Petron Corp. v. Commissioner of Internal Revenue

SPECIAL THIRD DIVISION [C.T.A. CASE NOS. 9738 & 9741. August 1, 2023.] PETRON CORPORATION , petitioner , vs. COMMISSIONER OF INTERNAL REVENUE , respondent . DECISION MODESTO-SAN PEDRO , J p : The Case The instant consolidated cases involve a claim for refund or issuance of Tax Credit Certificate ("TCC") of petitioner's alleged erroneously paid excise tax arising from the sale and delivery of its imported Jet A-1 fuel to various international carriers and tax-exempt entities for the taxable period from 23 December 2015 to 31 December 2016 in the amount of Three Hundred Sixty Five Million One Hundred Sixty Eight Thousand Eight Hundred Ninety Seven and 54/100 Pesos (Php365,168,897.54), 1 and from the sale and delivery of its locally manufactured Jet A-1 fuel and unleaded gasoline fuel to various international carriers and tax-exempt entities for the taxable period from 1 January 2016 to 31 December 2016 in the amount of Thirty Two Million One Hundred Twenty Seven Thousand Six Hundred Thirty Three and 6/100 Pesos (Php32,127,633.06), 2 or in the aggregate amount of Three Hundred Ninety Seven Million Two Hundred Ninety Six Thousand Five Hundred Thirty and 60/100 (Php397,296,530.60). HTcADC The Parties Petitioner is a corporation duly registered with the Securities and Exchange Commission with Company Registration No. 31171. It is also duly registered with the Bureau of Internal Revenue ("BIR") with BIR Certificate of Registration No. OCN 8RC0000559947 and Taxpayer's Identification Number 000-168-801-000. 3 Respondent, Commissioner of Internal Revenue ("CIR"), is sued in his official capacity with the power to perform the duties of his office, including, among others, the duty to act on and approve claims for refund or issuance of TCC, as provided by law, particularly the National Internal Revenue Code of 1997, as amended ("NIRC") . 4 The Facts Petitioner's main business is to manufacture, import, and sell petroleum products which include Jet A-1 Fuel and unleaded gasoline fuel. 5 In light of this, petitioner operates the Petron Bataan Refinery ("PBR") where crude oil is processed into a full range of petroleum products, which include Jet A-1 fuel and unleaded gasoline fuel. In certain instances, petitioner imports Jet A-1 fuel when its local production is insufficient to supply the projected demand for the said fuel type. 6 CAIHTE Petitioner pays excise taxes on the imported Jet A-1 fuel upon their importation and before removal or release from the custody of the Bureau of Customs ("BOC") at Port Limay, Bataan, at the rate of P3.67 per liter pursuant to Section 148 (g) of the NIRC . 7 After importation, the imported Jet A-1 fuel is then transferred to the PBR for storage, after which it is withdrawn and delivered to petitioner's various depots for eventual sale and delivery to various customers, including international carriers and tax-exempt entities. 8 Petitioner also pays excise taxes on the locally produced Jet A-1 fuel and unleaded gasoline fuels before their removal from PBR, at the rate of P3.67 per liter for Jet A-1 fuel and P4.35 per liter for unleaded gasoline fuel, pursuant to Sections 148 (g) and 148 (f) of the NIRC . 9 The locally produced Jet A-1 fuel is transferred from the PBR to petitioner's various depots for eventual sale and delivery to various customers, including international carriers and tax-exempt entities. Similarly, the locally produced unleaded gasoline fuel are transferred from the PBR to petitioner's various depots for eventual sale and delivery to various tax-exempt entities. 10 From 23 December 2015 to 31 December 2016, petitioner imported Jet A-1 fuel as a finished product. Pursuant to Section 131 (A) in relation to Section 148 (g) of the NIRC , petitioner paid to the BOC the corresponding taxes and fees, including excise taxes. 11 Also, from 1 January 2016 to 31 December 2016, petitioner locally produced Jet A-1 fuel and unleaded gasoline fuel as finished products. Hence, pursuant to Section 130 (A) (2) in relation to Section 148 (g) and Section 148 (f) of the NIRC , petitioner paid to the BIR the corresponding excise taxes. 12 A total of Ninety Nine Million Five Hundred One Thousand Sixty Two (99,501,062) liters of the above-mentioned imported Jet A-1 fuel, for which petitioner paid excise taxes in the amount of Three Hundred Sixty Five Million One Hundred Sixty Eight Thousand Eight Hundred Ninety Seven and 54/100 Pesos (Php365,168,897.54), were sold to various: (1) international carriers of both Philippine and foreign registry for their use and consumption outside the Philippines; (2) international carriers of foreign registry whose countries of registry exempt Philippine carriers from similar taxes; and (3) tax-exempt entities or agencies covered by tax treaties, conventions, and other international agreements for their use or consumption. 13 Further, a total of Seven Million Seven Hundred Twenty Eight Thousand Seven Hundred Sixty Eight (7,728,768) liters of the above-mentioned locally produced Jet A-1 fuel for which petitioner paid excise taxes in the amount of Twenty Eight Million Three Hundred Sixty Four Thousand Five Hundred Seventy Eight and 56/100 Pesos (Php28,364,578.56) were sold to various: (1) international carriers of both Philippine and foreign registry for their use and consumption outside the Philippines; (2) international carriers of foreign registry whose countries of registry exempt Philippine carriers from similar taxes; and (3) tax exempt entities or agencies covered by tax treaties, conventions and other international agreements. 14 aScITE Finally, a total of Eight Hundred Sixty Five Thousand Seventy (865,070) liters of locally produced unleaded gasoline fuel, for which petitioner paid excise taxes in the amount of Three Million Seven Hundred Sixty Three Thousand Fifty Four and 50/100 Pesos (Php3,763,054.50) were sold to various tax exempt entities or agencies covered by tax treaties, conventions and other international agreements for their use or consumption. 