135. Petroleum Products Sold to International Carriers and Exempt Entities or Agencies.- Petroleum products sold to the following are exempt from excise tax: (a) XXX (b) XXX (c) Entities which are by law exempt from direct and indirect taxes. Based on the foregoing provisions, and the earlier discussion on prescription, the following are the basic requirements for the entitlement to the claim for refund or issuance of tax credit certificate: 1. That petitioner's claim was filed within the two-year prescriptive period as provided for under Sections 204(C) and 229 of the NIRC of 1997; 2. That the entity to which the petitioner sold the petroleum products is an entity exempt by law from indirect and direct taxes; and, 3. That petitioner is the statutory taxpayer and actually paid the claimed excise taxes on the same petroleum products sold to the exempt entity. In Chevron Philippines, Inc. vs. Commissioner of Internal Revenue (Chevron)/3 the Supreme Court held that excise tax paid by the statutory taxpayer on petroleum products sold to any of the entities or agencies named in Section 13 5 of the NIRC of 1997, as amended, exempt from excise tax is deemed illegal or erroneous, to wit: Excise tax on petroleum products is essentially a tax on property, the direct liability for which pertains to the statutory taxpayer (i.e., manufacturer, producer or importer). Any excise tax paid by the statutory taxpayer on petroleum products sold to any of the entities or agencies --------2015. \

DECISION CTA Case No. 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner ofInternal Revenue Page 13 of22 named in Section 135 of the National Internal Revenue Code (NIRC) exempt from excise tax is deemed illegal or erroneous; and should be credited or refunded to the payor pursuant to Section 204 of the NIRC. This is because the exemption granted under Section 135 of the NIRC must be construed in favor of the property itself, that is, the petroleum products. (Emphasis supplied) In addition, as clarified by the Supreme Court in Pilipinas Shell Petroleum Corporation vs. Commissioner ofInternal Revenue/ 4 considering that the status ofthe petroleum products as tax-exempt solidifies upon the sale to any of the entities enumerated under Section 135 , any excise taxes which were previously paid thereon would then be considered as "erroneously or illegally collected," and therefore, subject to refund. It was further held therein that the tax exemption under Section 135 of the NIRC of 1997, as amended, must correspondingly benefit the one who actually bears the liability to pay the same (i.e. , the importers/manufacturers of petroleum products sold to international carriers, among others), and not the one who simply bears the economic burden thereof(i.e., the purchasers ofthe products, such as international carriers). Inasmuch as the first requirement has already been established, we shall proceed with the second requirement for the entitlement to the claim for refund or issuance of tax credit certificate. Only a portion o[the subjectpetroleum products were sold to a duly registered PEZA entity exempt by law from indirect and direct taxes. To recall, petitioner allegedly sold BFO and SFO to tax-exempt entities who are purportedly SBMA and PEZA-registered entities. In relation thereto, Section 12(c) ofRepublic Act (R.A.) No. 7227,75 as amended by R.A. No. 9400,76 provides for the tax exemption of SBMA- registered entities: SEC. 12. Subic Special Economic Zone.- xxx XXX XXX \XXX 74 G.R. No. 2 11303 , June 15 , 2021. 75 An Act Accelerating the Conversion of Military Reservation s Tnto Other Productive Uses, Creating the Bases Conversion and Development Authority for the Purpose, Providing Funds Therefor and for Other Purpose. 76 An Act Amending Republic Act No . 7227, As Amended, Otherwise Known As The Bases Conversion And Development Act Of 1992, And For Other Purposes.

