Toledo Power Co. v. Commissioner of Internal Revenue

SECOND DIVISION [C.T.A. CASE NOS. 8450, 8512, 8547 & 8596. June 9, 2017.] TOLEDO POWER COMPANY , petitioner , vs. COMMISSIONER OF INTERNAL REVENUE , respondent . DECISION CASANOVA , J p : These consolidated Petitions for Review 1 pray for the refund of the amount of P6,126,105.97, P15,461,554.31, P10,540,887.95, and P49,064,418.84, allegedly representing unutilized value-added tax (VAT) input taxes for the 1st, 2nd, 3rd, and 4th quarters of taxable year (TY) 2010, respectively. HTcADC Petitioner is a partnership between GBH Cebu Ltd. Duration Co. and ARB Power Ventures, Inc., 2 which is duly organized and existing under Philippine laws with principal office located at Sangi, Toledo City, Cebu. 3 It is a registered taxpayer under Certificate of Registration No. 2RC0000074406 dated January 1, 1997 with Taxpayer's Identification Number (TIN) 003-883-626-000 4 and, likewise, registered in the Energy Regulatory Commission as an entity with authority to operate its generation facilities. 5 It is represented by its counsel Du-Baladad & Associates with office address at the 20th Floor, Chatham House Building, Rufino corner Valero Streets, Salcedo Village, Makati City. 6 Respondent is the duly appointed Commissioner of Internal Revenue who has the duty and power, among others, to act on and approve claims of refund as provided by law, with business office at Bureau of Internal Revenue (BIR) National Office Building, Diliman, Quezon City. 7 On April 24, 2002, ARB Power Ventures, Inc. and CMS Generation Cebu Limited Duration Company amended their Agreement of General Partnership for the purpose of, among others, acquiring, owning, rehabilitating, maintaining and operating the Sangi coal-fired and oil-fired electrical generation facility located in Sangi, Toledo City, Cebu, Philippines and the Carmen diesel fueled electric generation facility located in Barangay Don Andres Soriano, Toledo City, Cebu, Philippines. 8 Petitioner's 1st, 2nd, 3rd, and 4th Quarterly VAT Returns for TY 2010 were filed on April 23, 2010, July 23, 2010, October 26, 2010, and January 25, 2011, respectively. 9 Then, petitioner amended its 1st and 2nd Quarterly VAT Returns on July 23, 2010, while its 3rd and 4th Quarterly VAT Returns were amended on March 15, 2011. 10 Petitioner filed its administrative claims for refund of its unutilized input VAT on November 29, 2011, 11 March 5, 2012, 12 May 30, 2012, 13 and August 23, 2012 14 for the 1st, 2nd, 3rd, and 4th quarters of TY 2010, respectively. Due to the inaction of respondent, petitioner filed these Petitions for Review docketed as CTA Case Nos. 8450, 8512, 8547, and 8596 on March 30, 2012, July 6, 2012, September 28, 2012, and December 28, 2012, respectively. In the Answer 15 filed on May 11, 2012 for CTA Case No. 8450, respondent interposed the following special and affirmative defenses: "SPECIAL AND AFFIRMATIVE DEFENSES 7. She reiterates and re-pleads the preceding paragraphs of this Answer as part of her Special and Affirmative Defenses. 8. To support its claim, it is imperative for petitioner to prove the following, viz. : a. The registration requirements of a value-added taxpayer in compliance with Section 6 (a) and (b) of Revenue Regulations No. 6-97 in relation to Section 4.107-1 (a) of Revenue Regulations No. 7-95, and Section 236 of the Tax Code, as amended; b. The invoicing and accounting requirements for VAT-registered persons, as well as the filing and payment of VAT in compliance with the provisions of Sections 113 and 114 of the Tax Code, as amended; c. Proof of compliance with the prescribed checklist of requirements to be submitted involving claims for VAT refund pursuant to Revenue Memorandum Order No. 53-98, otherwise there would be no sufficient compliance with the filing of an administrative claim for refund which is a condition sine qua non prior to the filing of a judicial claim in accordance with Section 112 of the Tax Code, as amended. This requires the submission of complete documents in support of the application filed with the Bureau of Internal Revenue before the 120-day audit period shall apply, and before the taxpayer could avail of the judicial remedies as provided for in the law . Hence, petitioner's failure to submit proof of compliance with the above-stated requirements warrants immediate dismissal of petitioner's petition for review; d. That the input taxes of P6,126,105.97 allegedly paid by petitioner on its purchases of goods and services for the 1st quarter of 2010 were attributable to its zero-rated sales and such have not been applied against any output tax and were not carried over to the succeeding taxable quarter or quarters; e. That petitioner's administrative and judicial claims for tax credit or refund of the unutilized input tax (VAT) were filed within the periods provided in Section 112 (A) and (D) of the Tax Code, as amended ; f. That petitioner's domestic purchases of goods and services were made in the course of its trade or business, properly supported by VAT invoices and/or official receipts and other documents, such as subsidiary purchase Journal showing that it actually paid VAT in accordance with Sections 110 (A) (2) and 113 of the Tax Code, as amended, and pursuant to Section 4.104-5 (a) and (b) of Revenue Regulations No. 7-95 (Re: Substantiation of Claims for Input Tax Credits); g. The requirements as enumerated under Section 4.104-5 of Revenue Regulations No. 7-95. (Re: Substantiation of Claims for Input Tax Credits). 9. Petitioner must prove that the aggregate amount of P6,126,105.97 allegedly representing excess and unutilized input VAT for the 1st quarter of 2010 is properly documented. 10. As petitioner states in its petition before this Honorable Court, the subject of its claim for refund are allegedly excess and unutilized input VAT on its purchases of goods and services covering the 1st quarter of 2010. aScITE 11. The instant petition involving petitioner's claim for refund in the amount of Six Million, One Hundred Twenty Six Thousand, One Hundred Five and 97/100 (P6,126,105.97) allegedly paid and incurred for the 1st quarter of taxable year 2010 is not warranted for lack of jurisdiction as petitioner failed to exhaust all administrative remedies before elevating this case to the Honorable Court. 12. Unmistakably, Section 1 (j) of Rule 16 of the 1999 Rules of Civil Procedure provides that: 'MOTION TO DISMISS Section 1. Grounds. Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the following grounds: xxx xxx xxx (j) That a condition precedent for filing the claim has not be complied with.' 13. Corollary thereto, Section 112 (D) [now Section 112(c) of the Tax Code of 1997] provides as follows, to wit : ' SEC. 112. Refunds or Tax Credits of Input Tax. xxx xxx xxx (D) Period within Which Refund or Tax Credit of Input Taxes Shall be Made. In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one-hundred-twenty-day period, appeal the decision or the unacted claim with the Court of Tax Appeals .' (Emphasis supplied) Pursuant to the aforequoted provision of law, the Commissioner of Internal Revenue ('CIR,' for brevity ) has 120 days from the submission of the complete supporting documents to decide the claim for refund. It logically follows that a taxpayer must first submit the complete supporting documents before the 120-day period should commence. The CIR cannot decide the claim for refund without the complete supporting documents. 14. The implementing rule for these complete documents required by law is RMO No. 53-98. Annex B-1 of said RMO lists all the required documents as follows: VALUE-ADDED TAX (For audit involving Claim for Refund/TCC) A.) Requirements from Taxpayer I. Requirements mention in Annex B II. Additional General Requirements 1) 3 copies of 'Application for VAT Credit/Refund.' 2) Summary List of Local Purchases specifying the following: xxx xxx xxx 3) Photocopies of VAT purchase invoices for purchase of goods and official receipts for purchase of services. (The invoices/official receipts must be arranged according to the summary list) 4) Summary of importations made during the period with the following details: xxx xxx xxx 5) Photocopies of invoices, import entry documents, official receipts or confirmation receipts evidencing payment of VAT. (Segregate documents paid by cash from those paid by tax debit memo) 6) VAT Returns filed for the quarter showing that the amount applied for refund/TCC has been reflected as a deduction from the total available input tax, as well as VAT Return for the succeeding quarter. 