15 Petitioner then filed its application for refund or issuance of TCC in the total amount of Three Hundred Sixty Five Million One Hundred Sixty Eight Thousand Eight Hundred Ninety Seven and 54/100 Pesos (P365,168,897.54) representing erroneously paid excise tax on imported Jet A-1 fuel on 20 November 2017 with the Large Taxpayer Excise Audit Division II. 16 On the other hand, petitioner filed its application for refund or issuance of TCC in the total amount of Thirty-Two Million One Hundred Twenty-Seven thousand Six Hundred Thirty-Three and 6/100 Pesos (P32,127,633.06) representing erroneously paid excise tax on locally manufactured Jet A-1 fuel and unleaded gasoline fuel on 24 November 2017 with the Large Taxpayer Excise Audit Division II. 17 Due to respondent's inaction on said administrative claims, petitioner filed Petitions for Review before the Court of Tax Appeals ("CTA"), as follows: 18 a. The judicial claim for refund pertaining to the excise tax on imported Jet A-1 fuel was filed on 20 December 2017. The case was docketed as CTA Case No. 9738 and was raffled to this Court's Third Division. 19 b. The judicial claim pertaining to the excise tax on locally manufactured Jet A-1 fuel and unleaded gasoline fuel was filed on 20 December 2017. The case was docketed as CTA Case No. 9741 and was raffled to the Court's First Division. 20 Proceedings under CTA Case No. 9738 On 23 February 2018, respondent filed his Answer in CTA Case No. 9738. 21 Pre-Trial then ensued on 16 October 2018. 22 A Pre-Trial Order was subsequently issued by the Court on 17 January 2019. 23 During trial proper, petitioner presented the testimonies of the following witnesses: a. Ma. Clarissa C. Arguelles Tax Manager; 24 b. Michael F. Manzano Commercial Services Manager; 25 DETACa c. Leon G. Pausing II Industrial Trade Head, and previously, Selling Systems, Training and Development National Manager and National Account Sales Manager; 26 d. Allan V. Peczon Area Sales Manager-Mindanao, Industrial Trade, and previously, Area Sales Manager-Key Accounts, Industrial Trade; 27 e. Allan James T. Tenorio Terminal Manager, Joint Oil Companies Aviation Fuel Storage Plant ("JOCASP")/Ninoy Aquino International Airport ("NAIA"); 28 f. Richard L. Wong Terminal Manager, Iloilo Depot; 29 and g. Marissa U. Viray Operations Finance Manager. 30 Petitioner also engaged the services of a Court-commissioned Independent Certified Public Accountant ("ICPA"), Ms. Madonna Mia S. Dayego, 31 who submitted an ICPA Report summarizing her findings on the voluminous documents presented by petitioner for CTA Case No. 9738. 32 On 27 November 2019, petitioner filed a Motion to Consolidate CTA Case No. 9738 with CTA Case No. 9741. 33 In a Resolution, dated 5 February 2020, the latter case, then pending before the Court's First Division, was consolidated with CTA Case No. 9738, which bears a lower docket number. 34 Proceedings under CTA Case No. 9741 On 21 February 2018, respondent filed his Answer in CTA Case No. 9741. 35 On 28 March 2019, Pre-Trial ensued for the instant case, 36 and a Pre-Trial Order was then issued by this Court's First Division on 17 May 2019. 37 During trial proper, petitioner presented the testimonies of the following witnesses: a. Ma. Clarissa C. Arguelles Tax Manager; 38 b. Leon G. Pausing II Industrial Trade Head, and previously, Selling Systems, Training and Development National Manager and National Account Sales Manager; 39 c. Allan V. Peczon Area Sales Manager-Mindanao, Industrial Trade, and previously, Area Sales Manager-Key Accounts, Industrial Trade; 40 d. Allan James T. Tenorio Terminal Manager, JOCASP/NAIA; 41 e. Richard L. Wong Terminal Manager, Iloilo Depot; 42 and f. Marissa U. Viray Operations Finance Manager. 43 Petitioner once again engaged the services of Court-commissioned ICPA Dayego, 44 who submitted an ICPA Report summarizing her findings on the voluminous documents presented by petitioner. 45 HEITAD On 27 November 2019, petitioner filed a Motion to Consolidate CTA Case No. 9741 CTA Case No. 9738, 46 which was granted in a Resolution, dated 3 December 2019. 47 Proceedings after consolidation On 15 October 2020, petitioner submitted a consolidated ICPA Report to assist the Court in properly resolving the two (2) refund cases which had been consolidated. 48 Likewise, petitioner submitted a Judicial Affidavit of its witness, ICPA Dayego, summarizing her findings on the consolidated ICPA Report. 49 On 3 November 2020, the ICPA was placed on the witness stand for cross-examination in relation to her testimony on the consolidated ICPA Report. 50 On 24 February 2021, petitioner filed its Formal Offer of Evidence, 51 to which respondent did not interpose any objection. 52 Thus, in a Resolution, dated 14 October 2021, this Court admitted all of petitioner's Exhibits. 53 Respondent then manifested that he would no longer present any evidence for the instant consolidated case. 54 On 23 June 2022, petitioner filed its Memorandum 55 while respondent filed none. 56 With no memorandum filed by respondent, the case was submitted for Decision on 2 August 2022. 57 Hence, this Decision. The Issues The issues submitted for this Court's resolution are: Whether petitioner is entitled to the refund or issuance of TCC in the amount of Three Hundred Sixty Five Million One Hundred Sixty Eight Thousand Eight Hundred Ninety Seven and 54/100 Pesos (P365,168,897.54) representing excise tax paid for its importation of Jet A-1 fuel which were subsequently sold and delivered to various international carriers and to tax-exempt entities; 58 and Whether or not petitioner is entitled to the refund or issuance of TCC in the amount of Thirty-Two Million One Hundred Twenty-Seven thousand Six Hundred Thirty-Three and 6/100 Pesos (P32,127,633.06) representing excise tax paid for its local production of Jet A-1 fuel and unleaded gasoline fuel during the period 1 January 2016 to 31 December 2016 which were sold and delivered to various international carriers and to tax-exempt entities. 