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

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY THIRD DIVISION PHILIPPINE AIRLINES, INC., CTA CASE NO. 7935 Petitioner, Me mbers: -versus- BAUTISTA, Chairperson PALANCA-ENRIQUEZ, and C O T A N G C O -M A N A L A S T A S , J J. COMMISSIONER OF INTERNAL REVENUE and COMMISSIONER Promulgated: OF CUSTOMS, Respondent. DEC2 0 2012 X - - - - - - - - - - - - - - - - - - - - - - - - - - - ~- _/!_ '(.t:" ~ : ,._. - - - - X DECISION COTANGCO-MANALASTAS, J. : This resolves the instant Petition for Rev iew filed by pe tition er Philippine Airlin es, Inc. (PAL) to seek the re fund of the total amount of Pl 0,889,672.72 specific taxes paid, which were erroneously collected from petitioner. THE FACTS Petitioner PAL is a domestic corporation duly organized and existing under and by virtue of the laws of th e Re public of the Philippines, with registered address at PNB Financial Center, Pre sident Diosdado P. Macapagal Ave nu e, CCP Compl ex, Pasay City, Metro Manila.l {- 1 Par. 1, Facts, Joint Stipulation of Facts and Issues (JSFI), docket, p. 260 .

DECISION CTi\ CASE NO. 7935 On the other hand, respondent Commissioner of Internal Revenue (CIR) is the government agency in charge of the assessment and collection of all national internal revenue taxes, fees, charges, including excise taxes paid on distilled spirits, wines, fermented liquors, cigars and cigarelles under Sections 141, 142, 143, and 145, respectively, of the National Internal Revenue Code (NIRC) of 1997, as amended. She holds office at the Bureau of Internal Revenue (SIR) National Office Building, Agham Road, Diliman, Quezon City.2 Likewise named as respondent is the Commissioner of Customs (COC), who is the Commissioner of the Bureau of Customs (SOC), which is the government agency in charge of the assessment and collection of customs duties and other lawful revenues from imported articles, including excise taxes imposed on distilled spirits, wines, fermented liquors, cigars and cigarettes under Sections 141, 142, 143 and 145, respectively, of the NIRC of 1997, as amended, on the basis of the delegated authority of respondent CIR, through an Authority to Release Imported Goods (SIR Form No. 1918) duly issued by respondent CIR addressed to respondent COC in accordance with Section 12(a) of the NIRC, as amended.3 On cJune 11, 1978, petitioner was granted a franchise to establish, operate, and maintain air transport services within the{- 2 Par. 2, Facts, cJSFI, docket, pp . 260 -261. 3 Par. 3, Facts, JSFI, docket, p. 261.

DECISION CTA CASE NO. 7935 Philippines and other countries by Presidential Decree No. 1590 (PO 1590).4 On January 1, 2005, Republic Act No. 9334 (RA 9334), took effect. Section 6 of RA 9334 provides: "Section 131. Payment of Excise Taxes on Imported Articles.- (A) Person 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 customs house, or by the person who is found in possession of articles which are exempt from excise taxes other than those legally entitled to exemption. In the case of tax-free articles brought or imported into the Philippines by persons, entities, or agencies exempt from tax which are subsequently sold , transfe rred or exchanged in the Philippines to non -exempt persons or entities, the purchasers or recipients shaJI be considered the importers thereof, and shall be liable for he duty and internal revenue lax due on such importation . The provision of any special or general law to the contrary notwithstanding, the importation of cigars and cigarettes, distilled spirits, fermented liquors and wines into the Philippines, even if destined for tax and duty-free shops, shall be subject to all applicable taxes, duties, charges, including excise taxes due thereon. This shall apply to cigars and cigarettes, distilled spirits, fermented liquors and wines brought directly into the duly chartered or legislated freeports of the Subic Special Economic and Freeport Zone , created under Republic Act No. 7227; the Cagayan Special Economic Zone and Freeport, created under Republic Act No . 7922 ; and the Zamboanga City Special Economic Zone , created under Republic Act No. 7903, and such other freeporls as may hereafter be established or created by law: Provided, further, That importations of cigars and cigarettes, distilled spirits, fermented liquors and wines made directly by a government-owned and operated duty-free shop, like the Duly- Free Philippines (DFP) , shall be exempted from all applicable duties only: Provided, still further, That such articles directly imported by a government-owned and operated duty-free shop, like the Duty-Free Philippines, shall be labeled 'duty-free' and 'not for resale': Provided, finally, That the removal and transfer of tax and duty-free/-- 4 Pa r. 4, Facts , JSFI , docket , p. 261.

DECISION CTA CASE NO. 7935 goods, products, machinery, equipment and other similar articles other than cigars and cigarettes, distilled spirits, fermented liquors and wines, from one freeport to another freeport, shall not be deemed an introduction into the Philippine customs territory." On February 3, 2005, then BIR Commissioner Guillermo Parayno wrote then BOC Commissioner George M. Jereos, calling allenlion to Section 6 of RA 9334 and the failure of the BOC to collect excise tax "on all importations destined for Duty Free Philippines (DFP) and the Freeport zones such as the Subic Bay Freeport Zone". Furthermore, in said lellcr, the BI R requested the BOC that the excise taxes due on the imported alcohol and tobacco products brought to the DFP and the Freeport zones be immediately collected.5 On February 4, 2005, then Commissioner George M. ,Jereos issued a Memorandum lo the BOC officers and personnel directing them to "effect collection of excise tax due on imported alcohol and tobacco products, even if destined to Duly Free Philippines and lo Freeport zones."6 On March 1, 2005, the new BOC Commissioner Alberto D. Lina issued Customs Memorandum Order No. 13-2005 (CMO 13-2005), which provided for the "Immediate Collection at the Port of Discharge of Duties, Taxes and Other Charges, Including Excise Tax Due on All Importations of Alcohol and Tobacco Products Destined for Duty Free/- s Exhibit "D". 6 Exhibit "E".