DECISION CTA Case No . 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner of Internal Revenue Page 14 of22 (c) The provision of existing laws, rules and regulations to the contrary notwithstanding, no national and local taxes shall be imposed within the Subic Special Economic Zone. In lieu of said taxes, a five percent (5%) tax on gross income earned shall be paid by all business enterprises within the Subic Special Economic Zone and shall be remitted as follows: three percent (3%) to the National Government, and two percent (2%) to the Subic Bay Metropolitan Authority (SBMA) for distribution to the local government units affected by the declaration of and contiguous to the zone... (Emphasis supplied) Moreover, Sections 3(h) and 21 of the Implementing Rules and Regulations (IRR) ofR.A. No. 7227,77 provide: Sec. 3. Definitions. For purposes ofthese Rules these terms shall be understood to have the following meanings: XXX XXX XXX h. Certificate of Registration - refers to the certificate issued by the SBMA representing the registration of the business entity as an SBF Enterprise. XXX XXX XXX Sec. 21. Effect of Issuance of Certificates. - Issuance of the Certificate of Registration or Residency to an SBF Enterprise or Resident, respectively, shall entitle and subject the business enterprise or resident to all the benefits and obligations under the Act and these Rules, and other regulations that may be promulgated by the SBMA, subject to the provisions of Section 5 and 13 hereof. (Emphasis and underscoring supplied) Based on the foregoing, entities within the Subic Special Economic Zone (SSEZ) enjoy national and local tax exemption. Such exemption, however, takes effect only upon the SBMA's issuance of a Certificate of Registration or Certificate of Registration and Tax Exemption (CRTE) to a business enterprise within the SSEZ. In other words, it is only at the date of issuance of the Certificate of Registration or CRTE, which represents the registration of the concerned business enterprise, will the latter be entitled to the tax exemption granted under R.A. No. 7227, as amende\ 77 Rules And Regulations to Implement Republic Act No . 7916, Otherwise Known as "The Special Econom ic Zone Act Of 1995", May 17, 1995.

DECISION CTA Case No . 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner ofInternal Revenue Page 15 of22 On the other hand, Section 24 ofR.A. No. 7916,78 as amended by R.A. No. 8748,79 provides for the tax exemption of PEZA-registered entities as follows: SEC. 24. Exemptionfrom National and Local Taxes . - Except for real property taxes on land owned by developers, no taxes, local and national, shall be imposed on business establishments operating within the ECOZONE. In lieu thereof, five percent (5%) of the gross income earned by all business enterprises within the ECOZONE shall be paid and remitted as follows: (a) Three percent (3%) to the National Government; (b) Two percent (2%) which shall be directly remitted by the business establishments to the treasurer' s office of the municipality or city where the enterprise is located. (Emphasis supplied) Relative thereto, Section 2 of Rule I and Sections 2 and 5 of Rule XIII of the IRR ofR.A. No. 791680 provides for the registration and entitlement to incentives ofPEZA-registered entities: PART I General Provisions RULE I Definitions and Basic Guidelines XXX XXX XXX s. "Certificate of Registration" shall mean the certificate issued by the PEZA to an ECOZONE Enterprise upon its registration. t. "Date of Registration" shall refer to the date appearing in the certificate of registration. XXX XXX XXX PART VII Incentives to ECOZONE Enterprises RULE XIII Application and Entitlement XXX XXX \ XXX 78 An Act Providing For The Legal Framework And Mechanisms For The Creation, Operation, Administration, and Coordination Of Special Economic Zones in the Philippines, Creating For This Purpose, The Philippine Economic Zone Authority (Peza), And For Other Purposes. 79 An Act Amending Republic Act No . 7916, Otherwise Known As The "Special Economic Zone Act Of 1995 ." 80 Rules And Regulations to Implement Republic Act No. 7916, Otherwise Known as "The Special Economic Zone Act Of 1995", May 17, 1995.