59 Arguments of the Parties Petitioner's Arguments 60 Petitioner raises the following major arguments to prove that it is entitled to a refund of erroneously paid excise tax on its imported Jet A-1 fuel, and locally manufactured Jet A-1 fuel and unleaded gasoline fuel: aDSIHc First , both the administrative and judicial claims for refund or issuance of TCC were timely filed; Second , the imported and locally produced tax-paid Jet A-1 fuel and unleaded gasoline fuel sold and delivered to various international carriers and to tax-exempt entities are exempt from excise tax under Section 135 (a) and 135 (b) of the NIRC , and any excise tax paid on their removal was erroneously paid; and Third , petitioner has satisfied the requirements, under Sections 204 (c) and 229 of the NIRC , to be entitled to a refund of erroneously or illegally collected taxes. Respondent's Arguments 61 In refutation, respondent alleged that petitioner is not entitled to the refund sought because Section 135 of the NIRC only provides a tax exemption in favor of the buyer of petroleum products named in said provision. What the said provision prohibits is the passing by the importer or manufacturer of petroleum products of the burden of excise tax to the buyers of petroleum products specifically made exempt under said provision. Simply put, excise tax is still due from the importer or manufacturer of petroleum products but it cannot be passed on to the buyers and users specifically made exempt by Section 135 of the NIRC . Claims for refund of excise tax is authorized only under Section 130 (D) of the NIRC , which pertain to exports of locally manufactured products, and not under Section 135 of the NIRC . The Ruling of the Court This Court PARTIALLY GRANTS the consolidated Petitions for Review. Requisites for claiming refund of erroneously paid taxes. The provisions that govern the present claim for refund of erroneously paid excise tax are Sections 204 and 229 of the NIRC , which read: " SEC. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes . The Commissioner may (A) x x x (B) x x x (C) Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction. No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty: Provided, however, That a return filed showing an overpayment shall be considered as a written claim for credit or refund." (Emphasis and underscoring, Ours.) ATICcS " SEC. 229. Recovery of Tax Erroneously or Illegally Collected. No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, of any sum alleged to have been excessively or in any manner wrongfully collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid." (Emphasis and underscoring, Ours.) Based on the foregoing provisions, a taxpayer-applicant must comply with the following requisites to successfully obtain a tax refund/credit for erroneously paid taxes from this Court: 1. There must be an erroneous or illegal collection of tax or penalty collected without authority, or sum excessively or wrongfully collected; 2. A prior administrative claim for refund had been filed before the CIR within two (2) years after the payment of tax or penalty; and 3. A suit or proceeding had been instituted before this Court within two (2) years from the date of payment of tax or penalty. It must be emphasized that cases filed before this Court are litigated de novo ; 62 parties are expected to litigate and prove every minute aspect of their case anew by presenting, formally offering, and submitting to the Court all evidence required for the successful prosecution of its claim. 63 Consequently, petitioner must competently establish its claim for refund or tax credit following the foregoing requisites. Petitioner timely filed both its administrative and judicial claims for refund. As the first requisite for claiming refund of erroneously paid taxes requires a lengthy discussion, this Court shall first determine whether petitioner complied with the second and third requisites. ETHIDa Excise tax on importation of goods are paid by the owner or importer before the release of such goods from the custody of the BOC. Section 131 (A) of the NIRC provides: "SEC. 131. Payment of Excise Taxes on Imported Articles. (A) Persons Liable. Excise taxes on imported articles shall be paid by the owner or importer to the Custom 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. xxx xxx xxx" (Emphasis, Ours.) On the other hand, the excise tax on locally manufactured products are paid by the manufacturer or producer before the removal of such products from the place of production. Section 130 (A) (2) of the NIRC provides, to wit: "SEC. 130. Filing of Return and Payment of Excise Tax on Domestic Products. (A) Persons Liable to File a Return, Filing of Return on Removal and Payment of Tax. xxx xxx xxx (2) Time for Filing of Return and Payment of the Tax. Unless otherwise specifically allowed, the return shall be filed and the excise tax paid by the manufacturer or producer before removal of domestic products from place of production : Provided, That the excise tax on locally manufactured petroleum products and indigenous petroleum levied under Sections 148 and 151(A)(4), respectively, of this Title shall be paid within ten (10) days from the date of removal of such products for the period from January 1, 1998 to June 30, 1998; within five (5) days from the date of removal of such products for the period from July 1, 1998 to December 31, 1998; and, before removal from the place of production of such products from January 1, 1999 and thereafter: Provided, further, That the excise tax on nonmetallic mineral or mineral products, or quarry resources shall be due and payable upon removal of such products from the locality where mined or extracted, but with respect to the excise tax on locally produced or extracted metallic mineral or mineral products, the person liable shall file a return and pay the tax within fifteen (15) days after the end of the calendar quarter when such products were removed subject to such conditions as may be prescribed by rules and regulations to be promulgated by the Secretary of Finance, upon recommendation of the Commissioner. For this purpose, the taxpayer shall file a bond in an amount which approximates the amount of excise tax due on the removals for the said quarter. The foregoing rules notwithstanding, for imported mineral or mineral products, whether metallic or nonmetallic, the excise tax due thereon shall be paid before their removal from customs custody." (Emphasis, Ours.) TIADCc In the case at bar, for petitioner's importation of Jet A-1 fuel, its payment of duties and taxes for its imported petroleum products are done through the BOC's e2m system and are supported by importation documents consisting of Statement of Settlement Duties and Taxes, Single Administrative Documents, 64 Bill of Lading ("BL"), Commercial Invoices, Customs Payment Receipts ("CPR"), BOC Certifications for Entry/Certificate of Payment ("BOC Certifications"), Authority to Release Imported Goods ("ATRIG"), and Reports of Survey, among others. 65 The payment is done before the petroleum products are allowed leave the BOC's custody. For the locally manufactured Jet A-1 fuel and unleaded gasoline fuel, petitioner uses two (2) modes for paying the excise tax due on each removal of said goods from the PBR. The first is through an application for payment made through the BIR's Electronic Filing and Payment System ("eFPS") as shown by the Excise Tax Returns or BIR Forms 2200-P ("ETR") with attached Summary of Removals. 