7) Certification of taxpayer showing the amount of Zero-Rated Sales, Taxable Sales and Exempt Sales. 8) A statement showing the amount and description of the sale of goods and services, name of persons or entities (except in case of exports) to whom the goods or services were sold and date of the transaction, where the applicant's zero-rated transactions are regulated by certain government agency. 9) Articles of Incorporation for first time filers 10) Sales Contract/Agreement 11) BOI Certificate of Registration 12) BIR Certificate of Registration 13) Certification from BOI, DOF, BOC, EPZA, etc., that subject taxpayer has not filed similar claim for refund covering the same period. 14) Sworn statement that ending inventory as of the close of the period covered by the Claim has been used directly or indirectly in the products subsequently exported as supported by export documents, if the applicant is 100% exporter. 15) Documents of liquidation evidencing the actual utilization of the raw materials in the manufacture of goods at least 70% of which has been actually exported, if the applicant is an indirect exporter. 16) Copy of the ITR and Certified Financial Statements, if applicable. 17) Beginning and ending inventory of raw materials, work-in-process, finished goods, supplies and materials. Additional Specific Requirements 1) For Zero-Rated Sales of Services (contractors, mining, etc.) a. Authenticated copy/ies of the contract/s showing the person/s for whom the services were rendered, amount of consideration, description of the services and documents evidencing actual payments. b. Photocopies of official receipts and billings together with a summary of the date of billing, name of principal, official receipt number, date of receipt, amount in foreign currency and the corresponding value thereof, date of remittance, name of bank, bank credit memo number and amount remitted in pesos. c. Bank credit memoranda and certificate from the BSP with information similar to 1-c (export sales). As stated above, the first documentary requirement is that provided in Annex B of the same RMO. Annex B provides for more requirements as follows: VALUE-ADDED TAX A) Requirements from Taxpayers 1) Proof of claimed tax credits HEITAD 2) Proof of Tax Compliance Certificates applied 3) Xerox copy of used Tax Credit Certificate (TCC) with annotation of issued TDM at the back, if applicable 4) Proof of payment of deficiency tax, if any a) current year/period b) previous year/period 5) Certification of the appropriate government agency as to taxpayer's entitlement to tax incentives, if applicable 6) Xerox copies of the Official Receipts evidencing VAT payment on imported purchases, if applicable 7) Proof of exemption under special law, if applicable 8) Certification of the appropriate regulatory agency as to the exempt or zero-rated sales of the taxpayer under its regulatory supervision, if applicable 9) Certificate of Registration issued by the appropriate regulatory agency, together with the conditions attached to such registration, if applicable 10) Proof of 'Approval for Effective Zero-Rating of Sales,' if applicable 11) Sample invoice/s for 'Export/Exempt Sales,' if applicable 12) Proof that the acceptable foreign currency exchange proceeds on export sales/foreign currency denominated sales had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP), if applicable. Indubitably, the law requires the submission of complete documents in support of the application filed with the Bureau of Internal Revenue before the 120-day audit period shall apply, and before the taxpayer could avail of judicial remedies as provided for in the law. Far from complying with the checklist of requirements, evidence on record shows that respondent merely submitted sixteen (16) classes of documents in its administrative claim for refund for the quarter. This fact is clearly stated in petitioner's alleged claim for refund dated November 25, 2011. For the 1st quarter of 2010, these documents are enumerated therein as follows: 1. Application for Tax Refund/Credit; 2. Authorization Letter issued by the Company; 3. TPC's Certification showing amount of zero-rated sales, taxable sales and exempt sales; 4. ERC Certificate of Compliance; 5. BIR Certificate of Registration; 6. SEC Certificate of Registration of TPC; 7. EPPA between CEBECO III and TPC; 8. MOA between Carmen Cooper and TPC; 9. MOA between Balamban Enerzone Corporation and TPC; 10. Summary importations made during the period; 11. Summary list of purchases/Input tax schedule; 12. Invoices, official receipts, import entry documents and other documents evidencing payment of input VAT or input taxes incurred on local purchases and importations; 13. Summary of sales; 14. Invoices, receipts supporting sales/receipts; 15. Duly filed quarterly VAT returns (BIR Form No. 2550-Q) for 2010 1st quarter; and 16. DOF Certification of Non-filing of Similar/Previous and/or Outstanding Claim for the 1st quarter of 2010. 15. A careful examination of the BIR records shows that petitioner failed to prove that it has submitted complete documents to substantiate its administrative claim for refund and to reckon the commencement of the 120-day period for the CIR. This is a requirement established by law and jurisprudence. Ergo, respondent humbly submits that failure on the part of petitioner to submit the required complete supporting documents would render the instant petition with this Honorable Court to have been prematurely filed. 16. This is not a claim for refund of erroneously or illegally collected taxes where petitioner may choose the evidence it wishes to submit to prove its case. This is merely a claim for excess input taxes where the prescribed documentation is needed by the BIR. 17. Petitioner's alleged claim for refund is subject to administrative routinary investigation/examination by the Bureau of Internal Revenue. A claim for refund is not ipso facto granted because respondent CIR still has to investigate and ascertain the validity of the claim. 18. Respondent respectfully avers that before judicial inquiry into the issue of whether taxpayers, in general, are entitled to a refund/tax credit under substantive law may be considered, they have an initial burden to discharge. They must prove that they complied with all the administrative requirements continuing up to judicial review. In other words, before trial de novo proceeds and disposes of the issue of refund entitlement under substantive law , it must first be proved that there was procedural compliance in pursuing the administrative claim leading to the appellate proceedings. As stated by the Honorable Supreme Court: 'Petitioner's contention that non-compliance with Revenue Regulations 3-88 could not have adversely affected its case in the CTA indicates a failure on its part to appreciate the nature of the proceedings in that court. First, a judicial claim for refund or tax credit in the CTA is by no means an original action but rather an appeal by way of petition for review of a previous, unsuccessful administrative claim. Therefore, as in every appeal or petition for review, a petitioner has to convince the appellate court that the quasi-judicial agency a quo did not have any reason to deny its claims. In this case, it was necessary for petitioner to show the CTA not only that it was entitled under substantive law to the grant of its claims but also that it satisfied all the documentary and evidentiary requirements for an administrative claim for refund or tax credit. Second, cases filed in the CTA are litigated de novo . Thus, a respondent should prove every minute aspect of its case by presenting, formally offering and submitting its evidence to the CTA. Since it is crucial for a petitioner in a judicial claim for refund or tax credit to show that its administrative claim should have been granted in the first place, part of the evidence to be submitted to the CTA must necessarily include whatever is required for the successful prosecution of an administrative claim . ' (Emphasis and underscoring supplied) ATICcS 19. The doctrine of exhaustion of administrative remedies ensures an orderly procedure which favors a preliminary sifting process, particularly with respect to matters peculiarly within the competence of the administrative agency. After this sifting process comes the availability of judicial review of administrative decisions such as that exercised by the Honorable Court herein. Judicial review of administrative decisions entails the Court to examine the method in which the decision was arrived at, and finding no error, lets the administrative decision stand. This is precisely because, as previously stated, these are matters peculiarly within the competence of the administrative agency. 