DECISION CTA Case No. 10250 SL Harb or Bulk Terminal Corp oration vs. Commissioner ofInternal Revenue Page 16 of22 SECTION 2. Scope of Entitlement. - New or expanding ECOZONE Developers/Operators, Export, Free Trade, Domestic Market, Utilities, Facilities and Tourism Enterprises, except ECOZONE Service Enterprises as defined under Section 2(p), Rule I of these Rules, registered on or after the effectivity of these Rules, shall be entitled to the fiscal incentives provided in Sections 24 and 42 of the Act. XXX XXX XXX SECTION 5. Limitation of Entitlement to Incentives. - Incentives granted by the PEZA shall apply only to registered operations of the ECOZONE Enterprises and only during the period of its registration with PEZA. (Emphasis supplied) Pursuant to the aforequoted provisions, business establishments operating within the ECOZONE are exempt from national and local taxes, which include excise taxes. 81 In lieu thereof, the said enterprises shall pay five percent (5%) of its gross income to the national government and the municipality or city where it is located. In this case, petitioner allegedly sold BFO and SFO to the following entities in the months of January to March 2018 whose relevant documents reveal their respective registration status as follows: 82 Customer Name Registration Document Exhibit Period Reference � Johnson Controls-Hitachi I Certificate ofRegistration and I "P-38-1 "83 J June 18, 2018 i Tax Exemption Subic Bay Air Conditioning 'i I to June 17, Philippines, Inc. (Johnson I Freeport Enterprise Certificate ! 2021 I -~ Controls) -�����---�����������---�����������������-----�--���������������-������-����-���-��-��� I I JX Nippon Mining & J No. 1997-0022) "P-38-2" �����������������������������-��-�� -����----�������������-�����������-�����8�-�4�- ......!....................,._______. .,........... ���+ �����������-�--������-���-�-�����������������������-������-�- ��������������������---� Valid for the 1 Amended Certificate of 1 Metals Philippines, Inc. (JX i Registration No. 96-080; 1 1 year 2018 ! '1' Nippon) i PEZA Certification No. 2018- � . I 0596 (PEZA-ERD Form No. I .L I_ -------- �------------- ____LQQ~Q!.L ________ ��----����-------��- �---�--- - �- .J With regard to Johnson Controls, it appears that, when the imported petroleum products were sold to it on various dates in March 2018, its registration with the SBMA was not yet effective. Hence, the second requisite was not met insofar as the excise tax related to the petroleum products sold to Johnson Controls. \ 81 Refer to Section 21(e), NIRC of 1997. 82 Exhibit "P-36", Docket - Vol. IV, p. 1643, USB . 83 Docket- Vol. IV, pp. 1720 to 1721 , USB . 84 Docket- Vol. IV, pp. 1722 to I723 , USB .

DECISION CTA Case No . 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner of Internal Revenue Page 17 of22 On the other hand, as to JX Nippon, as per the certifications presented, it is indeed duly registered with the PEZA at the time the petroleum products were sold to it by the petitioner. As such, the second requisite was complied with in the case of the petroleum products sold to JX Nippon. Hence, the excise taxes paid by petitioner on petroleum products sold to JX Nippon, a PEZA-registered entity, may be considered as erroneously or illegally collected and subject to refund provided the rest of the requisites are complied with. Petitioner. however, failed to prove the alleged erroneous or illegal excise tax payments on the same petroleum products sold to the tax-exempt entities. As to the third requisite, petitioner claims to have paid the following excise tax on its importations of BFO and automotive diesel oil in the 1st quarter of2018:85 Date Paid86 Quantity Rate Excise Tax [in Liters (L)] I. I~l.?:_l}._~!}'_24,_~QL~__j_ J.?.J2.921~?.?.:�9 .L._P2.50___1__! ____44).7�_41802 :90_] 0 I Jal!_l:l_~__?._~!1Q!_~____J____l11 !�~!~.?2:.Q9..1--~ .5Q__I_._____. ]L~_?.;?.~_?._Q:9_Qj II~l?~~.~J}' J . ~_Q!?. .J 4.~. ?.?.?.!29?.:99 ! ) :?9 . II _ . JJ.?..L42. ?.?.?.:99 J ' h 20, 2o18 I 45 ,463 ,525.oo I 2.5o 113 ,658 ,812.50 .J -�---.~-.-----�------ 139,797,946.60 !__ : I P 349,494,866.so I In order to be refundable, however, petitioner must prove that the fuel oil sold to tax-exempt entities came from the importations on which petitioner paid excise taxes on January 24, 2018, January 26, 2018, February 1, 2018 and March 20, 2018. Notably, petitioner's importations are supported by Commercial Invoices, Bills of Lading, Assessment Notices, Import Entry Declarations, Authority to Release Imported Goods (BIR Form No. 1918), and Statements ofSettlement ofDuties and Taxes for January to March 2018.87 Evaluation of the subject supporting documents reveals that these are all in the name of petitioner, particularly, the Statements of Settlement of \ 85 Amended Petition f or Review, Docket- Vol. III, pp. 868 to 869; See also Exhibit " P-29", p. 3, Docket- Vol. III, p. 1467 and Exhibit "P-33", Docket - Vol. IV, p. 1592, USB. 86 Expressed in mm/dd/yyyy . 87 Exhibits "P-33-1.2" to "P-33-4.5", Docket - Vol. IV, pp. 1593 to 1621 , USB .