66 The second is through the Product Replenishment Scheme as evidenced by Product Replenishment Certificates ("PRC"), Claims for Product Replenishment and Lists of Invoices. 67 In either case, the payment of the excise tax due on the locally manufactured Jet A-1 fuel is done before petroleum products are removed from the PBR. The subject period of the claim for the refund of excise tax pertaining to the importation of Jet A-1 fuel is from 23 December 2015 to 31 December 2016. During this period, the earliest importation made by petitioner of Jet A-1 fuel was on 24 December 2015. The excise tax due for this importation was paid on 23 December 2015. 68 From said date, petitioner had until 23 December 2017 within which to file its administrative and judicial claim for refund. Considering that petitioner filed its administrative claims for refund on 24 November 2017, 69 the administrative claim was timely filed. The same can similarly be said of the judicial claim, since the Petition for Review, docketed as CTA Case No. 9738, appealing the CIR's inaction on the administrative claim was filed on 20 December 2017. 70 On the other hand, the subject period of the claim for the refund of excise tax pertaining to the local production of Jet A-1 fuel and unleaded gasoline fuel is from 1 January 2016 to 31 December 2016. During this period, the earliest removal of locally manufactured Jet A-1 fuel and unleaded gasoline fuel from the PBR to petitioner's depots was on 1 January 2016. The earliest payment of excise tax subject of said claim for refund was also made on this date. 71 Consequently, for this claim for refund, petitioner had until 1 January 2018 within which to file both the administrative and judicial claim for refund. cSEDTC As petitioner filed its administrative claim for refund on 24 November 2017, 72 the same was timely filed. Likewise, when petitioner filed a Petition for Review, docketed as CTA Case No. 9741, on 22 December 2017 73 to appeal the CIR's inaction of such administrative claim, it timely filed its judicial claim for refund. Both administrative claims were filed ahead of their corresponding judicial claims. Given the foregoing, petitioner complied with the second and third requisites for claiming refund of erroneously paid taxes as provided above. Now, this Court shall tackle the issue of whether there was an erroneous payment of excise tax in the case at bar. This Court rules in the affirmative. Excise tax on imported and locally manufactured petroleum products is erroneously paid if the said products are sold to international carriers and tax-exempt entities. Section 135 of the NIRC provides, as follows: "SEC. 135. Petroleum Products Sold to International Carriers and Exempt Entities or Agencies. Petroleum products sold to the following are exempt from excise tax: (a) International carriers of Philippine or foreign registry on their use or consumption outside the Philippines: Provided, That the petroleum products sold to these international carriers shall be stored in a bonded storage tank and may be disposed of only in accordance with the rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner; (b) Exempt entities or agencies covered by tax treaties, conventions and other international agreements for their use of consumption: Provided, however, That the country of said foreign international carrier or exempt entities or agencies exempts from similar taxes petroleum products sold to Philippine carriers, entities or agencies; and (c) Entities which are by law exempt from direct and indirect taxes." The exemption from excise tax provided by this provision arises if a petroleum product is sold to: a) an international carrier; or b) an exempt entity pursuant to law, treaty, convention, or other international agreement, provided that the country of a foreign international carrier or exempt entity or agency similarly exempts Philippine international carriers, entities, or agencies from similar taxes for petroleum products sold to the latter. Further, this provision has been interpreted by the Supreme Court to extend in favor of manufacturers and importers of petroleum products if the same has been sold to international carriers and tax-exempt entities, as in Commissioner of Internal Revenue v. Pilipinas Shell Petroleum Corporation : 74 AIDSTE "Indeed, the avowed purpose of a tax exemption is always 'some public benefit or interest, which the law-making body considers sufficient to offset the monetary loss entailed in the grant of the exemption.' The exemption from excise tax of aviation fuel purchased by international carriers for consumption outside the Philippines fulfills a treaty obligation pursuant to which our Government supports the promotion and expansion of international travel through avoidance of multiple taxation and ensuring the viability and safety of international air travel. In recent years, developing economies such as ours focused more serious attention to significant gains for business and tourism sectors as well. Even without such recent incidental benefit, States had long accepted the need for international cooperation in maintaining a capital intensive, labor intensive and fuel intensive airline industry, and recognized the major role of international air transport in the development of international trade and travel. Under the basic international law principle of pacta sunt servanda , we have the duty to fulfill our treaty obligations in good faith. This entails harmonization of national legislation with treaty provisions. In this case, Sec. 135(a) of the NIRC embodies our compliance with our undertakings under the Chicago Convention and various bilateral air service agreements not to impose excise tax on aviation fuel purchased by international carriers from domestic manufacturers or suppliers. In our Decision in this case, we interpreted Section 135 (a) as prohibiting domestic manufacturer or producer to pass on to international carriers the excise tax it had paid on petroleum products upon their removal from the place of production, pursuant to Article 148 and pertinent BIR regulations. Ruling on respondent's claim for tax refund of such paid excise taxes on petroleum products sold to tax-exempt international carriers, we found no basis in the Tax Code and jurisprudence to grant the refund of an 'erroneously or illegally paid' tax. Justice Bersamin argues that '(T)he shifting of the tax burden by