20. Well-settled is the rule that exhaustion of available administrative remedies is a condition sine qua non before taking a judicial action. The Honorable Supreme Court, in a long line of cases, has consistently held that if a remedy within the administrative machinery can still be resorted to by giving the administrative officer every opportunity to decide on a matter that comes within his jurisdiction, then such remedy must be exhausted first before the court's power of judicial review can be sought (Province of Zamboanga del Norte vs. Court of Appeals, 342 SCRA 549, 557 [2000]; Zabat vs. Court of Appeals, 338 SCRA 551, 560 [2000]; Diamonon vs. Department of Labor and Employment, 327 SCRA 283, 291 [2000]; Social Security System Employees Association vs. Bathan-Velasco, 313 SCRA 250, 252 [1999]; Paat vs. Court of Appeals, 266 SCRA 167, 175 [1997]) . 21. Moreso, the Honorable Supreme Court had the occasion to rule that where a remedy is available within the administrative machinery, this should be resorted to before resort can be made to courts, not only to give the administrative agency the opportunity to decide the matter by itself correctly, but also to prevent unnecessary and premature resort to courts. Thus, the party with an administrative remedy must not merely initiate the prescribed administrative procedure to obtain relief but also pursue it to its appropriate conclusion before seeking judicial intervention in order to give the administrative agency an opportunity to decide the matter itself correctly and prevent unnecessary and premature resort to the court. 22. The doctrine of exhaustion of administrative remedies has practical and legal reasons. Resort to administrative remedies entails lesser expenses and provides for speedier disposition of controversies. Thus, for reasons of comity and convenience, courts will shy away from a dispute until the system of administrative redress has been completed and complied with so as to give the administrative agency every opportunity to correct its error and to dispose of the case. The underlying principle of the rule rests on the presumption that the administrative agency, if afforded a complete chance to pass upon the matter, will decide the same correctly (Gorospe vs. Vinzons-Chato, G.R. No. 132228, January 21, 2003) . 23. Respondent respectfully submits that the 120-day period provided for by law within which the CIR has to act on petitioner's claim for refund has not yet commenced considering petitioner's failure to comply with the duly mandated legal requirements in such claims for refund/tax credit (i.e., submission of complete supporting documents) . While it is true that petitioner filed an administrative claim for refund, the same is considered merely pro forma as it failed to submit documentary evidence to prove its entitlement thereto. Petitioner here failed to substantiate its administrative claim for refund. 24. Had petitioner submitted all relevant documents to substantiate its claim for refund or tax credit, respondent would have the opportunity to determine the veracity of its claim and might refund or issue a tax credit certificate for the claimed amount. Such failure of petitioner to submit relevant documents deprived respondent of the opportunity and time to study petitioner's claim for refund and to fully exercise its function. It must be remembered, that in the case of Jariol vs. Commission on Elections , the Supreme Court reasoned that a party must not merely initiate the prescribed administrative procedure to obtain relief, the party concerned must pursue this relief until the appropriate conclusion takes place before seeking judicial intervention in order to give the administrative an opportunity to decide the matter by itself correctly and prevent unnecessary and premature resort to the court. 25. It is well settled rule in tax laws, that the taxpayer who feels aggrieved by the actions taken by tax authorities may not seek redress in the courts of justice without first exhausting available administrative remedies, except for certain well-recognized exceptions. It is the policy of the law and good practice to discourage court litigations and encourage resort to administrative action whenever the latter is feasible, adequate and speedy. Another thing, the respect and consideration due to each branch of the government demand that the judicial department abstain, whenever possible from interfering in the acts of the other departments except when the latter transcend their respective shares of action and suitable remedies cannot be obtained by them. (Bagatsing vs. Ramirez, 74 SCRA 306) 26. Equally noteworthy is the fact that the Highest Tribunal in the case of Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue, G.R. No. 145526 promulgated on March 26, 2007 held: 'Petitioner's contention that non-compliance with Revenue Regulations 3-88 could not have adversely affected its case in the CTA indicates a failure on its part to appreciate the nature of the proceeding in that court. First a judicial claim for refund or tax credit in the CTA is by no means an original action but rather an appeal by way of petition for review of a previous, unsuccessful administrative claim. Therefore, as in every appeal or petition for review, a petitioner has to convince the appellate court that quasi-judicial agency a quo did not have reason to deny its claim. In this case, it is necessary for petitioner to show the CTA not only that it was entitled under substantive law to grant of its claim but also that it satisfied all the documentary evidence and evidentiary_ requirements for administrative claim for refund or tax credits . xxx' (Emphasis and Underscoring provided) Thus, as clearly stated by the above jurisprudence, the necessity for petitioner to submit all relevant documents to substantiate its administrative claim for refund is imperative. The filing of the petition for review to this Honorable Court must be due to the denial of its claim or inaction which is tantamount to a denial of the said action. Absent these circumstances, the judicial claim merely becomes an attempt by the taxpayer to circumvent the role and duties of the Commissioner in evaluating taxpayer's claim for refund. TIADCc 27. Failure of petitioner to exhaust all administrative remedies is fatal to its claim considering that such non-exhaustion is not merely for purposes of formality but is jurisdictional in nature. 28. Prescinding from and anent the foregoing considerations, petitioner's failure to exhaust all available administrative remedies which led to the premature filing of the instant petition divests the Honorable Court jurisdiction over the instant petition. 29. Exemptions from taxation are highly disfavored in law and he who claims exemption must be able to justify his claim by the clearest grant of organic or statutory law. An exemption from the common burden cannot be permitted to exist upon vague implications (Asiatic Petroleum Co. vs. Llanes, 49 Phil. 466 cited in Collector of Internal Revenue v. Manila Jockey Club, Inc., 98 Phil. 670) . 30. In an action for refund, the burden of proof is on the taxpayer to establish its right to refund, and failure to sustain the burden is fatal to the claim for refund. Hence, a taxpayer is charged with the heavy burden of proving that he has complied with and satisfied all the statutory and administrative requirements to be entitled to the tax refund. Failure to comply therewith warrants a dismissal of the taxpayer's claim for refund. Respondent humbly submits that petitioner failed to establish its right to refund. 31. It can never be emphasized enough that in this jurisdiction tax refunds/credits are in the nature of tax exemptions, hence, laws relating to them call for a strict application against the claimant. As held by the Honorable Supreme Court: 'Tax refunds are in the nature of tax exemptions, and are to be construed strictissimi juris against the entity claiming the same. Thus, the burden of proof rests upon the taxpayer to establish by sufficient and competent evidence, its entitlement to a claim for refund.' 32. Taxes collected are presumed to be in accordance with laws and regulations. 