DECISION CTA CASE NO. 7935 Shops and Free-Port Zones pursuant to RA No. 9334 and BIR Revenue Regulations No. 13-2004."7 Paragraph IV of CMO 13-2005, subtitled "Operational Provisions", required the accomplishment of consumption entries, instead of the previously required warehouse entries, as a requisite for the clearance of imported cigarettes and liquors, to wit: 8 "In lieu of the warehousing entry required under Customs Administrative Order No. l-97 and Customs Memorandum Order Nos. 17-97 and 17 -97A, aJl shipments of cigar and cigarettes, distilled spirits, wines and liquors destined for duty-free shops and free-port zones shall be covered by consumption entries filed at the Port of Discharge following the procedures for cargo clearance under CAO Nos. 2-95 and 5-2001, CMO Nos. 3-2000 and 3-2001 and other existing customs rules and regulations." On April 4, 2005, petitioner wrote a letter to Atty. Felipe Bartolome, District Collector of Customs, Manila International Container Port, Bureau of Customs, Manila, requesting the immediate release of its shipment alleging that the articles imported are for its commissary supplies; which are exempt from all taxes under Section 13 of PO 1590 .9 Petitioner's April 4, 2005 letter was endorsed lo the Legal Service of the BOC, which responded to its request for release of the imported cigarettes by issuing a Memorandum on April 25, 2005 addressed to COC Commissioner Alberto D. Lina. The April 25, 2005 Memorandum simply expressed that petitioner is "liable for the payment of excise lax on all their importation of the subject articles,{- 7 Exhibit "F" s Par. 10, Facts, JSFI, docket, p. 264. 9 Exhibit "G".

D E CISION CTA CASE NO . 7935 Page 6 of 3 0 eve n und e r th e o ld a nd prev1ous S ec tion 131 of the NIRC of 197 7 ; subj ect howeve r to duly dra wbac k a nd / or lax refund , if a ppli cable" . Considering that the subsequent importations of wine, liquor a nd c igarc lle s for pe tition e r 's commissa ry supp lie s we re a lso w it hh e ld re leas e from t h e customs ports pe ndin g pay m e nt of taxe s , duti e s , a nd fees with dange r of s poi la ge a nd possib le lo ss whil e in storage ;1o a nd consid e rin g furt h er the a ll eged fa ilure of th e COC lo la ke fo rm a l ac tion o n th e Ap r il 2 5 , 2 005 recomme nd a tion of th e SOC 's Lega l Se rvi ce, pe tition e r pa id und e r prote st th e exc ise taxe s du e o n th e fol lowin g importa tions , deta iled a s follo w s : Import Articles Date of A TRIG Amount Entry Arrival No. Due M ild Seven No . Cigarette March 29, 74453 p 500 ,000 .00 3722 2006 (Exh . S) Chivas . 390 ,096 .00 3724 Real (Exh . J) 71\ 1\82 W h i s ky March 13 , (Exh . T) 250 ,000 .00 - 175,000 .00 West King 2006 74828 20 ,563 .20 3990 Si ze (Exh . K) (Exh . U) 3 9 3, 120 .00 1--� Cigaret tes April 14, 18 0 ,972. 00 2 006 (Exh . L) 7445 1 14 3 09 Davidoff (Exh . V) 750,000 .00 143 13 Lights Nove mber 3 0 , 8 60 ,267.52 2005 71\1\1\ 5 143 14 Camus XO (Exh . W) Superi eur (Exh . M 143 17 December 15, 7454 4 Pi p er 2005 (Exh . (Exh . X) 3729 H eidsieck N) 7442 0 3730 Vin De (Exh . Y) December 10 , Table 2 005 (Exh . 74829 (0) (Exh . 8alnc GG) Decemb er 15, 71\ 9 15 Vin De 2 00 5 (Exh . P) (Exh . HH) Table April 5, 2006 (Exh . 88) Rouge March 27, Salem M 2 006 (Exh . King Cigarette CC) Carlos I IO Pa r . 15 , Petit io n for Rev iew, d oc ke t , p . 6.

DECI SI ON CT/\ CASE NO . 7935 3732 Roy al March 3 1, 7'1 860 6'1 8, 88 9.9 2 4056 Salute 2 006 (Exh . P~ (Exh . II) 500 ,000.00 Whisky, 7) 74874 Bal lar1tine (Exh . Scotch April 19 , QQ) Wh i skey , 2006 (Exh . Carlos l Brandy LL) and Martel VSOP Cognac Mild Seven Lights Ci garettes 14 302 Remy October 29 , Exh . RR 745, 3 5 5. 52 Martin XO 2005 7'1 589 653,728 .32 Rem y (Exh . MM) (Exh . 1,0 6 9,95 !. 68 Marti n SS) VSOP Oc tob er 22, 74455 6 53,728 .32 2005 (Exh . (Exh 610 ,500 .24 Pi per CCC) 2, 187 ,5 00 .00 H eidsieck NN) November ! 9, 74546 300 ,000.00 !'1303 J & B rare (Exh 2005 (Exh . DOD) JW Black W) Label 7454 7 Nove mber 28 , (Exh . 14 30 5 Jack 2 005 (Exh . EEE) Daniels, WW) 74586 Regal (Exh Whisky, November 2, F FF) cutty sark , 200 5 (Exh . roy al 5828 1 salute, XX) (E x h fin 1andia November ! 1, GGG) vodka 2005 (Exh . 14 306 J&B YY) Rare; JW Bl ac k September 20 , Lab el 2005 (Exh . ZZ) 14 3 10 Ch ivas '-- Regal Whisky ----- -- 14 30 7 Win sto n Red Ki ng Si ze; Win ston Lights King Size; Mild Seven 10346 Davidoff Cl assi c Ligh ts On April 22, 2 008 , pe ti tion e r simul tan eou s ly fil ed be fo re res pond e n t CIR three (3 ) writte n c la ims fo r re fund 11 of exc ise taxes/- I I Exhibits "A/\", "KK", "U U", and "III".