manufacturers-sellers is a business prerogative resulting from the collective impact of market forces,' and that it is 'erroneous to construe Section 135(a) only as a prohibition against the shifting by the manufacturers-sellers of petroleum products of the tax burden to international carriers, for such construction will deprive the manufacturers-sellers of their business prerogative to determine the prices at which they can sell their products.' We maintain that Section 135 (a), in fulfillment of international agreement and practice to exempt aviation fuel from excise tax and other impositions. prohibits the passing of the excise tax to international carriers who buys petroleum products from local manufacturers/sellers such as respondent. However, we agree that there is a need to reexamine the effect of denying the domestic manufacturers/sellers' claim for refund of the excise taxes they already paid on petroleum products sold to international carriers, and its serious implications on our Government's commitment to the goals and objectives of the Chicago Convention. SDAaTC The Chicago Convention, which established the legal framework for international civil aviation, did not deal comprehensively with tax matters. Article 24 (a) of the Convention simply provides that fuel and lubricating oils on board an aircraft of a Contracting State, on arrival in the territory of another Contracting State and retained on board on leaving the territory of that State, shall be exempt from customs duty, inspection fees or similar national or local duties and charges. Subsequently, the exemption of airlines from national taxes and customs duties on spare parts and fuel has become a standard element of bilateral air service agreements (ASAs) between individual countries. The importance of exemption from aviation fuel tax was underscored in the following observation made by a British author in a paper assessing the debate on using tax to control aviation emissions and the obstacles to introducing excise duty on aviation fuel, thus: Without any international agreement on taxing fuel, it is highly likely that moves to impose duty on international flights, either at a domestic or European level, would encourage 'tankering': carriers filling their aircraft as full as possible whenever they landed outside the EU to avoid paying tax. Clearly this would be entirely counterproductive. Aircraft would be travelling further than necessary to fill up in low-tax jurisdictions; in addition they would be burning up more fuel when carrying the extra weight of a full fuel tank. With the prospect of declining sales of aviation jet fuel sales to international carriers on account of major domestic oil companies' unwillingness to shoulder the burden of excise tax, or of petroleum products being sold to said carriers by local manufacturers or sellers at still high prices, the practice of 'tankering' would not be discouraged. This scenario does not augur well for the Philippines' growing economy and the booming tourism industry. Worse, our Government would be risking retaliatory action under several bilateral agreements with various countries. Evidently, construction of the tax exemption provision in question should give primary consideration to its broad implications on our commitment under international agreements. In view of the foregoing reasons, we find merit in respondent's motion for reconsideration. We therefore hold that respondent, as the statutory taxpayer who is directly liable to pay the excise tax on its petroleum products, is entitled to a refund or credit of the excise taxes it paid for petroleum products sold to international carriers, the latter having been granted exemption from the payment of said excise tax under Sec. 135 (a) of the NIRC ." (Emphasis and underscoring, Ours.) Additionally, in Chevron Philippines, Inc. v. Commissioner of Internal Revenue , 75 the Supreme Court ruled, to wit: AaCTcI "Excise tax on petroleum products is essentially a tax on property, the direct liability for which pertains to the statutory taxpayer ( i.e. , manufacturer, producer or importer). Any excise tax paid by the statutory taxpayer on petroleum products sold to any of the entities or agencies named in Section 135 of the National Internal Revenue Code (NIRC) exempt from excise tax is deemed illegal or erroneous, and should be credited or refunded to the payor pursuant to Section 204 of the NIRC. This is because the exemption granted under Section 135 of the NIRC must be construed in favor of the property itself, that is, the petroleum products. xxx xxx xxx Pilipinas Shell concerns the manufacturer's entitlement to refund or credit of the excise taxes paid on the petroleum products sold to international carriers exempt from excise taxes under Section 135(a) of the NIRC. However, the issue raised here is whether the importer ( i.e. , Chevron) was entitled to the refund or credit of the excise taxes it paid on petroleum products sold to CDC, a tax-exempt entity under Section 135(c) of the NIRC. Notwithstanding that the claims for refund or credit of excise taxes were premised on different subsections of Section 135 of the NIRC, the basic tax principle applicable was the same in both cases that excise tax is a tax on property; hence, the exemption from the excise tax expressly granted under Section 135 of the NIRC must be construed in favor of the petroleum products on which the excise tax was initially imposed. Accordingly, the excise taxes that Chevron paid on its importation of petroleum products subsequently sold to CDC were illegal and erroneous, and should be credited or refunded to Chevron in accordance with Section 204 of the NIRC. xxx xxx xxx Pursuant to Section 135(c), supra, petroleum products sold to entities that are by law exempt from direct and indirect taxes are exempt from excise tax. The phrase which are by law exempt from direct and indirect taxes describes the entities to whom the petroleum products must be sold in order to render the exemption operative. Section 135(c) should thus be construed as an exemption in favor of the petroleum products on which the excise tax was levied in the first place. The exemption cannot be granted to the buyers that is, the entities that are by law exempt from direct and indirect taxes because they are not under any legal duty to pay the excise tax. CDC was created to be the implementing and operating arm of the Bases Conversion and Development Authority to manage the Clark Special Economic Zone (CSEZ). As