33. Claims for refund are construed strictly against the claimant for the same partake of the nature of exemption from taxation (Commissioner of Internal Revenue vs. Ledesma, 31 SCRA 95) and as such, they are looked upon with disfavor (Western Minolco Corp. vs. Commissioner of Internal Revenue, 124 SCRA 1211) . Basic is the rule that tax refunds are regarded as tax exemptions that are in derogation of the sovereign authority and are to be construed in strictissimi juris against the person or entity claiming the exemption (Philippine Phosphate Fertilizer Corporation v. Commissioner of Internal Revenue, G.R. No. 141973, June 28, 2005) . The law does not look with favor on tax exemptions and that he who would seek to be thus privileged must justify it by words too plain to be mistaken and too categorical to be misinterpreted (Sea-Land Service vs. Court of Appeals, 357 SCRA 444) . 34. Based on the foregoing, petitioner's claim for refund has no basis in fact and in law. Thus, the instant petition should be dismissed for lack of jurisdiction and/or for lack of merit." In the Answers filed on September 17, 2012, 16 November 26, 2012, 17 and January 24, 2013 18 for CTA Case Nos. 8512, 8547, and 8596, respectively, respondent raised substantially the same special and affirmative defenses as cited above. For CTA Case No. 8450, Respondent's Pre-Trial Brief 19 was filed on May 31, 2012 and petitioner's Pre-Trial Brief 20 was filed on June 4, 2012. Then, the parties submitted their Joint Stipulation of Facts and Issues 21 on July 9, 2012, which the Court approved on July 11, 2012. 22 Consequently, the pre-trial was deemed terminated. 23 On September 13, 2012, petitioner moved that CTA Case No. 8512 pending before the First Division of the CTA be consolidated with CTA Case No. 8450 pending before the Second Division. 24 The First Division granted the said consolidation with the conformity of the Second Division; thus, a pre-trial was set. 25 On January 24, 2013, petitioner filed again two motions to consolidate CTA Case No. 8547 and CTA Case No. 8596 which were both pending with the Third Division of the CTA, with CTA Case Nos. 8450 and 8512. 26 Since the Third Division granted the aforesaid consolidation with the conformity of the Second Division, CTA Case Nos. 8547 and 8596 were consolidated with CTA Case Nos. 8450 and 8512. 27 The parties' Consolidated Pre-Trial Briefs were filed on May 2, 2013 28 and May 3, 2013. 29 Petitioner filed a Motion to Avail the Provisions of Rule 13 of the Revised Rules of the Court of Tax Appeals 30 on May 3, 2013, which the Court granted on June 10, 2013. 31 As such, Mr. Joseph Cedric V. Calica was commissioned as the Independent Certified Public Accountant (CPA) on June 10, 2013. 32 The parties submitted anew a Joint Stipulation of Facts and Issues 33 on June 6, 2013. Accordingly, the Court issued a Pre-Trial Order 34 on June 19, 2013, and terminated the pre-trial. During trial, petitioner presented its witnesses, namely: Ms. Reymonda Aida B. Obrero, Joseph Cedric V. Calica, Mr. Rolando L. Vicente, and Ms. Edita C. Encarnacion. Petitioner formally offered its testimonial evidence, as well as documentary evidence, which were admitted by the Court with the exception of Exhibits "EEEE", "BBB-3226", and "BBB-3825". 35 On October 8, 2014, petitioner was allowed by the Court to present additional evidence. 36 Consequently, petitioner presented Mr. Joseph Cedric V. Calica and Mr. Isidito Camota Desina. Thereafter, petitioner formally offered its supplemental testimonial evidence as well as documentary evidence which the Court admitted in a Resolution 37 dated April 16, 2016. On the other hand, respondent's counsels manifested during hearing on April 20, 2015, that they would no longer present evidence. 38 On May 19, 2015, petitioner filed again a motion to reopen the case, 39 which the Court granted on July 23, 2015. 40 As such, petitioner presented anew Mr. Joseph Cedric V. Calica to the witness stand; and the Court admitted the supplemental documentary evidence of petitioner. 41 AIDSTE After the Court considered petitioner's Memorandum 42 filed on June 17, 2016, and the Report of the Records Division 43 dated June 20, 2016, that no memorandum has been filed by the respondent, these cases were deemed submitted for decision on June 23, 2016. 44 The parties presented the following issues 45 for the Court's determination: 1. Whether petitioner is entitled to a refund for the alleged unapplied and unutilized input VAT in the total amount of six million one hundred twenty-six thousand one hundred five pesos and 97/100 (P6,126,105.97), fifteen million four hundred sixty-one thousand five hundred fifty-four pesos and 31/100 (P15,461,554.31), ten million five hundred forty thousand eight hundred eighty-seven and 95/100 (P10,540,887.95), forty nine million sixty-four thousand four hundred eighteen and 84/100 (P49,064,418.84) for the 1st, 2nd, 3rd, and 4th quarters, respectively, of taxable year 2010; 2. Whether petitioner has complied with Section 112(A) of the National Internal Revenue Code (NIRC) of 1997, as amended; and 3. Whether the Court has jurisdiction over the case. The foregoing issues may be summarized into one main issue of whether or not petitioner is entitled to a refund in the amount of P81,192,967.07, representing its alleged unutilized input VAT attributable to its zero-rated sales for the four quarters of TY 2010. Petitioner contends that it is entitled to a refund of unutilized input VAT on its purchases of goods and services attributable to its zero-rated sales, pursuant to Section 112 (A) of the National Internal Revenue Code (NIRC) of 1997, as amended, since it complied with all the requisites provided by law to refund, and presented sufficient evidence to prove the same. Petitioner's claim finds legal basis on Section 112 (A) and (C) of the National Internal Revenue Code (NIRC) of 1997, as amended, which reads: "SEC. 112. Refunds or Tax Credits of Input Tax. (A) Zero-rated or Effectively Zero-rated Sales. Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however , That in the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (b) and Section 108(B)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further , That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods or properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales. xxx. xxx xxx xxx (C) Period within which Refund or Tax Credit of Input Taxes shall be Made. In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one-hundred-twenty-day period, appeal the decision or the unacted claim with the Court of Tax Appeals." Pursuant thereto, in order to be entitled to a refund or issuance of a TCC for unutilized input VAT attributable to zero-rated sales, the following requisites must be complied with: 1. the taxpayer must be VAT-registered; 2. the taxpayer must be engaged in zero-rated or effectively zero-rated sales; 3. the input taxes were incurred or paid; 4. the input taxes due or paid must be attributable to zero-rated sales or effectively zero-rated sales; 5. the input taxes were not applied against any output VAT liability; and 6. the claim for refund must be filed within the prescriptive period. Petitioner's administrative and judicial claims were filed within the prescriptive period The Court shall ascertain first the timeliness of the filing of petitioner's claims as the same will determine whether it is still necessary to resolve petitioner's compliance with the other requisites for input VAT refund. Applying the above-quoted Section 112 (A), the administrative claim for the issuance of a TCC or refund of input VAT must be filed with the BIR within two (2) years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made. Thus, petitioner's administrative claims for the four quarters of 2010 were filed within the two-year prescriptive period, as shown below: Taxable Quarter Close of Quarter End of 2-year period Filing of Administrative claim 1st Qtr of 2010 March 31, 2010 March 31, 2012 November 29, 2011 46 2nd Qtr of 2010 Jun. 30, 2010 Jun. 30, 2012 Mar. 5, 2012 47 3rd Qtr of 2010 Sept. 30, 2010 Sept. 30, 2012 May 30, 2012 48 4th Qtr of 2010 Dec. 31, 2010 Dec. 31, 2012 Aug. 23, 2012 49 As to petitioner's judicial claim, Section 112 (C) of the NIRC of 1997, as amended, provides that the Commissioner of Internal Revenue (CIR) has 120 days from the date of the submission of the complete documents in support of the application for tax refund/credit within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayer's recourse is to file an appeal before the Court of Tax Appeals within 30 days from receipt of the decision of the CIR. However, if after the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to the Court of Tax Appeals within 30 days after the expiration of such 120-day period. AaCTcI Applying the same to the instant case, the following are the pertinent dates to petitioner's claim for refund: Taxable Quarter Filing of Administrative Claim/Submission of Supporting Documents End of 120-day period End of 30-day period Filing of Petition for Review 1st Qtr of 2010 November 29, 2011 March 28, 2012 April 27, 2012 March 30, 2012 2nd Qtr of 2010 March 5, 2012 July 3, 2012 August 2, 2012 July 6, 2012 3rd Qtr of 2010 May 30, 2012 September 27, 2012 October 27, 2012 September 28, 2012 4th Qtr of 2010 August 23, 2012 December 21, 2012 January 20, 2013 December 28, 2012 It is clear that petitioner's judicial claims were, likewise, filed within the period prescribed by law. Petitioner is VAT-registered Indubitably, petitioner is a duly registered VAT taxpayer per BIR Certificate of Registration No. 2RC0000074406 with Tax Identification No. 003-883-626-000. 