DECISION CTA CASE NO. 7935 a ll eged to h a ve bee n erron eously pa id on <Jun e 2 5 , 2 007 12, July 10 , 2007 13, July 20, 20071 4, a nd July 30 , 2007 15 . However, respondent CIR fa il ed to act on th e s a id administra tive claims for re fund . He n ce, pe tition e r fil ed t h e insta nt Pe tition for Revi ew on Jun e 24 , 2009 . Re spondent CIR filed he r Answe r and inte rposed th e following Spec ia l a nd Affirm a tive De fe nse s: "4 . Pctilioncr 's aJlcged cl ai m for re fund is s ubj ect to a dminislrativc investiga tion/ examina tion by the Bureau; 5. Th e amounl of P10 ,889 ,67 2. 7 2 be in g c la im e d by pctilioncr as specific taxes allegedly paid on Jun e 2 5, 2 007 , July 11 , 2007 (a nd) July 20 , 2 007 and July 30 , 2 007 was nol prope rly docum e nted; 6 . In a n ac lion for re fund , th e burd e n of proof is on Lh e Lax paye r Lo c sla blish its ri ghl Lo re fund , and fa ilure to suslain Lh e burden 1s fa ta l Lo th e claim fo r refund/ credit; 7 . Claims for refund a re constru ed slrictly againsl th e c la im a nl for Lhc s a m e pa rla k e Lh e n a ture of e xe mption from Laxa lion (Commiss ione r of Inte rnal Revenue us. Led esma, 31 S CRA 95) and su c h , Lhcy a r e looked upon wilh disfavor. Wes te rn Minolco Corp. us. Commiss ione r of Int e rnal Re ve nue, 12 4 SCRA 12 11)."1 6 On th e oth e r h a nd , re spond e n t COC fil e d his Comme nt 17 o n August 10, 2009. Therea fte r, a Notice of Pre-Tri a l Confe re nce wa s issu ed by th e Court on August 12, 2 009, s e llin g th e cas e for pre - tri a l confe re n ce on(- 12 Exhibit "R". 13 Ex hibit "FI�". 14 Exhibit "PP". 15 Exhibit "BB JJ ". 16 Doc ket, pp. 186. 17 Doc k et, pp . 200-2 14.

DECISION CTA CASE NO. 7935 August 28, 2009. Accordingly, Petitioner's Pre-Trial Briefl 8 was filed on August 24, 2009; while Respondent's Pre-Trial Briefl9 was filed on September 3, 2009. On November 20, 2009, the parties filed their Joint Stipulation of Facts and Issues20, which the Court approved in a Resolution 21 dated November 26, 2009. In the same Resolution, the pre-trial was considered terminated. During trial, petitione r presented and formally offered its documentary and testimonial evidence, and in the Resolutions dated Novembe r 10, 2011 22 and ,January 26, 2012 23, Exhibits "8" to "WWW-3" were admilled as part of petitioner's documentary evidence. On the other hand , respondents' counsels manifested that they will not be presenting evidence. Thus, the parties were granted thirty (30) days from March 7, 2012, or until April 6, 2012 to submit their memoranda. 21 On April 2, 201225 and April 10, 2012 26 , the Memoranda for respondent CIR and respondent COC were filed, respective ly. Petitioner's Memorandum was filed through registered mail on May 4, { 18 Docket, pp. 217 - 226. 19 Docket, pp . 234-240. 2o Docket, pp. 260 -266. 21 Docket, p. 268. 22 Docket, pp. 897-899. 23 Docket, pp. 912 -913. 24 Resolution dated March 23,2012, docket, p. 917 . 2" Docket, pp. 918-929 . 26 Docket, pp. 934-960.

DECISION CTA CASE NO . 7935 Page 10of30 2012. 27 Thereafter, the case was submillcd for decision on May 15, 2012. 28 ISSUES The parties submitted the following tssucs for this Court's disposition: "1. Whether or not the Commissioner of Customs is merely an agent of the Commissioner of Internal Revenue deputized to collect internal revenue taxes on imported goods, and therefore, did not mcur any liability from the collection of the taxes due; 2. Whether or not petitioner's franchise, Presidential Decree No. 1590, has been amended by Republic Act No. 9334 in so far as petitioner's exemption from the payment of specific taxes on all its importations of cigarettes, liquor, and wine for its catering and commissary supplies for international consumption, is concerned; 3. Whether or not petitioner's importations of liquors and cigarettes form part of its commissary supplies for international Oights; 4. Whether or not PAL ts entitled to a refund of the following specific taxes: (1) Php 1,909,751.20 paid under protest 25 June 2007; (2) Php 2,259,157.44 paid under protest on 11 July 2007; (3) Php 1,899,083.84 paid under protest on 20 July 2007;and (4) Php 4,821,680.24 paid under protest on 30 July 2007; or a total amount Php 10,889,672.72 5. Whether or not the specific taxes subject of petitioner's claim for refund have actually been paid. 29? n Docke t, pp. 966-995 . 2.8 Resolution dated May 15,2012, docket , p. 997 . J.9 Docket, pp . 264 - 265.

DECISION CTA CASE NO. 7935 THERUUNGOFTHECOURT As regards the first issue, respondent COC avers that it merely acted for and in behalf of the CIR in assessing and collecting excise lax on imported articles. And where the COC acted on matters within the scope of his authority, he did not acquire any right or incurred any liability from the collection or the taxes due. On this matter, Section 2 of Rule 3 of the Revised Rules of Court cxplicilly provides that every action must be prosecuted and defended in the name of the real party in interest. Relevanlly, in the case of Walter Ascona Lee, et al. vs. Han. Manuel Romillo, Jr., et al. 30, the High Court said: "A real party in interest-plaintiff is one who has a legal right while a real party in interest-defendant is one who has a correlative legal obligation whose act or omission violates the legal rights of the former ." (Emphasis supplied) In this case, it may be observed that the kind of lax subject of the instant Petition for Review is excise lax which is imposed under Title VI of the NIRC. Being an internal revenue lax, the power to collect excise taxes is vested on the CIR . As for respondent COC, he was the one who collected from petitioner the excise taxes as the constituted agent of the CIR. Accordingly, both the CIR and the COC arc real parties in interest-defendants in this case. Neverthe less, il can be noted that the COC may be named as a defendant in this case /--- 3o G.R. No. L -60937, May 28, 1988.