DECISION CTA Case No . I0250 SL Harb or Bulk Terminal Corporation vs. Commissioner of Internal Revenue Page 18 of22 Duties and Taxes. Petitioner is indeed the statutory taxpayer and actually paid the claimed excise taxes. For the period of February to March of2018, petitioner sold 1,240,000 liters of fuel oil to tax-exempt entities in the total amount oLP17,477,153.02, broken down as follows: 88 Exhibit Date I Inv~~~:sNo. I Reg~~;ered Buyer I Quantity (L) Sales Ref. 89 l ::�r.~?.�~_!_J:: :~.~~~~W,~t~[-J!;~~~~; ~H~~~~~�~ arch 15, 2018 I 27408 i Johnson Controls ! 20,000.00 662,884.00 : arch 26. 2018 ! 27442 i Johnson Controls I 20 ,000.00 I 662 ,88 4. 00 ~ ����---�--����-----���------�---�-� r-�--�-��������-----------,����--����--�--�----�-�---��----�����----�---�-�---~-----�---�--�-�--����� �����----�����------�-----����-----------��--��1 Total t,24o,ooo.oo IP17~477,Is3:o2 I Hence, petitioner's claim ofP3,100,000.00 is computed by multiplying 1,240,000 liters of fuel oil by the excise tax rate ofP2.50. The Court-commissioned ICPA, Ms. Sese, reported the following findings: 90 Sales to tax-exempt customers per petitioner declaration 1,240,000 L Sales to tax-exempt customers based on complete supporting documents 620,000 L Difference 620,000 L The above discrepancy was accounted for as follows: 1. Sales Invoice Nos. 27408 and 27442 are not supported by withdrawal certificates and delivery note; and, 2. Sales Invoice Nos. 28876 and 27132 are not qualified for tax refund and/or tax credit, since the inventory as of December 2017 were only totally sold on March 15, 2018, and the BFO and SFO sold on February 2, 2018 and March 3, 2018 were from the purchases of 2017 which were not subjected to excise tax.91 Correspondingly, excise tax of Pl,SSO,OOO.OO must be disallowed as computed below: 92 \ 88 Exhibit "P-36", USB . 89 USB marked as Exhibit "P-29-2". 90 Exhibit "P-29", p. 7, Docket - Vol. IV, p. 1471. 91 Ibid. 92 See also Exhibit "P-29", p. 7, Docket - Vol. IV, p. 1471 .

DECISION CTA Case No. 10250 SL Harbor Bulk Termin al Corporation vs. Comm iss ioner ofInternal Revenue Page 19 of22 Particulars Amount I Liters of fuel sold not supported/qualified for tax l�!!!~!F~-=-=- ��-1- --:.~!~: *Includes fue l sold to Johnson Controls which was not yet registered with the SBMA at the time ofsale. As it is, only the sale of620,000 liters of fuel oil to JX Nippon on March 31, 2018 is properly supported. For the excise tax thereon to be refundable, it must be determined that the subject sales came from the importations with excise taxes paid on January 24, 2018, January 26, 2018, February 1, 2018, and March 20, 2018. Petitioner submitted, among others, the following documents, viz.:93 Exhibit Ref. ] Documentary Evidence I I����������. �~~;;~~�., :��IJ:.i1i1~~:ii;.~~h4.!.!i~~~:-~11J.~~~i~&~~~~I.;t.\?.~~~.~~-~i~~iE:.��� :. . ���I "P-32-1-1 to 1 Petitioner's Official Register Book and Schedule of Receipts and Removal for 'I 1-X~l-~:J::~J_::._J_Q_~~~~!?.~_r_2._9_L7____ .. ____._____ ��-----���--������----��-������--����-�-�-���������-��-����-��-�����-��--��----���-��������� .. "P-32-2" ! Petitioner's List of Ending Inventory as of 31 December 2017 duly submitted 1 :JI:_t�o.~iB.gI2R. Q~~~0.jg~~~f.i.~~t.