a duly-registered enterprise in the CSEZ, CDC has been exempt from paying direct and indirect taxes pursuant to Section 24 of Republic Act No. 7916 (The Special Economic Zone Act of 1995), in relation to Section 15 of Republic Act No. 9400 (Amending Republic Act No. 7227, otherwise known as the Bases Conversion Development Act of 1992). acEHCD Inasmuch as its liability for the payment of the excise taxes accrued immediately upon importation and prior to the removal of the petroleum products from the customshouse, Chevron was bound to pay, and actually paid such taxes. But the status of the petroleum products as exempt from the excise taxes would be confirmed only upon their sale to CDC in 2007 (or, for that matter, to any of the other entities or agencies listed in Section 135 of the NIRC). Before then, Chevron did not have any legal basis to claim the tax refund or the tax credit as to the petroleum products. Consequently, the payment of the excise taxes by Chevron upon its importation of petroleum products was deemed illegal and erroneous upon the sale of the petroleum products to CDC." (Emphasis, Ours.) Thus, for petitioner to successfully comply with the first requisite for claiming refund of erroneously paid excise tax under Section 135 of the NIRC , it must prove that it actually paid excise tax on petroleum products which it locally manufactured or imported and subsequently sold to international carriers or tax-exempt entities. Petitioner erroneously paid excise tax on its locally manufactured Jet A-1 fuel and unleaded gasoline fuel sold to international carriers and tax-exempt entities. A summary of the excise tax paid by petitioner on its locally manufactured Jet A-1 fuel and unleaded gasoline fuel sold to international carriers and tax-exempt entities, which is the subject matter of the present claim was provided in the consolidated ICPA Report, viz. : 76 Jet A-1 Fuel Unleaded Gasoline Fuel Month of Sale/ Delivery Volume (In Liters) Amount (Excise Tax Rate [P3.67] x Liters) Volume (In Liters) Amount (Excise Tax Rate [P4.35] x Liters) January 2016 859,804 P3,155,480.68 68,000 P295,800.00 February 2016 876,590 3,217,085.30 63,500 276,225.00 March 2016 751,502 2,758,012.34 90,570 393,979.50 April 2016 186,904 685,937.68 98,100 426,735.00 May 2016 3,389,788 12,440,521.96 54,300 236,205.00 June 2016 1,235,949 4,535,932.83 91,800 399,330.00 July 2016 29,313 107,578.71 46,300 201,405.00 August 2016 58,892 216,133.64 74,100 322,335.00 September 2016 18,706 68,651.02 76,000 330,600.00 October 2016 51,851 190,293.17 64,000 278,400.00 November 2016 82,678 303,428.26 62,100 270,135.00 December 2016 100,156 367,572.52 76,300 331,905.00 January 2017 52,116 191,265.72 - - February 2017 19,816 72,724.72 - - March 2017 14,703 53,960.01 - - Total 7,728,768 P28,364,578.56 (a) 865,070 P3,763,054.50 (b) ============= ============= ============== ============= ============= Total excise taxes paid (a) + (b) P32,127,633.06 ============= ============= ============== ============= ============= The excise taxes due on locally manufactured Jet A-1 and unleaded gasoline fuels sold to international carriers and tax-exempt entities for the period 1 January 2016 to 31 December 2016 were duly paid. To reiterate, petitioner employs two (2) modes of payment in settling the excise tax due from each removal of locally manufactured products from the PBR: a) through an application for payment made through the BIR's eFPS as shown by the ETR; 77 and b) through the Product Replenishment Scheme. 78 In either case, the payment of excise tax is made before removal of the petroleum products from the PBR. EcTCAD Based on the requirements of various depots, petitioner's Distribution Group ("DG") sends a summary of estimated daily volume of fuel product requirements for the following two (2) to five (5) days to the Refinery Accounting Section ("RAS"). Based on the DG's figures, petitioner's RAS then calculates the estimated excise tax payable for finished petroleum products for the next two (2) to five (5) days or for the same period, which is then forwarded to petitioner's Stock Accounting Section ("SAS"). These fuel products, which include the Jet A-1 fuel and the unleaded gasoline fuel, are then scheduled for removal within the next two (2) to five (5) days. 79 Based on the submitted estimated excise tax payable by the RAS, the SAS finalizes the amount of the excise tax due and provides an allowance in the computation of the excise tax due, which is normally around Five Million Pesos (Php5,000,000.00) per day. The SAS then files the application of payment of excise tax due through the eFPS in accordance with the actual product removals from the PBR. The SAS compares the submitted estimated computation versus the excess payments reported under "Balance Carried Over from Previous Return" ( i.e. , Item 17 of the ETR) in the ETR and ensures sufficiency of the excess payments to cover the estimated excise tax due per computation for the next two (2) to five (5) days. 80 In instances where the actual balance of excess payments reflected in the ETR is deemed insufficient to cover the amount of excise tax required to be maintained based on the computation made, petitioner, through its SAS, makes an advance deposit to the BIR through eFPS. 81 SDHTEC Petitioner also applies the Tax Subsidy Availment Certificate ("TSAC") 82 obtained from its sales to the Armed Forces of the Philippines Commissary and Exchange Service ("AFPCES") as payment of excise tax in lieu of cash. 83 With respect to the Product Replenishment Scheme, petitioner operates various depots which serve as storage of locally manufactured Jet A-1 fuel prior to sale and delivery to various customers. Some of these depots are registered as PRC locations, where majority of petitioner's sales and deliveries of locally manufactured Jet A-1 fuel are made to international air carriers. 84 If Jet A-1 fuel is sourced from locally manufactured stocks from PRC locations, where majority of its sales and deliveries of locally manufactured Jet A-1 fuel are made to international air carriers, petitioner utilizes its PRC/BIR Form No. 2298, which is being amortized as payment through the Product Replenishment Debit Memo ("PRDM")/BIR Form No. 2331 as tax credits for payment of excise tax due on the removals of locally manufactured Jet A-1 fuel which are to be sold to international air carriers. 