DECISION CT/\ CASE NO . 7935 on ly in h is capacity as the constituted agent of the CIR m accordance with Section 12 (a ) o f t h e NI RC of 1997, as amended. Now as to the determination of whether petitioner complied with the procedures governing the proper filing of administrative claims for refund, the Court found relevant the provisions of Sections 204 and 229 of the NIRC of 1997, as amended, which provides for the procedure govern ing the refund or recovery of erroneously collected internal revenue taxes. The pertinent portion of Sections 204 and 229 of the NIRC of 1997, as amended reads: "SEC. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes. -The Commissioner may- XXX XXX XXX "(C) C redit or refund taxes erroneously or illegally received or pen alties 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 stamped that have been rendered unfit for use and refun d 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." "SEC.229. Recovery of Tax Erroneously or fllegally 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 coll ected wit h ou t authority, or of any sum alleged to have been excessive ly 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 (__

D E CISION CTA CAS E NO . 7935 Page 13 of 3 0 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 ." (Emphas is supplied) Reco rds of t hi s ca s e would show th a t pe t ition e r on diffe re n t d a te s pa id its excise taxe s for its importa tion of co mmi ssary a nd ca te rin g supp lies and fi led th e corre sponding a dministra tive a nd judicia l c la ims for re fund for su c h taxe s pa id , d e ta iled a s follo ws : Import Total Official Date of Date of Date of La st Day Entry Amount Paid Receipt Payment Filing Filing fo r No. No. June 25, the the Filing 2007 Ad minis Judic ial the 3722 Pl ,909 ,75 1.20 140945962 trative 3724 (Exh. R) Claim Judicial Claim Cla im June 24, April 22, 2009 June 24, 2008 2009 3990 14309 143 13 143 14 143 17 3729 2,259, 157.44 14 1 165787 July 11, April 22, June 24, July 10 , 2007 2008 2009 2009 3730 (Exh . FF) July 20, July 20, 3732 1, 8 9 9 , 0 8 3 . 8 4 14 1733426 2007 April 22, June 24, 2009 * (Exh . PP) 2008 2009 --- July 30, July 29, 2007 Apr il 22 , June 24, 2009 11056 2008 2009 14302 14303 14305 4 ,82 1,680.24 14 1820445 14306 (Exh . 888) 14310 14307 10346 - *,July 19 , 2 009 1s a Sund ay Pe rusa l of above ta ble would show th a t both t h e a dministrative and judici a l claims for re fund we re fil ed within t h e two-year pre scriptive pe r iod provid ed by la w. Now , th e Court sh a ll proceed with th e re solu t ion o f th e re mainin g issu e s submillcd for this Court's disposition. {

DECISION CT/\ CASE NO. 7935 Petitioner avers that RA 9334 did not amend petitioner's franchise insofar as its exemption from payment of excise tax on the wmes and cigarettes imported by petitioner for international consumption is concerned. Accordingly, petitioner believes that it can still enjoy the exemption granted under its charter and is thus entitled to a refund of the excise tax it allegedly paid on its importation of the subject articles for international consumption However, both respondent CIR and COC claim otherwise. Respondent CIR alleges that a close reading of the third paragraph of Section 131 of the National Internal Revenue Code, as amended by RA 9334, reveals the unmistakable intent of Congress to withdraw exemptions granted to petitioner under Section 6 of PO 1590. First, Section 6 of RA 9334 employs the clear and all- cncompassmg phrase "The provision of any special or general law to the contrary notwithstanding." RA 9334 therefore repeals any inconsistent provision whether contained in general or special statues like PO 1590, which is petitioner's franchise. Second, Section 6 of RA 9334 mandates the co ll ection of excise taxes on all importations of cigars, cigarettes and liquor without distinction. Said provision contains no proviso exempting petitioner's importation of said wmes and tobacco products for its commissary and catering supplies. Respondent COC likewise avers that a special statute, as the term is generally understood, is one which relates particular things of j,- a c lass or to a particular portion or section of the statute only. Tax

DECISION CTA CASE NO. 7935 Laws lreal of a special subject, i.e. taxes. As such, tax laws are special laws. And a perusal of RA 9334 reveals that it treats of only one subject - tax, or specifically, excise lax. The oft-repeated rule is clear - on a specific matter, the special law shall prevail over the general law, which shall be resorted to only to supply deficiencies in the former. In the instant case, RA 9334 is the special and later law that governs the imposition of excise taxes on alcoholic and tobacco products. Section 13 of RA 9334, in no uncertain terms, revoked petitioner's exemption under PO 1590 when it categorically required the payment of the applicable taxes, duties, charges, including excise taxes on all importation of cigars and cigarettes, distilled spirits, fermented liquors, and wines into the Philippines, even if destined for lax and duty-free shops. Furthermore, respondent COC alleges that Congress intended lo subject the importations of cigars and cigarelles, distilled spirits, fermented liquors, and wines into the Philippines to taxes and duties, including excise taxes. The statement "the provision of any special or general law lo the contrary notwithstanding", couched with the repealing clause of the statute, strongly manifests the intent of Congress to amend any special or general law inconsistent with it, like PO 1590. For clearly, the exemption granted lo petitioner under the former enactment is inconsistent and irreconcilable with the more recent law- RA 9334. ~

D ~ CISION CT/\ CASE NO . 7935 Page 16 of 3 0 On th e 1ssue of wh e ther or not S ection 6 of RA 9 3 34 re pealed th e exe mption granted to pe tition e r und e r PO 1590, th e Court c ite s S ec tion 6 of RA 9334, to wit: "Section 6. Seclion 131 of lhe Nationa l Inte rnal Reve nu e Code of 1997 , as am e nded , is h e re by am e nded to read as follows : Scclion 13 1. Payme nt of Excise Taxes on Imported Articles. - (A) Person Liabl e . - Excise laxe s on importe d a rticl e s sh a ll be paid by lhe owner or importe r lo lh e Customs Offi ce rs , conforma bly wilh lhe regula tions of lhe De pa rtment of fin a nce and be fore lh e re leas e of su c h art icles from lh e c ustomshouse , or by the pe rson who is found in possession of articles which are exempt from excise laxes other than those legally entitled to exemption. In the case of lax-free articl e s brou gh t or importe d into lh e Philippines by persons , entilies, or agen cies exempt from l ax which are subsequ e nlly sold , transfe rre d or exchanged in lhe Philippines to non -exempl persons or c nlili es , th e purchase rs or recipie nts shall be conside red lh e importers th e reof, a nd shall be liable for th e duty and internal revenue tax du e on such importa tion . The provision of any special or general law to the contrary notwithstanding , lh c importa tion of c igars an d c igar e tte s , distill ed spirils, fe rm e nted liquors and win es inlo lh e Philippine s, eve n if d e stin ed for lax a nd duty- free shops , shall be subj ect to all a pplicable taxes , duties , ch a rges , including excise taxes due thereon. This shall a pply to cigars a nd cigare tte s , distill ed spirits , fe rme nted liquors and wines brou ghl directly inlo lh e duly c h ar te red o r legisl a ted free porls of lh e Subi c Special Economic a nd Freeport Zone, c realed und e r Re publi c Ac l No . 7 22 7; lhe Cagayan Special Economic Zone and Freeport, crealed und e r Re public Act No. 79 2 2 ; and lh e Zamboan ga Cily Special Economic Zon e, c reated und e r Re publi c Acl No. 7903, and such olh e r frce porls a s m ay h e re afte r be e sta blished or crea ted by la w: Provided , fu rthe r, Th a l imporlalions of ci gars and c igare lles , distille d spirils, fe rmented liquors and win e s m a d e direc tly by a gove rnm e nt-owned and ope ra te d duly -free shop , like lh e Duly - Free Philippin e s (DFP) , sh al l be e xe mpted from al l a ppli cabl e du lies only: Pro vid ed , s till fu rthe r, Tha l s u ch arti c le s direclly imported by a gove rnm e nt-ow n ed an d opera ted duly- free shop, like lh e Duly-Free Philippin e s , shaJl b e la beled 'duly- free' and 'nol for re s a le' : Provid ed , fin a lly, Thal lh c re moval and lran sfe r o f tax and duty - free /--