~ :.:.:��:�.::::.:.::::: ::.��:.:::::. :.:.:I . i .:.:.:.:. ����:�: :��.:...--��- ...............................:. 1���� � � ��� ��;;�!>-32-3,, :::::.:: I_ . ''P-32:4:~-- _J_Bill g_f.!:~~i�1g_~!!h _!:::l.9..: !?.�~Q!_?.~Q!J. !?.~.-c:!~ted .?.QJ?..~~~r.n be~_ ?._Q}?... _ _ _.......! L................ ''P-33'' -�-���----.1_ Imp_<?..I.:t.~!i.2!! _Sch~9~!~_1_QJ~ _(f!!.~t.Q~~!:!~~1-----��--�� ---����-���-�������� _ _ _ . I. .:.~~~~~}:~~: :1~~~~~~~~~t~~i~~. ~~~~~?..~~~~~~~~�~1t~~n.~~1~ri~~~.~9!I . 1........ ..... ''.P..:.?..?.:.L:.4.~:. _j. !~PQ.f! �.!?E.:Y.!?~~!~~~~.i<?.!?.i.~.~.~.~.si..~Y. !h~ !?.Q~9~t..~9...2..�.J~~~!:I'.Y. 2..9.!? _ ""-33-1 .5" 1 Statement of Settlement of Duties and Taxes issued by the BOC dated 26 "P-33-2 .1" La.:~~~'.Y.-~Q!? . -- . - �����������������--- --��------- .. . - �- --- - �����-��-�-------��-����� Commercial Invoice dated 18 January 2018 issued by PetroChina 1 �-���----�-��- -���- ....i !�t!~~!:I!LQ.~!:Il(�_i!?g!:IP2~~)P.!~..:_h!9. :. ________ ........... _____ --���-�-���-��----- ............. . . : ;~~~~~:~:: ��-�������l�-~~!~~~~!~t~~'ii1~~~~~~ds.~9~t-~~6�~�~~~~~ij~~~~l? -20is�-����-��� i��----� ��������-���-����������-��-������������� �����������-������-���---����-���������-����-���-����-����-�--�-��������������������-�������---��)'������������������������-����������������������������-����-���������---��-����������'.)'.���������-����--������������������������������������-���������� i. _ . '.'.!:>.:}?.:_2.:4.:~ _j ).!!l.P9!:! .�.~!'.Y...Q~<:..J~~.'.l.!i(?.J.:l _i_~~~.~.9 ~Y. !h~!?.Qg 9!:1!~9. 2.~!!:1!:1~~- 2..9 .!.?.. I "P-33-2.5" 1 Statement of Settlement of Duties and Taxes issued by the BOC dated 24 jjJCano_lm:l!m:I'e.Yr.c?.iQa_]l~I-n���v-��o�--�i�ce��d-a--te�-d--2--9 !__ --�------ -� ___ -�-��-�-- -��------����--����----��---��----����-�-���������-���������� : "P-33-3 .1" January 2018 issued by Mercuria Energy l�� ~z.P.~~II~~ :.�.:..$1fr~1ti~}~�i::.~�i!.hj~~:~t.?.�?.~::� : :��: :�~ :�:������ I '.'P..:?.?..:?.A.'.: .J.As..~~~s..~~!:l! _~(?.!i~~i~?.~~9~Y!h~_!?.Q~ _9.!:1t.~9QJ_f_~!>I.~!:I!Y.?.9Jt . i " P-33-3.4" I' Tentative Import Entry Declaration issued by the BOC dated 0I February i' ���������������������-�-- ���������������-����-�---���- ����������1���2�����0����1�����8����������-������������������-��������-���������������������������--���������---�����������������-�-����-����������������--��-�---����������-������-���������������-��-�����������--�-�-�--�������������������������-�����������������������������������������������-������ "P-33-3 .5" , Statement of Settlement of Duties and Taxes issued by the BOC dated 0 I ...1! X~!?.~~!:I!Y. _?.Q!?. ��-� ... . --� . - ------ . - -- "P-33-4.1" , Commercial Invoice dated 14 March 2018 . - --- [. _ ~ ~B.~~~1~;-~]~~~~~n~~i~~~~~~~~~-~I~~~:i~~~~-.~:~~~~~~~~~~4.~i.~~-.1S.~-~~;~hi�ii~---�:::. � j 1i. J~pgJ1�.J.:l!!Y. P~~!<.~.r!:lt.ig~ _i~~~~9. !>x. !h~!?.9~ 9<.~.!~9J?.M!:I~~h ~9!?. 1� '.'.!:>.:.?}:4.:4.:: Statement of Settlement of Duties and Taxes issued by the BOC dated 20 " P-33-4.5 " 1--�-��-------- ____ ---��I 1-------- ''P-3:!::____ jL__M�_~l~:ls~_r:.rh.!!?:\_!QY.._!_g�.f.__~_a_l_es�_-�p��-~��E��_���F��_�-!-�O���d��~--s�-:--_--!��.��f���.��9��E�_��!�!-:-!�~-.