50 Petitioner has excess input taxes for the fourth quarter of the taxable year 2010 which may be attributed to its declared zero-rated or effectively zero-rated sales for the same quarter In its Quarterly VAT Returns for calendar year (CY) 2010, petitioner reported input VAT in the aggregate amount of P207,584,778.89, out of which, only the amount of P81,192,967.07 is the subject of petitioner's claim, which allegedly consisted of the following: Quarter Total Input Tax Input Tax allocated to zero-rated sales net of output tax 1st Qtr P45,772,154.50 P6,126,105.97 51 2nd Qtr 47,220,171.04 15,461,554.31 52 3rd Qtr 44,065,265.53 10,540,887.95 53 4th Qtr 70,527,187.82 49,064,418.84 54 Total P207,584,778.89 P81,192,967.07 The breakdown of the P207,584,778.89 input VAT for CY 2010 is as follows: 1st Qtr 2010 (Exhibit K) 2nd Qtr 2010 (Exhibit L) 3rd Qtr 2010 (Exhibit N) 4th Qtr 2010 (Exhibit P) Total Input Tax deferred on Capital Goods exceeding P1M from previous quarter (Line 20B) P2,419,606.20 P2,092,150.77 P1,764,695.36 P1,836,490.61 P8,112,942.94 Add: Input Tax on Purchase of Capital Goods exceeding P1M (Line 21D) - - 420,263.85 - 420,263.85 Total P2,419,606.20 P2,092,150.77 P2,184,959.21 P1,836,490.61 P8,533,206.79 Less: Input Tax on Purchase of Capital Goods exceeding P1M deferred for the succeeding period (Line 23A) 2,092,150.77 1,764,695.36 1,836,490.61 1,494,695.34 7,188,032.08 Amortized Input Tax on Purchases of Capital Goods exceeding 1M P327,455.43 P327,455.41 P348,468.60 P341,795.27 P1,345,174.71 Add: Input Tax on Current Purchases Purchase of Capital Goods not exceeding P1M (Line 21B) P8,567.14 P7,719.64 P58,113.69 P32,331.23 P106,731.70 Domestic Purchases of Goods other than Capital Goods (Line 21F) 32,195,399.88 26,692,932.73 29,448,771.67 15,290,207.62 103,627,311.90 Importation of Goods other than Capital Goods (Line 21H) 9,572,557.00 10,966,818.00 9,598,019.00 33,876,223.00 64,013,617.00 Domestic Purchase of Services (Line 21J) 3,668,175.05 9,225,245.26 4,611,892.57 20,986,630.70 38,491,943.58 Total Input tax on Current Purchases P45,444,699.07 P46,892,715.63 P43,716,796.93 P70,185,392.55 P206,239,604.18 Total Input Tax for the Period P45,772,154.50 P47,220,171.04 P44,065,265.53 P70,527,187.82 P207,584,778.89 Petitioner asserts that a portion of these input taxes incurred on purchases were attributable to its zero-rated sales/receipts, and such input taxes were neither fully utilized in the same quarter nor used against its output taxes in the subsequent periods. acEHCD In support of its reported input VAT, petitioner submitted various invoices and official receipts (ORs), 55 and Import Entry and Internal Revenue Declarations (IEIRDs). 56 Upon examination of these documents, the Court-commissioned Independent Certified Public Accountant (ICPA), Mr. Joseph Cedric V. Calica, noted the following exceptions: Exhibit 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total Domestic Purchases of Goods and Services No valid supporting documents FFF-1 P312,822.94 P142,815.37 P325,194.82 P253,802.54 P1,034,635.67 Supporting documents are not in the period covered by the claim FFF-2 1,139,713.95 93,434.70 - - 1,233,148.64 VAT not separately shown in the documents FFF-3 430,683.63 404,489.86 351,149.40 158,481.86 1,344,804.75 Incomplete or no address FFF-4 - 423.21 6,570.86 - 6,994.07 TIN of the supplier indicate NON-VAT FFF-5 950.28 - 297.45 - 1,247.73 No sales invoices/official receipts submitted by the petitioner FFF-6 224,762.17 3,801,379.60 964,168.91 1,363,004.73 6,353,315.41 subtotal P2,108,932.97 P4,442,542.74 P1,647,381.44 P1,775,289.13 P9,974,146.28 Importation of Goods and Services Not in the period covered by the claim FFF-7 P2,842,698.00 - - - P2,842,698.00 Total Exceptions by ICPA P4,951,630.97 P4,442,542.74 P1,647,381.44 P1,775,289.13 P12,816,844.28 The Court subscribes to the above findings of the ICPA on the input VAT disallowances in the amount of P12,816,844.28 for not being properly substantiated by VAT invoices or receipts, as prescribed under Sections 110 (A) and 113 (A) and (B), and 237 of the NIRC of 1997, as amended, and as implemented by Sections 4.110-1, 4.110-2, 4.110-8 and 4.113-1 of Revenue Regulations (RR) No. 16-05. In addition, the input VAT in the aggregate amount of P69,838,126.09, broken down hereunder, shall likewise be disallowed for failure to meet the substantiation requirements prescribed under the aforesaid VAT laws and regulations: Exhibit Invoice/OR No. Supplier 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1. Domestic purchases of goods and services supported by invoices/ORs wherein the input VAT amounts were not separately indicated BBB-2454 380 A.S. MAPUTI CONSTRUCTION AND ENGINEERING, SERVICE P33,942.86 BBB-2877 777 AC MORENO HAULING SERVICES P4,687.50 BBB-1980 1137 RBER INDUSTRIAL & TRADING CORPORATION P10,602.73 BBB-3134 613868 TELECOMMUNICATIONS MANAGEMENT AND SERVICES, INC. 1,539.32 BBB-3186 614456 TELECOMMUNICATIONS MANAGEMENT AND SERVICES, INC. 1,589.75 BBB-3191 7777 UNITED REBUILDERS, INC. 1,203.60 BBB-3192 5659 HISPEED INDUSTRIAL CORP. 3,535.71 BBB-3194 11544 HL TRACTOR PARTS 704.79 BBB-3218 not visible TELECOMMUNICATIONS MANAGEMENT AND SERVICES, INC. 1,871.76 BBB-3317 100446 ATLAS COPCO (PHILIPPINES), INC. 7,348.05 BBB-3324 0793 MZJT MARKETING 91,810.93 BBB-3361 543412 TELECOMMUNICATIONS MANAGEMENT AND SERVICES, INC. 1,723.61 BBB-4430 0022 AS MAPUTI MANPOWER SERVICES 16,317.34 BBB-4439 0024 AS MAPUTI MANPOWER SERVICES 17,949.85 BBB-4546 0728 DELUXE SALES & IND. CO. 3,342.86 BBB-4576 616250 TELECOMMUNICATIONS MANAGEMENT AND SERVICES, INC. 1,670.52 subtotal P33,942.86 P4,687.50 P121,930.25 P39,280.57 2. Domestic purchases of goods and services supported by NON-VAT/TIN-V invoices/ORs BBB-68 52763 HL TRACTOR PARTS P1,735.50 BBB-69 52762 HL TRACTOR PARTS 653.57 BBB-113 53292 HL TRACTOR PARTS 193.93 BBB-284 52068 HL TRACTOR PARTS 1,447.50 BBB-289 52048 HL TRACTOR PARTS 1,178.57 BBB-338 52806 HL TRACTOR PARTS 60.00 BBB-601 52909 HL TRACTOR PARTS 20,357.14 BBB-828 52876 HL TRACTOR PARTS 10,937.14 BBB-2516 5960 NATIONAL GRID CORPORATION OF THE PHILIPPINES 28,328.17 BBB-765 52900 HL TRACTOR PARTS P919.29 BBB-956 0106 MARNO TRADING 1,928.57 BBB-957 0105 MARNO TRADING 940.03 BBB-975 53182 HL TRACTOR PARTS 567.86 BBB-983 0119 MARNO TRADING 6,857.14 BBB-1062 53176 HL TRACTOR PARTS 1,714.29 BBB-1068 53148 HL TRACTOR PARTS 552.86 BBB-1102 53461 HL TRACTOR PARTS 578.57 BBB-2667 01498 ALAS CUSTOMS BROKERAGE 3,038.85 BBB-2670 1499 ALAS CUSTOMS BROKERAGE 980.01 BBB-2672 01505 ALAS CUSTOMS BROKERAGE 3,125.91 BBB-2881 2316 DAKAY CONSTRUCTION AND DEVELOPMENT CORPORATION 231,518.13 BBB-2882 2384 DAKAY CONSTRUCTION AND DEVELOPMENT CORPORATION 1,511,234.77 BBB-2923 6145 NATIONAL GRID CORPORATION OF THE PHILIPPINES 22,045.21 BBB-2946 01496 ALAS CUSTOMS BROKERAGE 474.07 BBB-2947 01497 ALAS CUSTOMS BROKERAGE 1,235.14 BBB-2959 2313 DAKAY CONSTRUCTION AND DEVELOPMENT CORPORATION 569,582.68 BBB-1519 19424 PNOC EXPLORATION CORPORATION P458,680.78 BBB-2411 0121 MARNO TRADING 1,109.76 BBB-2412 0118 MARNO TRADING 1,031.16 BBB-3015 1519 ALAS CUSTOMS BROKERAGE 2,921.72 BBB-3016 1520 ALAS CUSTOMS BROKERAGE 3,002.23 BBB-3017 1521 ALAS CUSTOMS BROKERAGE 3,116.32 BBB-3034 1526 ALAS CUSTOMS BROKERAGE 460.91 BBB-3267 01536 ALAS CUSTOMS BROKERAGE 3,164.59 BBB-3268 01533 ALAS CUSTOMS BROKERAGE 5,384.22 BBB-3270 01535 ALAS CUSTOMS BROKERAGE 3,123.57 BBB-3272 01534 ALAS CUSTOMS BROKERAGE 3,245.38 BBB-3307 01538 ALAS CUSTOMS BROKERAGE 3,179.43 BBB-3312 01539 ALAS CUSTOMS BROKERAGE 382.72 BBB-4233 01518 ALAS CUSTOMS BROKERAGE P1,009.95 BBB-4242 01530 ALAS CUSTOMS BROKERAGE 432.04 BBB-4243 01531 ALAS CUSTOMS BROKERAGE 444.82 BBB-4247 01537 ALAS CUSTOMS BROKERAGE 1,369.08 BBB-4260 01542 ALAS CUSTOMS BROKERAGE 543.94 BBB-4261 01540 ALAS CUSTOMS BROKERAGE 918.32 BBB-4262 01541 