DECISION CTA CASE NO. 7935 goods, products, machinery, equipment and other similar articles other than cigars and cigarettes, distilled spirits, fermented liquors and wines, from one freeport to another freeport, shall not be deemed an introduction into the Philippine customs territory." (Emphasis supplied) There is nothing in the above-quoted provision which would show that the exemptions granted lo petitioner under PO 1590 are a lready repealed. It is true that Section 6 of RA 9334 slates the all-encompassing phrase "the provision of any special or general law to the contrary notwithstanding". However, such phrase cannot be considered as an express repeal of the exemptions granted under petitioner's franchise because it fails to specifically identify PO 1590 as one of the acts intended to be repealed. As laws are presumed to be passed with deliberation and with knowledge of all existing ones on the subject, it is logical to conclude that in passing a statute, it is not intended to interfere with or abrogate a former law relating to the same subject matter, unless the repugnancy between the two 1s not only irreconcilable but a lso clear and convincing as a result of the language used, or unless the latter Act fully embraces the subject matter of the earlier. It is a cardinal rule in statutory construction that implied repeals arc disfavored and will not be so declared unless the intent of the legislators is manifest.31 Thus, all doubts must be exerted m order to harmonize and give effect to all laws on the subject. 32 /-- 3 J Tan, et al., vs. }Jerefi.a, G.R. No. 149743, February 18, 2005. 32 Agpalo, Statutory Construction, 2003 Edition, pp. 405.

DECISION CTA CASE NO. 7935 In this case, the Court finds no repugnancy between the provisions of PO 1590 and Section 131 of the Nl RC of 1997, as amended by RA 9334. In fact, Section 131 actually recognized the existence of entities that are legally entitled to exemption, such as herein petitioner. The pertinent portion of Section 131 reads: "Section 131. Payment of Excise Taxes on Imported Articles. - (A) Person Liable. - Excise taxes on imported articles shall be paid by the owner or importer to the Customs Officers, conformab ly with the regulations of the Department of finance and before the release of such articles from the customshouse, or by the person who is found in possession of articles which are exempt from excise taxes other than those legally e ntitled to ex e mption ." (Emphasis supplied) Since no irreconcilable repugnancy exist between the provisions of PO 1590 and RA 9334, the same should be interpreted in harmony with one another in order to give effect to all laws on the subject. In this regard, the ru les of statutory construction dictate that on a specific mallcr, the special law shall prevail over the general law, which shall be resorted to only to supply deficiencies in the former. In addition, where there are two statutes, the earlier special and the later general - the terms of the general broad enough to include the matter provided for in the special - the fact that one is special and the other is general creates a presumption that the special is to be considered as remaining an exception to the general, one as a general law of the land, the other as the law of a particular case.33 {- 33 Commissioner of Internal Revenue vs. Philippine Airlines, G.R. No. 180066, July 7, 2009.

DECISION CTA CASE NO. 7935 Lel il be noted lhal PO 1590 is a special Jaw which governs the franchise of petitioner. Significanlly, in the case of Commissioner of Internal Revenue us. Central Luzon Drug Corporation34, the High Court classified the Tax Code as a general law, the pertinent portion of which reads: "Sixth and last, RA 7432 is a special law that should prevail over the Tax Code -- a general law . 'x x x IT]he rule is that on a specific matter the speciaJ law shaJl prevail over the generaJ law, which shall be resorted to only to supply deficiencies in the former.' In addition, 'lwlhere there are two statu Les, the earlier speciaJ and the later gene raJ -- the terms of the generaJ broad enough to include the matter provided for in the special -- the fact that one is speciaJ and the other is genera] creates a presumption that the speciaJ is to be considered as remaining an exception to the gencraJ, one as a general law of Lhe land, the other as the law of a particular case. ' 'It is a canon of statu Lory construction that a later statute, general in its terms and not expressly repealing a prior speciaJ statute, will ordinarily not affect the speciaJ provisions of such earlier statute." (Emphasis supplied) Accordingly, between the provisions of PO 1590, which, among others, specifically provides for petitioner's lax exemption on its importation of commissary supplies for international consumption, as against the provisions of the NlRC of 1997, as amended by RA 9334, which is a general law, the former necessarily prevails. In view of respondent's failure to show the clear intent of the legislature to repeal lhc exemption granted to petitioner under PO 1590, the Court shall now proceed in determining whether petitioner JS entitled to be refunded of the amount claimed on the basis of the exemptions granted under its charter. ~ 34 G.R . No . 159647, April 15 , 2005.