�J��~��~�-_--g--u-a--r-t��e-�~���o���f-�2--Q-��J--_8�-----���-�----�------------�-----�-�--�----�-�-���----�-����! l1 "P-34-1 to 1 ATP with corresponding Printer's Certificate of Receipts and/or Invoice and ' P.:}4:J~:� _11 .�.~2~ �!a._t~r.r.!~~L .. 1 "P-34-2" Comparative presentation of Sales vs. Revenue reported in Quarterly Income ~--��-�����---�------- .1!:1_~(!~~- Q~~rte~L.....---����--���--------�����-�---��-------��-----------��������������������������-�-�-��----����------' \ 93 Formal Offer ofEvidence, Docket - Vol. IV, pp. 1509 to 1513.

DECISION CTA Case No. 10250 SL Harb or Bulk Terminal Corporation vs. Commissioner ofInternal Revenue Page 20 of22 Exhibit Ref. i Documentary Evidence \... . .'~!'_:~4:~'-' __J _�!:I~~~ry_QfM\~~i!l.gJJ.:~.Y.S>.!g_~_~fQrJ~!_q~~!:!~.rgf 2QJ?. -�--��--- ---�--�1 ! Summary of Sold Inventories from 01 January 2018 to 15 March 2018 \ " P-34-4" ' 1.::::::=:~:~~3~;~:=::.:j:~~r~~f;~~:ig~~~f.{~k~~~i.:.s.!Q~iit.~:i:?.:9Ii~:::::: �::=: ::~: ..~:=::__ ,__ -��! i_ _"~:?5:l_" _ _j_~_~mma!)' ofL~�.~1 Purchases_ftomO l_!~!l.~ 2018 to 15 Mar~_h_f018 ________j , I .;~~-~=j:: ---j-~~~~~~-~i~~~1~~~~io~{~~~~~i~-~~~~~i~-i-H;5;-~~~~~-i~i~whl~h� 1--- -1 i " P-36" --�j,� 1.........................----�--.................. �Q~~fr~_r.t]_.~9._!!_p_l!Egh~~~.~----- .... ----��-����--������������������-�����������--�����-�������������������������������-��������������-�� .................................! Schedule of Sales to Tax Exempt Entities for the period of 02 February 2018 ! i I I to 26 March 2018 . ���- ����������- ...I ;;1'~36=1:1:�-p-:)6~ -r s~-ies rn~oi~~~-r;~-ii1~� r;~ri~d� ;r -o2F~b~~ry:2oi8 to .26 �Ni~~~i120i8 I ....2........1.........a.....n......d.....P......-....3.....6.....-....3....-.1...."....._;!..............................._ ......................................_-........_.................................,_..__............................................- ......____,.....................................................................................................--..�-�1 "P-36-1.2 to P-36- Withdrawal Certificates for the period of 02 February 2018 to 26 March 2018 i ;'...............-1....2..A....D...."..........._..lI.. -...............................................................................__,.............................................................................. . --.1---�----�-�------.....,.__....____........_____,_ _ _,. _.____,_ ,.....-..._.____. . . . . . . . ., I "P-36-1.3 to P-36- 1 Delivery Notes for the period of02 February 2018 to 26 March 2018 , I ii--�-..............-1.3....A.......D....._"__,............... l J "P-36-1 .4 to P-36- Proof of Collection for sales made to tax exempt entities for the period of 02 1 ! . . .. ~:~:~ . Y~~~Q!~!S>.~~~.'.l.~E~}Ql~ .... ... . .... I The above pieces of evidence submitted, however, are not enough to allow the Court to trace the movement of petitioner's fuel oil inventory using the first-in, first-out (FIFO) method.94 Petitioner submitted the Official Register Books only for the month of December 2017.95 To be sure, it should have provided its properly supported fuel oil inventory record and submitted the sales invoices and other pertinent documents of all its sales for the 1st quarter of 2018 for the Court to properly determine that the fuel oil sold to tax-exempt entities came from the imported lot that petitioner paid for excise taxes on January 24, 2018,96 January 26, 2018,97 February 1, 201898 and March 20, 2018.99 It is also worthy to note that the ICPA reported a significant number of missing sales invoices for the 1st quarter of 2018. 