85 As examined by the ICPA and as thoroughly verified by this Court, petitioner reported and paid the corresponding excise taxes on the removals from the PBR based on the ETRs, which include the subject matter of the instant claim, 86 as follows: Particulars Jet A-1 Fuel Unleaded Gasoline Fuel Total Total volume of removals per Withdrawal Certificate ("WC") (Kilo Liters ("KL") at air) 187,075,340 70,655,918 Multiply by: Equivalent Excise Tax Rate per Liter 3.67 4.35 Amount of Excise Tax that should have been paid P686,566,497.80 P307,353,243.30 P993,919,741.10 ============ ============ Actual amount of excise tax due and paid on PBR removals 3,502,102,821.83 Difference (P2,508,183,080.73) ====================================== ============ ============ ============== The difference is accounted for as follows: 87 HSAcaE Particulars Volume in Liters Equivalent Excise Tax Remarks 1. Removals of Jet A-1 fuel paid thru PRDM/PRC (marked as Exhibit No. P-257) 177,311,211 650,732,144.37 No effect on the claim. 2. Payment of excise tax on unleaded gasoline fuel not related to the claim (724,698,534) (3,152,438,622.90) No effect on the claim. 3. Payment of excise tax on other excisable petroleum products (170,579,752) (6,476,602.20) No effect on the claim. (717,967,075) (P2,508,183,080.73) ================================== ========== ============== ================ This proves that the excise taxes due on locally manufactured Jet A-1 and unleaded gasoline fuels sold to international carriers and tax-exempt entities for the period 1 January 2016 to 31 December 2016 were duly paid. The volumes and amount of locally manufactured Jet A-1 fuel and unleaded gasoline fuel manufactured and removed from the PBR to petitioner's depots then subsequently transferred to another depot, into-plane facilities ("ITPs"), and refuellers are accurate and properly supported. From the PBR, the locally manufactured Jet A-1 fuel and the unleaded gasoline fuel are then transferred to petitioner's depots spread across the Philippines. The same is transferred from said depots to other depots, ITPs, and refuellers prior to the fuel being delivered and sold to end customers. 88 An ITP, to clarify, is a storage facility owned by petitioner from which petroleum products are withdrawn, while a refueller is a third party contractor engaged by petitioner owning refuelling trucks with a dispensing system for the delivery of petroleum products to customers. 89 The ICPA's thorough tracing, as verified by this Court, shows that the locally manufactured Jet A-1 fuel removed from the PBR tallies with the volume received by the respective depots: 90 Depots Exhibit No. Per WC Per Depot's Liquidation Statement ("LS") Receipts Per Depots' Official Register Books ("ORB") Withdrawals from PBR Gross Volume Received In-transit Gain (Loss) Net Volume to be Received (a) Exhibit No. Volume Received by Depots (b) Difference (a) (b) SL Harbor P-271 141,506,110 141,506,110 (305,539) 141,200,571 P-278 141,200,571 - Navotas P-272 1,440,301 1,440,301 (3,661) 1,436,640 P-279 1,436,640 - Palawan P-273 2,910,702 2,910,702 8,127 2,918,829 P-280 2,918,829 - Mactan P-274 28,045,341 28,045,341 89,588 28,134,929 P-281 28,134,929 - Iloilo P-275 7,788,149 7,788,149 (284,668) 7,503,481 P-282 7,503,481 - Davao P-276 2,393,997 2,393,997 (17,686) 2,376,311 P-283 2,376,311 - Zamboanga P-277 2,790,740 2,790,740 (18,441) 2,772,299 P-284 2,772,299 - DMIA/Clark P-380 200,000 - - - P-380 200,000 (200,000) Total 187,075,340 186,875,340 (532,280) 186,343,060 186,543,060 (200,000) Similarly, the locally manufactured unleaded base gasoline fuel removed from the PBR tallies with the volume received by the respective depots, viz. : 91 AScHCD Per WC Per Schedule of Receipts and Removals ("SRR") Per SAP-Product Movements by Movement Type ("PMMT") Difference Depot Exhibit No. Withdrawals from PBR (a) Gross Volume Received (b) In-transit Gain (Loss) (c) Net Volume to be Received (d) = (b + c) Volume Received (e) (f) = (a b) (g) = (d e) SL Harbor Depot Unleaded (Base) Gasoline Fuel P-366 46,421,637 46,421,637 (108,724) 46,312,833 46,312,833 - - Unleaded (Blaze) Gasoline Fuel P-367 24,234,281 24,234,281 (99,654) 24,134,627 24,134,627 - - Total 70,655,918 70,655,918 (208,378) 70,447,460 70,447,460 - - As duly noted by the ICPA, the "in-transit gain or loss" pertains to the effect of the variations of the volume of locally-manufactured petroleum products (such as Jet A-1 fuel and Unleaded Gasoline fuel) due to several factors such as temperature, density of the product at the time of soundings, sea condition (for vessel figures), equipment used for the measurements, and others. 92 To reiterate, the petroleum products received by the depots from the PBR is then be transferred further to other depots, ITPs, and refuellers of petitioner. Locally manufactured Jet A-1 fuel undergoes this procedure before its eventual sale and delivery to international carriers and tax-exempt entities. On the other hand, the unleaded gasoline fuel volume received by SL Harbor depot from PBR is delivered directly to customers, including tax-exempt entities. 93 To determine the actual movements for locally manufactured Jet A-1 fuel, the ICPA reviewed the relevant ORBs, LSs, and SAP-PMMTs from the depots, ITPs, and refuellers. As duly verified by this Court, the results of the comparison revealed the following: 94 Comparison of depots LS Issuances with ORB Issuances Jet A-1 fuel: Depots Exhibit No. Per Depot LS Issuances (Volume in Liters) Per ORB Issuances (Volume in Liters) Subject to Claim Not Subject to Claim Total Related to Claim Not Related to Claim SL Harbor P-292 140,155,743 1,044,828 141,200,571 141,200,571 71,365,243 Navotas P-293 1,436,640 - 1,436,640 1,436,640 2,603,360 Palawan P-294 280,910 2,637,919 2,918,829 2,918,829 52,456 Mactan P-295 22,214,913 5,920,016 28,134,929 28,134,929 2,140,840 Iloilo P-296 7,255,150 248,331 7,503,481 7,503,481 1,066,519 Davao P-297 2,157,074 219,237 2,376,311 2,376,311 277,689 Zamboanga P-298 910,000 1,862,299 2,772,299 2,772,299 21,222 DMIA/Clark P-381 166,949 32,961 200,000 200,000 - Total 174,577,379 11,965,591 186,543,060 186,543,060 77,527,329 Comparison of depots LS Issuances with SAP-PMMT-Issuances and depot/ITP/Refueller LS-Receipts (Volume in Liters)-Jet A-1 fuel: Total Issuances Depots to Depots/ITPs/Refueller Exhibit No. Per Depot LS Issuances Subject to Claim Exhibit No. Per SAP PMMT Issuances Related to Claim Details of Issuances per LS and SAP-PMMT Per Depots/ITPs/ Refueller LS Receipts Direct Delivery to Customers Not Related to Claim SL Harbor depot to: Laoag ITP P-299 456,000 456,000 