DECISION CTA CASE NO. 7935 The Court finds relevant the pertinent portions of Section 13 of PO 1590, which read: "Section 13. In consideration of the franchise and rights hereby granted, the grantee shall pay to the Philippine Government during the life of this franchise whichever of subsections (a) and (b) hereunder will result in a lower tax: (a) The basic corporate income lax based on the grantee's annual nel taxable income computed in accordance with the provisions of the National Internal Revenue Code; or (b) A franchise tax of two per cent (2% ) of the gross revenues derived by the grantee from all sources, without distinction as lo transport or nontransport operations; provided, lhal with respect lo international ajr-transporl service, only the gross passenger, mill !, and freight revenues from its outgoing fli ghts shall be subject to this tax. The tax paid by the grantee under either of the above alternatives shall be in lieu of all other taxes, duties, royalties, registration, license, and other fees and charges of any kind, nature, or description, imposed, levied, established, assessed, or collected by any municipal, city, provincial, or national authority or government agency, now or in the future , including but not limited to the following: XXX XXX XXX 2. All taxes , including compensating taxes, duties, charges, royalties, or fees due on all importations by the grantee of ajrcraft, engines, equipment, machinery, spare parts, accessories, commissary and catering supplies, aviation gas, fuel , and oil, whether refined or in crude form and other articles, supplies, or materials; provided, that such articles or supplies or materials are imported for the use of the grantee in its transport and transport operations and other activities incidental thereto and are not locally available in reasonable quantity, quality, or price ;" (Emphasis supplied) In other words, petitioner may be exempted from paymg all taxes, including compensating taxes, duties, charges, royalties, or fees due on all importations by petitioner of commissary and catering /-

DECISION CTA CASE NO . 7935 supplies and other articles, supplies, or materials upon payment under either of the above-mentioned alternatives, provided that: 1. Such articles, supplies or materials are imported for the use of the grantee in ils transport and non-transport operations and other activities incidental lherelo; and 2. They are nol locally available m reasonable quantity, quality or price. Let il be noted that Section 22 of RA 9337, which took effect on July 1, 2005, abolished lhe franchise lax provided under petitioner's charter and subjected petitioner to corporate income tax and VAT. Nevertheless, lhe same Section provides that petitioner shall otherwise remain exempt from any taxes, duties, royalties, registration, license, and other fees and charges, as may be provided by their respective franchise agreement. Section 22 of RA 9337 reads: "SEC. 22. Franchises of Domestic Airlines. - The provisions of P.O. No. 1590 on the franchise tax of Philippine Airlines, Inc., R.A. No. 7151 on lhe franchise lax of Cebu Air, Inc., R.A. No. 7583 on the franchise tax of Aboitiz Air Transport Corporation, R.A. No. 7909 on the franchise tax of Pacific Airways Corporation, R.A. No. 8339 on the franchise tax of Air Philippines, or any other franchise agreement or law pertaining to a domestic airline lo the contrary notwithstanding: (A) The franchise lax is abolished; /r (B) The franchisee shall be liable to the corporate income lax;

DECISION CTA CASE NO. 7935 (C) The franchis ee shall register for value- added tax under Section 236, and to account under Title IV of the National Inte rnal Revenu e Code of 1997, as am e nded , for value-added lax on its saJe of goods, property or s e rvices and its lease of property; and (D) Th e franchisee shall otherwise re m a m exe mpt from a ny taxes, duti es , royalti es, registration , lice nse, and other fees and charges, a s may be provided by their respective fr a nchise agreement." Conseque ntly, petitioner is only left with one option, which is to pay its basic corporate income tax, the payment of which shall be in li e u of all taxes with the exce ption of VAT, subject to certain conditions as may be provided under petitioner's charter. To substantiate its claim, pe tition e r prese nted its Annual Incom e Tax Re turn 35 for th e fis cal year e nd ed Ma rc h 31, 2008, showing lh a l il filed its Incom e Tax Return for fiscal year 2008. Petitioner likew ise prese nted its Certificate of VAT Rcgislralio n 36 and its VAT Return for the fourth quarter of fis cal year e nd ed Ma rc h 31, 2 008 lo prove that il accounted for the value-a dd ed lax on its sales of goods, prope rty or s e rvices and its lease of prope rty for the fiscal year 2 008. 37 As regards its payme nt of the exc tsc lax on imported a rtic les claimed for refund, petitioner submitted co pies of Informa l Import J- Dec laration Entries, Offici a l Rece ipts issued by th e Bureau of 35 Exhibits "000", " 000 - 1", "000 -2", "000 - 3", and "000-4" . 36 Exhibit "PPP". 37 Exhibi t "RRR".

DECISION CTA CASE NO. 7935 Page 23 of 3 0 Customs , and the Authority lo Re lease Imported Goods, th e co ntents of which a re detailed as follows : Import Articles Date of ATRIG Amount Total Amount Official Date of Entry Arrival No. Due Paid Receipt Payment No. No. June 25, 2007 3722 Mild March 29 , 744 53 p 500 ,000.00 P1 ,909,751.20 14094 5962 (Exh . S) 3 90 ,096. 00 (Exh . R) J uly 11 , 3 7 2 tl Seven 2006 2 50 ,000 .00 2007 - 74 482 141165787 Cigarette (Exh . J) (Exh . T) (Exh . FF) Ju ly 20 , 3990 2007 Chivas ---- 74 82 8 141733426 Marc h 13 (Exh . U) (Exh . PP) Real 2006 Whisky (Exh . K) West King April 14 , Size 2 006 (Exh . C i gare t te s L) D avidoff Nove mber 744 5 1 175,000 .00 Lights 30 ,200 5 (Exh . V) 14 3 0 9 (Exh . M 14 3 13 Carnus D ecember 744t1 5 20 ,563.20 15,200 5 (Exh . W) xo (Exh . N) Sup er i eu r 143 14 Pip er D ece m b e r 7454tl 393, 12 0 .00 H ei d s i ec k 10 ,200 5 (Exh . X) (Exh. (0) 14 31 7 Vin De D ecember 7tlt120 180 ,97 2. 00 Table 15 , 2005 (Exh . Y) 3729 - Balnc (Exh . P) 3730 Vin De - -- -- ----- 750 ,000 .00 2,259,157.44 Table April 5, 74829 860 ,267.52 1,899,083.84 Rouge 648,889 .92 2006 (Exh . (Exh . Salem M King B B) GG) Cigarette M arch 27, 7491 5 Carlos I 2006 (Exh . (Exh . HH) CC) 3732 Roy al March 3 1, 74860 Salute 2006 (Exh . (Exh . II ) Whi sky, p 7) Ball anti n e Scotch Whiskey, Carlos I Brandy and Martel VSOP ---- Cogn ac 1--- -- 74874 500 ,000.00 Mild April 19, (Exh . 7t1 5,355 .52 t10 56 QQ) 2006 (Exh. Seven LL) Li ghts Cigarettes - - - - -f--::� Octob er 2 9 , Exh . RR 2005 143 0 2 Remy (Exh. MM) Martin XO Rem y Martin VSOP Pip er H e i d s i ec k 14 30 3 J & B rare October 22, 74589 - - 653,728 .32 2005 (Exh. (Exh . JW Black Label NN) SS)