ALAS CUSTOMS BROKERAGE 569.73 BBB-4301 01554 ALAS CUSTOMS BROKERAGE 1,542.14 BBB-4446 00313 ALAS CUSTOMS BROKERAGE 3,838.22 BBB-4447 01565 ALAS CUSTOMS BROKERAGE 566.34 BBB-4448 00314 ALAS CUSTOMS BROKERAGE 571.10 BBB-4451 01566 ALAS CUSTOMS BROKERAGE 524.18 subtotal P64,891.52 P2,357,293.38 P488,802.79 P12,329.86 3. Domestic purchases of goods and services supported by unreadable invoices/ORs BBB-272 28082 PHILCOPY CORPORATION P1,281.00 BBB-2640 915005 U-FREIGHT PHILS., INC. 2,336.39 subtotal P3,617.39 - - - 4. Domestic purchases of goods and services supported by invoices/ORs dated outside the period of claim or with no year indicated BBB-3436 67940 SYCIP, GORRES, VELAYO & CO. P13,134.12 BBB-264 CI1577 MAPECON PHILS., INC. dated 2009 1,166.79 BBB-274 14-000005074 W & L TRADING CORPORATION dated 2009 783.58 BBB-275 14-000005163 W & L TRADING CORPORATION dated 2009 2,237.45 BBB-354 20291 MABUHAY VINYL CORPORATION 17,005.71 BBB-386 025987 SELLCHEM CORPORATION 21,085.71 BBB-526 SNG/0790863 AFC Fertilizer & Chemicals, Inc. 5,379.84 BBB-555 3503 YUMPIL INDUSTRIES, INC. 691.20 BBB-556 3505 YUMPIL INDUSTRIES, INC. 199.20 BBB-557 25104 UNITED REBUILDERS, INC. 2,220.00 BBB-558 3502 YUMPIL INDUSTRIES, INC. 2,084.16 BBB-614 13803 RM INDUSTRIAL SALES 326.40 BBB-615 14125 RM INDUSTRIAL SALES 1,428.00 BBB-616 14126 RM INDUSTRIAL SALES 545.25 BBB-622 11611 V AND U ENTERPRISES 3,193.93 BBB-646 62499 FSP GROUP, INC. 1,441.07 BBB-647 373076 THINKINGTOOLS, INCORPORATED 1,392.32 BBB-648 372743 THINKINGTOOLS, INCORPORATED 619.29 BBB-649 18779 A UNIWELL TECHNOLOGIES CORPORATION 4,920.00 BBB-650 138597 WILLIAMS COMMERCIAL COMPANY, INCORPORATED 816.00 BBB-651 138779 WILLIAMS COMMERCIAL COMPANY, INCORPORATED 989.08 BBB-2548 141554 GROUND-AIR LOGISTIC CORP. 12.43 BBB-2566 TOS1015835 TOYOTA CEBU CITY, INC. 2,642.66 BBB-749 0056 MARNO TRADING P475.71 BBB-750 0050 MARNO TRADING 2,041.07 BBB-751 0052 MARNO TRADING 804.00 BBB-752 0051 MARNO TRADING 1,281.43 BBB-753 6435 MZJT MARKETING 1,469.52 BBB-754 6476 MZJT MARKETING 2,065.54 BBB-755 23326 DEGALEN CORPORATION 399.12 BBB-756 23378 DEGALEN CORPORATION 364.32 BBB-757 23392 DEGALEN CORPORATION 612.00 BBB-758 23411 DEGALEN CORPORATION 499.20 BBB-759 0073 MARNO TRADING 501.43 BBB-760 0081 MARNO TRADING 557.14 BBB-761 6535 MZJT MARKETING 1,789.92 BBB-762 6482 MZJT MARKETING 164.61 BBB-763 1022 RBER INDUSTRIAL AND TRADING CORPORATION 2,121.43 BBB-764 1037 RBER INDUSTRIAL AND TRADING CORPORATION 2,110.20 BBB-797 97604 UNITED AUTOMART 276.00 BBB-798 98544 UNITED AUTOMART 978.60 BBB-799 98577 UNITED AUTOMART 804.00 BBB-800 98565 UNITED AUTOMART 384.00 BBB-801 99189 UNITED AUTOMART 979.20 BBB-802 99190 UNITED AUTOMART 2,694.60 BBB-806 99187 UNITED AUTOMART 613.20 BBB-856 0300 AIRSERVE INDUSTRIAL, INC. 37,109.57 BBB-879 30340 ASSISTCO ENERGY AND INDUSTRIAL CORPORATION 23,973.21 BBB-880 30341 ASSISTCO ENERGY AND INDUSTRIAL CORPORATION 21,428.57 BBB-890 104403 BES PACIFIC HARDWARE AND INDUSTRIAL SUPPLY, INC. 315.00 BBB-891 110014 RS COMPONENTS LIMITED 1,801.20 BBB-892 67044 SPECIALIZED BOLT CENTER MERCANTILE & ENGINEERING 324.64 BBB-893 67046 SPECIALIZED BOLT CENTER MERCANTILE & ENGINEERING 537.59 BBB-894 67045 SPECIALIZED BOLT CENTER MERCANTILE & ENGINEERING 721.61 BBB-916 161507 FOTOLINE EXPRESS, INC. 8,222.94 BBB-930 218443 YANA CHEMODITIES, INC. 388.80 BBB-1096 475444 CORD CHEMICALS, INC. 2,081.32 BBB-1117 1775192288 PILIPINAS SHELL PETROLEUM CORPORATION 21,549.89 BBB-2958 418061 PHILIPPINE CHARTER INSURANCE CORPORATION 139,302.41 BBB-4493 0092 CEBU ENERGY DEVELOPMENT CORPORATION P9,759,790.40 BBB-4572 0007 TOLEDO HOLDINGS CORPORATION 286,510.68 subtotal P84,314.19 P281,742.99 - P10,046,301.08 5. Domestic purchases of goods supported by invoices without supplier's VAT Reg. TIN or with supplier's TIN but without the word "VAT" BBB-603 13844 NFF INDUSTRIAL CORPORATION P38,571.43 BBB-874 53493 HL TRACTOR PARTS P289.29 BBB-993 0102 MARNO TRADING 1,671.43 BBB-1514 13898 NFF INDUSTRIAL CORPORATION P120,000.00 BBB-1763 16874 TRI-J MARKETING, INC. 1,404.00 BBB-1912 0135 MARNO TRADING 1,928.57 BBB-2413 229443 CEBU TRISTAR CORPORATION 3,972.60 BBB-2414 229346 CEBU TRISTAR CORPORATION 313.20 BBB-4033 048 ELASCO INTERNATIONAL CORPORATION P5,703.00 BBB-4061 0026209 DEGALEN CORPORATION 10,758.00 BBB-4077 33231 PHILCOPY CORPORATION 5,089.29 BBB-4079 15741 RM INDUSTRIAL SALES 1,425.60 subtotal P38,571.43 P1,960.72 P127,618.37 P22,975.89 6. Domestic purchase of goods supported by invoice but the amounts were not indicated therein BBB-3995 VYPI0X0053 YOKOGAWA PHILIPPINES INCORPORATED P15,794.16 subtotal - - - P15,794.16 7. Domestic purchases of services supported by VAT ORs but with notation "Not valid as source of input VAT" BBB-2940 15485 NFF INDUSTRIAL CORPORATION P7,200.00 BBB-3302 0857 ELASCO INTERNATIONAL CORPORATION P5,100.00 subtotal - P7,200.00 P5,100.00 - 8. Domestic purchases of services supported by documents other than VAT ORs BBB-2455 0415 ASEA BROWN BOVERI, INC. P23,914.29 BBB-3222 0401 00068 BDO 00683 NATIONAL GRID CORPORATION OF THE PHILIPPINES P3,473.14 subtotal P23,914.29 - P3,473.14 - 9. Domestic purchases of services not supported by ORs - - RUREX FABRICATION AND TRADING CO., INC. P1,478.57 - - SMART COMMUNICATIONS, INC. 107.04 - - TURBO ENGINE RECOVERY, INC. 14,785.71 - - ALAS CUSTOMS BROKERAGE 410.39 - - HI-SPEED INDUSTRIAL CORP. P857.14 subtotal P16,781.71 - P857.14 - 10. Exhibit reference does not refer to the amount claimed BBB-815 218190 YANA CHEMODITIES, INC. P1,296.00 subtotal P1,296.00 - - - 11. Overclaimed input VAT on domestic purchase of service BBB-4284 2964714 CEBU PORT AUTHORITY (103,913.87 per sched. less 60,030.42 per OR) P43,883.42 subtotal - - - P43,883.42 12. Exhibit was denied admission by the Court per Resolution dated October 8, 2014 BBB-3226 AVESTRONICS INDUSTRIAL SALES & SERVICES, INC. P4,858.44 subtotal - - P4,858.44 - 13. Importation of goods supported by IEIRD but without machine validation CCC-12 10370392 I AND N INTERNATIONAL CORP. P22,445.00 CCC-13 102814004 PM CONTROL SYSTEM PTE. LTD. 107,152.00 CCC-14 102813961 MAN DISEL SAS 802,273.00 CCC-15 103813821 I AND N INTERNATIONAL CORP. 49,833.00 CCC-16 104522092 TECHNOMARINE CO. LTD. 561,944.00 CCC-19 104984582 MITSUBISHI CORPORATION P461,599.00 CCC-20 104522241 FUJI TRADING CO. LTD. 101,015.00 CCC-21 104984512 FUJI TRADING CO. LTD. 703,729.00 CCC-22 104984546 EASTERN ENERGY RESOURCES FZE 2,486,778.00 CCC-23 104984616 EASTERN ENERGY RESOURCES FZE 2,323,132.00 CCC-24 104984756 EASTERN ENERGY RESOURCES FZE 2,496,606.00 CCC-25 104984747 EASTERN ENERGY RESOURCES FZE 2,393,959.00 CCC-26 17175445 EASTERN ENERGY RESOURCES FZE P2,539,536.00 CCC-27 107336083 EASTERN ENERGY RESOURCES FZE 2,503,151.00 CCC-28 108861103 I & N INTERNATIONAL CORP. 34,221.00 CCC-29 107336092 HOLCIM TRADING PTE. LTD. 4,521,111.00 CCC-30 SN 107336047 Chris Marine AB P48,183.00 CCC-31 SN 108999913 Eastern Energy Resources Fze 2,343,144.00 CCC-32 SN 108999947 Eastern Energy Resources Fze 2,426,488.00 CCC-33 SN 108861207 Eastern Energy Resources Fze 2,540,278.00 CCC-34 SN 108861137 Eastern Energy Resources Fze 2,553,446.00 CCC-35 SN 107336257 Eastern Energy Resources Fze 2,611,779.00 CCC-36 SN 108999825 Eon Far East Limited 5,588,062.00 CCC-37 SN 108999807 Fuji Trading Co. Ltd. 238,927.00 CCC-38 SN 108861024 I and N International Corp. 9,033.00 CCC-39 SN 108861173 I and N International Corp. 29,612.00 CCC-40 SN 108999782 I and N International Corp. 48,638.00 CCC-41 SN 108999764 I and N International Corp. 59,378.00 CCC-42 SN 108999877 PT Insani Baraperkasa 3,138,963.00 CCC-43 SN 108999886 Sun Machinery & Trading, Inc. 81,092.00 CCC-44 SN 107336144 Sun Machinery & Trading, Inc. 393,027.00 CCC-45 SN 108861234 Technomarine Co. Ltd. 175,625.00 CCC-46 SN 111872241 Eastern Energy Resources Fze 2,240,191.00 CCC-47 SN 111872223 Yashima and Co. Ltd. 6,763,191.00 CCC-48 SN 101683294 I and N International Corp. 6,523.00 CCC-49 SN-108999931 I and N International Corp. 31,038.00 CCC-50 SN 108861191 Sun Machinery & Trading, Inc. 178,775.00 CCC-51 SN 108999895 Eastern Energy Resources Fze 2,370,830.00 subtotal P1,543,647.00 P10,966,818.00 P9,598,019.00 P33,876,223.00 Total per quarter 1,810,976.39 13,619,702.59 10,350,659.13 P44,056,787.98 Grand Total P69,838,126.09 Meanwhile, Section 110 (A) of the NIRC of 1997, as amended, and implemented by Section 4.110-3 of RR No. 16-2005, provides that the input VAT claim on capital goods purchases attributable to zero-rated sales may be claimed either in full during the month of acquisition, or spread over a period of time, depending on the aggregate acquisition cost of the capital goods in the calendar