100 While the sale of 620,000 liters of petroleum products to JX Nippon on March 31, 2018 may have been amply substantiated as per ICPA verification, the evidence presented by the petitioner still failed to sufficiently prove that the same came from petitioner's importation for which it paid excise taxes on January 24, 2018, January 26, 2018, February 1, 2018, and March 20, 2018. As such, the equivalent excise tax thereon amounting to P1,550,000.00101 cannot be considered refundable as petitioner fell short in proving compliance with the third requirement. Consequently, its claim for issuance of tax credit certificate cannot prosper. \ 94 Pursuant to Section 8(b) of Revenue Regulations No. 2-2018. 95 Exhibit "P-6",Docket-Vol.IV, pp. l521 to 1548. 96 Exhibit "P-33-2.5", USB marked as Exhibit "P-29-2". 97 Exhibit " P-33-1 .5", USB marked as Ex hibit " P-29-2". 98 Exhibit "P-33-3 .5", USB marked as Exhibit "P-29-2". 99 Exhibit " P-33-4.5", USB marked as Exhibit "P-29-2". 100 Exhibit " P-34-3", USB marked as Exhibit " P-29-2". 101 Computed as follows: [620,000 liters x P2.50 excise tax per liter]

DECISION CTA Case No. 10250 SL Harbor Bulk Terminal Corporation vs. Commissioner of Internal Revenue Page 21 of22 In Coca-Cola Bottlers Philippines, Inc. vs. Commissioner of Internal Revenue, 102 the Supreme Court declared: On a final note, the Court reiterates its consistent ruling that actions for tax refund or credit, as in the instant case, are in the nature of a claim for exemption and the law is not only construed in strictissimi juris against the taxpayer, but also the pieces of evidence presented entitling a taxpayer to an exemption is strictissimi scrutinized and must be duly proven. The burden is on the taxpayer to show that he (or she) has strictly complied with the conditions for the grant of the tax refund or credit. Since taxes are the lifeblood of the government, tax laws must be faithfully and strictly implemented as they are not intended to be liberally construed. xxx (Emphasis supplied) Accordingly, it is incumbent upon petitioner to clearly show the factual basis for claiming that it is entitled to a tax credit which, as discussed above, it failed to do so in the present case. In fine, the Court finds that petitioner is not entitled to the tax credit subject of the present claim. WHEREFORE, in light of the foregoing considerations, the present Amended Petition for Review is DENIED for lack of merit. SO ORDERED. Co~t.�~RES Associate Justice WE CONCUR: ~- ~ ., '-- MA. BELEN M. RINGPIS-LIBAN Associate Justice 102 G.R. No. 222428, February 19, 2018 .

DECISION CTA Case No. I0250 SL Harbor Bulk Terminal Corporation vs. Commissioner ofInternal Revenue Page 22 of22 ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ~. ~ -, "-- MA. BELEN M. RINGPIS-LIBAN Associate Justice Division Chairperson CERTIFICATION Pursuant to Article VIII, Section 13 ofthe 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