DECISION CTA CASE NO. 7935 14305 Jack November 741J55 1,069 ,951 .68 4,821,680.24 14182044 5 July 30, Daniels, 19,2005 (Exh (Exh . 888) 2007 14 3 0 6 Regal (Exh. W) CCC) 14 3 10 Whisky , 653,728.32 14307 cutty November 74546 610,500.24 sark, 28,2 00 5 (Exh 2, 187,500.00 10346 royal (Exh . WW) ODD) salute, 300,000 .00 fin landia November 74547 vodka 2,2 00 5 (Exh . (Exh . XX) EEE) J&8 74586 Rare; JW Novemb er (Exh Black 11 ,200 5 FFF) Label (Exh . YY) 58281 Chi vas September (Exh Regal 20 , 2005 GGG) Whisky (Exh . ZZ) Winston Red King Size; Winston Lights King Size ; Mild Seven Davidoff Classic Lights An examination of the records would show that the amount of th e exc ise lax li a bi lity subject of th e insta nt claim for re fund as stated in the lette rs submitted lo Silve ria Salazar, Chie f of the Collec tion Division in the BOC NAIA Customhouse38 a nd in th e above- m ention ed Authority lo Re lease Imported Goods actu a lly co rrespo nd to th e a mount of taxes which petitione r paid for the release of the s ubj ect imported a rticles, a s evidenced by th e a bove-staled Official Rece ipts issued by th e Burea u of Customs. Thus, petition e r was ab le lo substantiate its paym ent of the lola! amount of excise tax subject of the insta nt c la im for refund. Anent the question of whether or not the subject imported a rti c les were imported for th e use of petition e r in its transport a nd non -tra nsport operations a nd other activiti es inc id e nta l thereto, a/.-- 38 Exhibi ts "Q", "EE", "0 0" , "AJ\1\", and "AAA - 1".

D E CISION CTA CASE NO. 7935 pe rusa l of th e Authority to Re leas e Imported Goods issu ed by th e CIR would show t hat th e subject imported a rticl e s will be use d exclu s ive ly for inte rn a tional in - night consumption. Now , a s to th e require m e nt th a t th e subj ec t imported a r t ic les a rc not locally a va il a ble in reason a bl e qu a ntity, qu a lity or pn ce, re spond e nt CIR a rgu ed th a t pe tition e r fa il ed to prove th e s a m e . Accordin g to re sponde nt CIR, no ind e pe nd e n t a nd c redibl e evid e n ce wa s pre s e nted to prove this m a tte r . ll is highly s e lf-s e rvin g fo r pe ti tioner's very own e mploy ee to certify th a t the imported produ cts arc not locally a vailabl e in rea son a bl e qu a ntity, qu a lity a nd pri ce. Furthe rmore, th e study on prices is not compre h e nsi ve in n a ture . For its part, petitioner pre s e nted th e te stimony of Mr. Vi ctor Sa ntos, th e Assista nt Vice Preside nt in c h a rge of th e Ca te rin g a nd In - ni g ht Sub-d e partm e nt of petition e r PAL. In his Judi c ia l Affid av it39 , Mr. S a ntos stated that PAL imported a lcoholi c produ c ts because th e importa tion of said products is c h eape r tha n buy in g t h e m locally, a nd in t h e cas e of ci gare tte s , the re a re no local supplie rs or d eale r s big e nou g h to supply th e va nous fore ig n bra nds of c igare ttes PAL is importin g , a nd if e ver th e re a re, th e s e llin g pn ces of those local d eale rs would d e finite ly be hig h e r th a n PAL's cost of impo r t ing th e c iga re ttes . This is furth e r supported by a ta bul ation m a d e by Mr. Sa ntos compa ring the cost of importing th e subj ec t a rti c le s a nd t h e~ 39 Exhibit "WWW".

DI ~C ISION CT/\ CAS E NO . 7935 Page 26 of 3 0 cost of purch a sing th e m locally4 0, t h e invoi ces issu ed to PAL for its purc h a s e of th e subj ect a rlic le s4 1, th e Pri ce List for 2 005 of Duty Free Philippin cs 42 a nd the 2 005 43 and 2 006 44 Pri ce List issued by the Philippin e Win e Me rc h a nts correspondin g lo th e s a m e a r tic les subj ect o f this c la im for re fund. Upon exa min a tion of th e ite ms o n th e ta bul a ti o n m a d e by Mr. Santos, il can be noticed tha t the 2005 Price List of Duty Free Philippine s 4 5 fa il ed to provid e th e pri ces for th e a r tic le s Mild Seve n Cigare tte, We st Kin g Size Cigarette s , Dav idoff Lig hts, Pipe r He id s iec k , Sa le m M Kin g Ciga rc llc, Winston Red Kin g S ize, Winston Li g hts Kin g Size, Dav idoff Cla ssi c Li g h ts, Ca rlo s I, Rc m y Ma rlin XO , Re m y Ma r ti n VSOP, ,J&B Ra re, ,JW Blac k La be l a nd Cully S a rk. Neve r t hele s s, th e local pri ce s for Ca r los I, Rc m y Ma rtin XO , Re my Ma r t in VSOP, J&B l~ a re, JW Blac k La be l, J ac k Da ni e ls a nd Cully S a rk a re re neclcd m th e 2 0051 6 a nd 2 006 47 Phi lippin e Wine Me rc h a nts ' price list. As to th e importa tion of th e foregoin g bra nd s of c iga re tte s , Mr. Sa ntos a dmillcd th a t th e cost of loca lly buy in g th e sa m e produ ct fo r th e s a m e year cannot be e sta blish ed sin ce n o pri ce th e reo f is a va il a ble for Duly Free Philippin es in 2 005 a s we ll as in th e Philippine Win e Me rc h a nts Pri ce Lists, w hi c h co nta in o nly th e pri ces fo r w in es. Mr./- 40 Sx hibi t "WWW -2". 41 Ex h ibi ts "J -2", "L-2", " M-2", "N-2", "P-2", "BB-2", "LL-2", "NN -2", "WW -2", "YY-2" and "ZZ-2". 4 2 Exh ib it ''TlT'. 43 Exh ibit "UUU". 44 Exhibit "VW". 45 Exhibi t '"lTl"'. 46 l:.x hibi t "UUU" . 47 Exhibi t "VW".