month. If the aggregate acquisition cost exceeds P1,000,000.00, the claim for input tax should be spread over sixty (60) months or the estimated useful life of the capital goods, whichever is shorter. On the other hand, if aggregate acquisition cost does not exceed P1,000,000.00, the total input taxes shall be allowed as credit/refund in the month of acquisition. However, petitioner failed to provide documents in support of its purchases of capital goods exceeding P1,000,000.00 from previous period, nor did the latter identify which among the substantiated domestic purchases of goods and services pertained to the current purchases of capital goods exceeding P1,000,000.00. Hence, the amortized input VAT relating thereto in the amount of P1,345,174.71 shall also be disallowed. Therefore, out of petitioner's reported input VAT of P207,584,778.89 for CY 2010, only the amount of P123,584,633.81 represents petitioner's valid input VAT, computed as follows: 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total Input tax per Returns P45,772,154.50 P47,220,171.04 P44,065,265.53 P70,527,187.82 P207,584,778.89 Less: Disallowances Per ICPA's findings 4,951,630.97 4,442,542.74 1,647,381.44 1,775,289.13 12,816,844.28 Per Court's further verification 1,810,976.39 13,619,702.59 10,350,659.13 44,056,787.98 69,838,126.09 Unsupported Amortized Input VAT on purchase of capital goods exceeding P1M 327,455.43 327,455.41 348,468.60 341,795.27 1,345,174.71 Total Disallowances P7,090,062.79 P18,389,700.74 P12,346,509.17 P46,173,872.38 P84,000,145.08 Valid Input VAT P38,682,091.71 P28,830,470.30 P31,718,756.36 P24,353,315.44 P123,584,633.81 However, considering that petitioner is engaged both in taxable sales subject to zero percent (0%) and twelve percent (12%) rates, as well as exempt sales, and its input VAT cannot be directly or entirely attributed to any of the transactions, the Court shall allocate the valid input VAT proportionately on the basis of the volume of its sales. Thus: 1st Qtr 2010 2nd Qtr 2010 3rd Qtr 2010 4th Qtr 2010 Total Zero-Rated Sale (A) P403,664,957.64 P378,881,751.80 P489,216,287.95 P523,898,827.74 P1,795,661,825.13 VAT Sales (B) 323,285,336.68 254,653,568.27 269,413,258.33 164,996,139.32 1,012,348,302.60 Sale to Government (C) 12,567,124.40 15,843,946.40 19,426,859.00 15,062,327.60 62,900,257.40 Exempt Sales (D) 1,217,768.43 678,481.14 1,715,904.62 1,576,163.82 5,188,318.01 Total Sales (E) P740,735,187.15 P650,057,747.61 P779,772,309.90 P705,533,458.48 P2,876,098,703.14 1st Qtr 2010 2nd Qtr 2010 3rd Qtr 2010 4th Qtr 2010 Total Substantiated Input VAT (F) P38,682,091.71 P28,830,470.30 P31,718,756.36 P24,353,315.44 P123,584,633.81 Allocation: Zero-Rated Sale [G = (A/E x F)] P21,079,874.67 P16,803,644.19 P19,899,824.66 P18,083,725.52 P75,867,069.05 VAT Sales [H = (B/E x F)] 16,882,353.18 11,294,046.05 10,958,908.64 5,695,269.27 44,830,577.14 Sale to Government (C/E x F) 656,270.51 702,689.00 790,225.30 519,915.27 2,669,100.07 Exempt Sales (D/E x F) 63,593.35 30,091.07 69,797.76 54,405.38 217,887.55 Total P38,682,091.71 P28,830,470.30 P31,718,756.36 P24,353,315.44 P123,584,633.81 Since petitioner's input VAT allocated to VATable sales in the respective amounts of P16,882,353.18, P11,294,046.05, P10,958,908.64 and P5,695,269.27 for the first, second, third and fourth quarters of CY 2010 is not enough to cover its output VAT liability in the amounts of P38,794,240.40, P30,558,428.19, P32,329,591.00 and P19,799,536.72 for the first, second, third and fourth quarters of CY 2010, respectively, the substantiated input VAT attributable to zero-rated sales shall be utilized against the remaining output VAT of P21,911,887.22, P19,264,382.14, P21,370,682.36 and P14,104,267.45 for the first, second, third and fourth quarters of CY 2010, respectively. SDHTEC Apparently, petitioner has no excess input VAT for the first, second and third quarters of CY 2010. While, for the fourth quarter of CY 2010, petitioner has excess input VAT of P3,979,458.07 which can be attributed to the entire amount of P523,898,827.74 zero-rated sales declared by petitioner in its Quarterly VAT Return for the fourth quarter of the same year, to wit: 1st Qtr 2010 2nd Qtr 2010 3rd Qtr 2010 4th Qtr 2010 Output tax on VAT Sales P38,794,240.40 P30,558,428.19 P32,329,591.00 P19,799,536.72 Less: Input VAT allocated to VAT Sales (H) 16,882,353.18 11,294,046.05 10,958,908.64 5,695,269.27 Remaining output tax P21,911,887.22 P19,264,382.14 P21,370,682.36 P14,104,267.45 Less: Input VAT allocated to zero-rated sales (G) 21,079,874.67 16,803,644.19 19,899,824.66 18,083,725.52 Output tax still due/(Excess Input VAT) P832,012.55 P2,460,737.95 P1,470,857.70 P(3,979,458.07) Petitioner had zero-rated or effectively zero-rated sales for the fourth quarter of taxable year 2010 Petitioner is duly registered with the Securities and Exchange Commission (SEC) and is engaged in the business of acquiring, owning, rehabilitating, maintaining and operating coal-fired and oil-fired electrical generation facilities. 57 As a generation company, petitioner has been granted by the Energy Regulatory Commission (ERC) with the authority to operate its generation facilities, under Certificate of Compliance No. 09-11-GXT 61-0066. 58 Petitioner asserts that it is engaged in zero-rated sales as it sells and supplies electric power to Philippine Economic Zone Authority (PEZA) registered enterprise, Board of Investments (BOI) registered enterprise, and other entities whose purchases from local suppliers are entitled to VAT zero-rating. For the fourth quarter of CY 2010, petitioner has allegedly sold and supplied electric power to Balamban Enerzone Corporation (BEC), a VAT-registered entity duly registered with the PEZA, 59 and Carmen Copper Corporation (CCC), a VAT-registered entity duly registered with the BOI. 60 Accordingly, the transactions of PEZA and BOI-registered entities with local suppliers of goods and services, such as herein petitioner, qualified for VAT zero-rating pursuant to Sections 106 (A) (2) (a) (5) and 108 (B) (3) of the NIRC of 1997, as amended, which explicitly provide: "SEC. 106. Value-Added Tax on Sale of Goods or Properties. (A) Rate and Base of Tax. x x x xxx xxx xxx (2) The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export Sales. The term 'export sales' means: xxx xxx xxx (5) Those considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investment Code of 1987, and other special laws; and" "SEC. 108. Value-Added Tax on Sale of Services and Use or Lease of Properties. xxx xxx xxx (B) Transactions Subject to Zero Percent (0%) Rate. The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0%) rate: xxx xxx xxx (3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;" Furthermore, pertinent provisions of Revenue Regulations (RR) No. 16-2005, as amended, state: " SEC. 4.106-5. Zero-Rated Sales of Goods or Properties . x x x The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export sales. 'Export Sales' shall mean: xxx xxx xxx (5) Transactions considered export sales under Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987, and other special laws. xxx xxx xxx For purposes of zero-rating, the export sales of registered export traders shall include commission income. The exportation of goods on consignment shall not be deemed export sales until the export products consigned are in fact sold by the consignee; and Provided , finally, that sales of goods, properties or services made by a VAT-registered supplier to a BOI-registered manufacturer/producer whose products are 100% exported are considered export sales. A certification to this effect must be issued by the Board of Investment (BOI) which shall be good for one year unless subsequently re-issued by the BOI. AScHCD xxx xxx xxx (c) 'Sales to Persons or Entities Deemed Tax-exempt under Special Law or International Agreement.' Sales of goods or property to persons or entities who are tax-exempt under special laws, e.g. , sales to enterprises duly registered and accredited with the Subic Bay Metropolitan Authority (SBMA) pursuant to R.A. No. 7227, sales to enterprises duly registered and accredited with the Philippine Economic Zone Authority (PEZA) or international agreements to which the Philippines is signatory, such as, Asian Development Bank (ADB), International Rice Research Institute (IRRI), etc., shall be effectively subject to VAT at zero-rate." " SEC. 4.108-5. Zero-Rated Sale of Services . (a) In general. A zero-rated sale of service (by a VAT-registered person) is a taxable transaction for VAT purposes, but shall not result in any output tax. However, the input