DECISION CTA CASE NO . 7935 Santos likewise added that if ever there a re loca l suppliers of the c igarettes involved, its sellin g price would definite ly be hig h er th an the importation cost of PAL of s a id cigarettes; which is exe mpt from duti es a nd taxes und er its fra nchise in asm uch as loca l su ppli ers will have to pay excise taxes and customs duties.48 Howeve r, other than th e testimony of th e said witness, there is nothing in the evidence presented by peti tione r which would support a co nclusion that th e subj ect cigarettes a re not locally avail a bl e in reasonable quantity, qu a lity or price. Also, the Court observes that petition e r fa il ed to present the sales invoices or offic ial rece ipts for its purc h ase or importation o f the followin g articles from which th e local prices can be co mpa red: Import - Entry No. Articles 3724 Chivas Real Whisky 14314 Piper Heidsieck ------ - ----- Carlos I 3730 Royal Salute Whisky , 3732 Balla ntine Scotch Whiskey, Carlos I Brandy and Marte l VSOP Cognac - Remy Martin XO 143 0 2 r~emy Marlin VSOP Piper Heidsieck 1----- - J ack Daniels, Regal Whisky, Cully Sark, Royal Salute, Finlandia Vodka 14305 -- Chivas Regal Whisky 14310 In this regard, it must be noted that the Court m ay no t cons id e r the comparison made by petitioner between the Unit Costs of the j a rticl es a s per In formal Import Decla ration Entry No. a nd th e local 48 Exhibit "WWW" .

DECI SION CTA CASE NO. 7935 Pa ge 2 8 of 30 price s o f th e s a m e a r t ic le s consid e ring that, a s pe r th e te s t imony o f Mr. S a ntos, th e said Un it Costs a rc m e re ly th e va lu a tions give n by th e Bureau of Customs from which th ey a sse ssed a nd collec ted th e excise lax du e 49 a nd thus, a re not th e ac tu a l cost o r pri ce of t h e subj ect imported a rticles. Accordin gly , o u l of lh e importation s subjec t of lh e in stan t Pe tition for Review, o nly th e pay m e nt of excise lax on th e follo w in g importa tions , wh ic h wa s sufficie ntly supported by invoi ce s , Bureau o f Customs Offi c ia l Rece ipts , Authori ty lo Re leas e Imported Good s a nd oth e r docum e nta ry evid e nce, m ay be refund ed : Import Articles Date of ATRIG Amount Due Official Date of E ntry Arrival No. Payment P20,563.20 Receipt No . 74 445 No. June 25, 2007 143 13 Camus Decemb er (Exh . W) 140945962 xo 15,200 5 744 20 (Ex h . R) Superi eur (Exh . N) (Exh . Y) 143 17 Yin De Decem ber 74589 180 ,972. 00 Table B aln c 15, 2005 (Exh . SS) (Exh . P) 74546 Yin De (Exh Table DOD) ~3 03 Rou ge Octob er TOTAL 653,728.32 141 733-42-6- Ju ly 20, (Exh . PP) 2007 J&B 22,2 00 5 rare JW B l ack (Exh . NN) La b el - -- 653,728.32 141820445 Ju ly 30, 2007 14306 -- J & B November (Exh . B BB) Rare; JW 28 , 2005 B lac k (Exh . WW) Label Pl ,508 ,991.84 It is lruc th a t a c laim a nt h a s th e burde n of proof to e sta bli s h th e fac tu a l ba s is of hi s o r h e r cl a im for ta x c re dit o r re fund. 50 Tax refunds arc in the nature of lax exe mptions. As such, they a re regard ed a s d e rogatio n of sove re ign a u t hority a nd lo be con s tru ed /,- 49 Exhi bi t "WWW" 5� Citibank, N.A. us . Court of Appeals and the Comm issione r of In te rnal Reve nue , G.R. No. 107434, Oc to ber 10, 1997.

DECISION CTA CASE NO. 7935 strictissimi juris against the person or entity claiming the refund. 5 1 However, petitioner was able to discharge such burden of proof as regards the duly substantiated portion of its excise tax paid on the subject importations. Hence, the instant claim for tax refund of petitioner's erroneous ly paid excise tax should be granted but only in the amount of Pl,508,991.84. WHEREFORE, premises considered, the instant Petition for Review is hereby PARTIALLY GRANTED. Accordingly, respondents are ORDERED to REFUND in favor of petitioner the amount of ONE MILLION FIVE HUNDRED EIGHT THOUSAND NINE HUNDRED NINETY-ONE PESOS AND 84/100 (P1,508,991.84), representing petitioner's erroneously paid excise tax on June 25, 2007, July 20, 2007, and July 30, 2007. SO ORDERED. #/.-v;:L~- AMELIA R. COTANGCO- MANALASTAS Associate Justice WE CONCUR: (Retired) OLGA PALANCA-ENRIQUEZ Associate Justice 5 1 Commissioner of Internal Revenue us. S .C. Johnson & Son, Inc., G.R. No. 127105, June 25, 1999.

DECISION CTA CASE NO . 79 35 Page 3 0 of 30 ATTESTATION I attest that the conclusions in the above Decision were reached m consultation before the case was assigned to the write r of the opinion of lhe Court's Division . stice CERTIFICATION Pursuant to Section 13, Article VIII of th e Constitu t ion a nd th e Division Chairpe rson's Atte sta tion , il is h e re by ce rtified tha t the conclusions in th e a bove Decision we re reach ed in consulta tion before th e case wa s a ssigned to the wriler of lhe opinion of lhe Court. ~~;4 C . ~~-;,L;.r~� JUANITO C. CASTANEDA:, JR. Ac tin g Pre siding Justice