tax on purchases of goods, properties or services related to such zero-rated sale shall be available as tax credit or refund in accordance with these Regulations. (b) Transactions Subject to Zero Percent (0%) VAT Rate. The following services performed in the Philippines by a VAT-registered person shall be subject to zero percent (0%) VAT rate: xxx xxx xxx (3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;" Based on the foregoing, petitioner's sales of services to BEC and CCC, which are entities duly registered with PEZA and BOI, respectively, are subject to zero percent (0%) VAT rate pursuant to Section 108 (B) (3) of the NIRC of 1997, as amended. To prove that petitioner had zero-rated sales for the said fourth quarter of CY 2010, petitioner presented various sales invoices and official receipts (OR) 61 issued to BEC and CCC. Upon examination of the supporting invoices and ORs, the Court finds that the amount of P13,589,501.31 representing petitioner's sales to BEC and CCC, are not covered by VAT zero-rated ORs, thus, shall be denied VAT zero-rating, to wit: Exhibit OR No. Amount per schedule 62 Amount per OR Amount Disallowed EEE-208 2273 P18,302,479.34 P12,726,717.57 P5,575,761.77 EEE-232 2285 137,912,255.16 129,898,515.62 8,013,739.54 Total P13,589,501.31 Likewise, petitioner asserts that during the same period, it sold and supplied electric power to a VAT-registered entity, Cebu Electric Cooperative III (CEBECO III), whose electric power was ultimately distributed to BEC and CCC. Allegedly, portions of petitioner's energy fee billing to CEBECO III were pass through charges and directly attributable to BEC and CCC. Thus, petitioner is also of the considered view that its sales to CEBECO III are, likewise, considered as zero-rated sales following Revenue Memorandum Circular (RMC) No. 61-05 dated October 27, 2005. However, the Court does not subscribe to petitioner's postulation that its sales to CEBECO III are subject to zero-rating since the latter is a non-PEZA-registered nor a BOI-registered entity. Consequently, petitioner's sales to CEBECO III for the fourth quarter of CY 2010 in the total amount of P34,689,126.77 shall likewise be disallowed, to wit: Exhibit No. OR No. OR Date Amount EEE-210 2494 27-Oct-10 P12,168,778.25 EEE-217 2498 19-Nov-10 11,593,201.97 EEE-229 2511 22-Dec-10 10,927,146.55 Total P34,689,126.77 Thus, out of the total declared zero-rated sales of P523,898,827.74 for the fourth quarter of CY 2010, only the amount of P475,620,199.66 represents petitioner's valid zero-rated sales, as computed below: Zero-Rated Sales per Returns P523,898,827.74 Less: Disallowances on: Sales to BEC & CCC 13,589,501.31 Sales to CEBECO III 34,689,126.77 48,278,628.08 Valid Zero-Rated Sales P475,620,199.66 Petitioner is entitled to a partial refund of its excess input VAT attributable to valid zero-rated sales As earlier discussed, petitioner has no excess input VAT for the first, second and third quarters of CY 2010. While, for the fourth quarter of CY 2010, petitioner has excess input VAT of P3,979,458.07 which can be attributed to the entire amount of P523,898,827.74 zero-rated sales declared by petitioner in its Quarterly VAT Return for the fourth quarter of the same year. However, only the input VAT of P3,612,740.75 is attributable to the valid zero-rated sales of P475,620,199.66, as computed below: Excess Input Tax attributable to zero-rated sales P3,979,458.07 Divided by Declared Zero-Rated Sales P523,898,827.74 Multiply by Valid Zero-Rated Sales P475,620,199.66 Refundable Input VAT attributable to Zero-Rated Sales P3,612,740.75 Although the claimed input VAT was carried-over by petitioner in its Quarterly VAT Return for the first quarter of 2011 until the third quarter of 2012, 63 the same remained unutilized since it was deducted in the third Quarterly VAT Return of 2012, as "VAT Refund/TCC claimed" 64 from the total available input tax of P174,303,476.48. 65 Thus, the claimed input taxes for the fourth quarter of CY 2010 could not have been carried-over/utilized in the succeeding fourth quarter of 2012. AcICHD WHEREFORE , premises considered, the Petitions for Review docketed as CTA Case Nos. 8450, 8512, and 8547 covering petitioner's claims for refund for the first, second and third quarters, respectively, are denied for lack of merit. On the other hand, the Petition for Review docketed as CTA Case No. 8596 is PARTIALLY GRANTED . Accordingly, respondent is ordered to refund the amount of P3,612,740.75 in favor of petitioner representing the latter's excess input VAT attributable to zero-rated sales/receipts for the fourth quarter of CY 2010. SO ORDERED. (SGD.) CAESAR A. CASANOVA Associate Justice Juanito C. Castaeda, Jr. and Catherine T. Manahan, JJ. , concur. Footnotes 1. Docket, CTA Case No. 8450 (Vol. I), pp. 6-22; Docket, CTA Case No. 8512, pp. 10-26; Docket (Vol. I), CTA Case No. 8547, pp. 5-21; Docket, CTA Case No. 8596, pp. 6-22. 2. (5) Q & A of Judicial Affidavit of Ms. Reymonda Aida B. Obrero, Exhibit "RR", Docket CTA Case No. 8450 (Vol. I), p. 760. 3. Paragraph 2, I. Summary of Admitted Facts, Joint Stipulation of Facts and Issues (JSFI), Docket CTA Case No. 8450 (Vol. I), p. 168; Exhibit "A". 4. Par. 4, I. Summary of Admitted Facts, JSFI, Docket CTA Case No. 8450 (Vol. I), p. 169; Exhibit "D". 5. Exhibit "C". 6. Par. I (3), JSFI, Docket CTA Case No. 8450 (Vol. I), p. 169. 7. Par. 1, I. Summary of Admitted Facts, JSFI, Docket CTA Case No. 8450 (Vol. I), p. 168. 8. Exhibit "B". 9. Exhibits "J", "L", "M", and "O". 10. Exhibits "K", "N", and "P". 11. Exhibits "E", and "F". 12. Exhibits "CC" and "DD". 13. Exhibits "EE" and "FF". 14. Exhibits "GG" and "HH". 15. Docket CTA Case No. 8450 (Vol. I), pp. 103-129. 16. Docket CTA Case No. 8512, pp. 109-123. 17. Docket CTA Case No. 8547, pp. 92-113. 18. Docket CTA Case No. 8596, pp. 90-101. 19. Docket CTA Case No. 8450 (Vol. I), pp. 131 to 135. 20. Docket CTA Case No. 8450 (Vol. I), pp. 136 to 151. 21. Docket CTA Case No. 8450 (Vol. I), pp. 168 to 171. 22. Resolution, Docket CTA Case No. 8450, (Vol. I), p. 172. 23. Ibid. 24. Motion to Consolidate, Docket CTA Case No. 8450 (Vol. I), pp. 193 to 196. 25. Resolutions dated November 16, 2012 and December 4, 2012, Docket CTA Case No. 8450 (Vol. I), p. 202 and p. 204, respectively. 26. Motions to Consolidate, Docket CTA Case No. 8450 (Vol. I), pp. 208 to 212 and pp. 213 to 217. 27. Resolutions dated February 7, 2013; February 11, 2013; February 15, 2013; and February 21, 2013, Docket CTA Case No. 8450 (Vol. I), p. 224, p. 226, p. 240, and p. 242, respectively. 28. Docket CTA Case No. 8450 (Vol. I), pp. 244-248. 29. Docket CTA Case No. 8450 (Vol. I), pp. 407-420. 30. Docket CTA Case No. 8450 (Vol. I), pp. 426 to 429. 31. Minutes of the Hearing, Docket CTA Case No. 8450 (Vol. I), p. 450. 32. Docket CTA Case No. 8450 (Vol. I), p. 451. 33. Docket CTA Case No. 8450 (Vol. I), pp. 447 to 449. 34. Docket CTA Case No. 8450 (Vol. I), pp. 453 to 456. 35. Resolutions dated September 8, 2014 and October 8, 2014, Docket CTA Case No. 8450 (Vol. II), pp. 921 to 922 and pp. 956 to 957, respectively. 36. Resolution, Docket CTA Case No. 8450 (Vol. II), p. 956. 37. Resolution dated April 16, 2015, Docket CTA Case No. 8450 (Vol. IV), pp. 2237 to 2238. 38. Resolution, Docket CTA Case No. 8450 (Vol. IV), p. 2241. 39. Motion to Reopen the Case, Docket CTA Case No. 8450 (Vol. I), pp. 2246 to 2251. 40. Resolution, CTA Case No. 8450 (Vol. V), pp. 2257 to 2258. 41. Resolution dated April 14, 2016, Docket CTA Case No. 8450 (Vol. V), pp. 2336 to 2337. 42. Docket CTA Case No. 8450 (Vol. V), pp. 2344 to 2372. 43. Docket CTA Case No. 8450 (Vol. V), p. 2375. 44. Resolution, docket CTA Case No. 8450, (Vol. V), p. 2376. 45. II. Statement of the Issues, JSFI, Docket CTA Case No. 8450 (Vol. I), pp. 448 to 449. 46. Exhibits "E" and "F". 47. Exhibits "CC" and "DD". 48. Exhibits "EE" and "FF". 49. Exhibits "GG" and "HH". 50. Exhibit "D". 51. Petition for Review, Docket CTA Case No. 8450 (Vol. I), pp. 18 to 19. 52. Petition for Review, Docket CTA Case No. 8512, pp. 22 to 23. 53. Petition for Review, Docket CTA Case No. 8547, pp. 17 to 18. 54. Petition for Review, Docket CTA Case No. 8596, pp. 18 to 19. 55. Exhibits "BBB-1" to "BBB-4578", except Exhibits "BBB-3226" and "BBB-3825" which were denied admission. 56. Exhibits "CCC-1" to "CCC-51". 57. Exhibits "A" and "B". 58. Exhibits "C" to "C-1". 59. Exhibits "H" to "H-6" and "I". 60. Exhibits "G-1" to "G-3". 61. Exhibits "EEE-178" to "EEE-242". 62. Exhibit "EEE". 63. Exhibits "R", "U", "W", "Y", "AA", "JJ", "MM". 64. Exhibit "MM", Line 23D. 65. Exhibit "MM", Line 22.