456,000 - JOCASP/NAIA depot P-300 139,699,743 139,699,743 135,575,342 - 140,155,743 P-262 140,155,743 136,031,342 - 4,124,401 Navotas to JOCASP/NAIA depot P-301 1,436,640 P-263 1,436,640 1,436,640 - - Palawan depot to Customers P-348 280,910 P-264 280,910 - 280,910 - Mactan depot to Customers P-349 22,214,913 P-265 22,214,913 - 22,214,913 - Iloilo depot to: Iloilo ITP P-302 580,000 580,000 580,000 - Kalibo ITP P-303 6,655,150 6,655,150 6,655,150 - Bacolod ITP P-304 20,000 20,000 20,000 - 7,255,150 P-266 7,255,150 7,255,150 - - (Forwarded) (Brought forward) Davao depot to Davao ITP P-305 2,157,074 P-267 2,157,074 2,157,074 - - Zamboanga depot to Zamboanga refueller P-306 910,000 P-268 910,000 910,000 - - DMIA/Clark depot to Customers P-381 166,949 P-379 166,949 - 166,949 - 174,577,379 174,577,379 147,790,206 22,662,772 4,124,401 The volumes which are not related to the claim pertain either to other shipments of locally produced Jet A-1 fuel that were not claimed by petitioner or to imported Jet A-1 fuel that was recorded in the PMMT. 95 HESIcT For the movements of locally manufactured unleaded gasoline fuel, the ICPA reviewed the relevant ORBs, SRRs, and SAP-PMMTs from SL Harbor depot. As duly verified by this Court, the result of such comparison revealed the following: 96 Comparison of Depot's PMMT with SRR and ORBs R92 Base Gasoline, R88 Gasoline and R87 Gasoline: Removals (Direct Deliveries) Volume (in Liters) Per PMMT Per SRR (Exhibit Nos. P-366 and P-366-1 to P-366-12) Per ORB (Exhibit Nos. P-368 and P-368-1 to P-368-12) Difference Exhibit No. Volume E-98 (Fuel Bioethanol) Unleaded (Base) Gasoline Without E-98 E-10 (Unleaded Gasoline Fuel-Finished Goods) R92 P-361 630,000 630,000 70,000 630,000 700,000 - R88 P-362 3,600 3,600 400 3,600 4,000 - R87 P-363 5,400 5,400 600 5,400 6,000 - Total 639,000 639,000 71,000 639,000 710,000 - Comparison of Depot's PMMT with SRR and ORBs Blaze 100 Euro: Removals Volume (in Liters) Per PMMT Per SRR (Exhibit Nos. P-367 and P-367-1 to P-367-12) Per ORB (Exhibit Nos. P-369 and P-369-1 to P-369-12) Difference Exhibit No. Volume X100 P-364 170,000 170,000 170,000 - D210 X100 P-365 56,070 56,070 56,070 - Total 226,070 226,070 226,070 - This proves that the volumes and amounts of locally manufactured Jet A-1 fuel and unleaded gasoline fuel manufactured and removed from the PBR to petitioner's depots then subsequently transferred to other depots, ITPs, and refuellers are accurate and property supported except for the variances noted, which are summarized at the end of this Decision. AcICHD The locally manufactured Jet A-1 fuel and unleaded gasoline fuel manufactured were sold and delivered to various air carriers of Philippine or foreign registry for the latter's use or consumption outside the Philippines and to alleged tax- exempt entities. As observed by the ICPA and verified by this Court, for the sales of locally manufactured Jet A-1 fuel to international carriers and tax-exempt entities, petitioner prepares and generates the sales invoices ("SIs") in its SAP-Computerized Accounting System, in accordance with the commercial terms and orders stated in the respective contracts executed between petitioner and the airline companies and the tax-exempt entities. 97 All SIs involving sales of locally manufactured tax-paid Jet A-1 fuel to international air carriers, on their use or consumption outside the Philippines, and tax-exempt entities and sales of locally manufactured unleaded gasoline fuel to tax-exempt entities, shall carry a "No Excise Tax Billed" notation, while an invoice involving the sale of locally manufactured tax-paid Jet A-1 fuel to air carriers for domestic flights does not carry such notation. The summary of Aviation Delivery Receipts ("ADRs") and SAP-generated Delivery Notes ("DN") covering the period billable to the airline companies and tax-exempt entities form an integral part of the SI as proof that the volumes of locally manufactured Jet A-1 fuel and unleaded gasoline fuel were delivered to the international air carriers and tax-exempt entities, and the volumes of locally manufactured unleaded gasoline fuel were delivered to tax-exempt entities. 98 For the JOCASP/NAIA depot, the DN generated by the SAP pertaining to the sale of locally manufactured Jet A-1 fuel by the JOCASP/NAIA depot to tax-exempt entities triggers the creation of the SI for such direct deliveries. 99 caITAC Further, petitioner schedules deliveries of locally manufactured Jet A-1 fuel to air carriers based on its agreements with the respective airline companies and tax-exempt entities. Petitioner's representative prepares the ADR during the discharge of the locally manufactured Jet A-1 fuel from the tank trucks to the air carrier and tax-exempt entities. The ADR is then signed by the airline and tax-exempt representative to certify that the volume and correct grade of fuel has been delivered. The ADR also specifies the flight number, origin, and destination of the air carrier. 100 Moreover, petitioner prepares the LS indicating the disposition of the Jet A-1 fuel received. The LS shows the source of the Jet A-1 fuel, whether it was sourced from importations or local production, and the actual locations where the Jet A-1 fuel were delivered, either international or domestic deliveries or to tax-exempt entities. The international deliveries pertain to Jet A-1 fuel that will be delivered to air carriers flying international flights ( i.e. , whether the air carrier is of Philippine registry or of foreign registry), while domestic deliveries pertain to Jet A-1 fuel that will be delivered to air carriers flying domestic flights. 101 A review of the LS showed the following: 102 LS Movements Receipts and Issuances (Volume in Liters) Jet A-1 Fuel: Exhibit No. Depots/ITPs/Refueller Exhibit No. Per LS Receipts Per LS Issuances For Depots/ ITPs/ Refuellers For Direct Delivery to Customers Total Related to Claim Not Related to Claim Total P-308 Laoag ITP P-299-1 to P-299-24 456,000 - 456,000 289,401 166,599 456,000 P-309 JOCASP/NAIA Depot P-300-1 to P-300-91 135,575,342 - 135,575,342 113,840,078 21,735,264 135,575,342 P-310 JOCASP/NAIA Depot P-301-1 1,436,640 - 1,436,640 531,451 905,189 1,436,640 P-287 Palawan Depot P-273-1 to P-273-6 - 2,918,829 2,918,829 280,910 2,637,919 2,918,829 P-288 Mactan Depot P-274-1 to P-274-16 - 28,134,929 28,134,929 22,214,913 5,920,016 28,134,929 P-311 Iloilo ITP P-302-1 to P-302-7 580,000 - 580,000 353,830 226,170 580,000 P-312 Kalibo ITP P-303-1 to P-303-7 6,655,150 - 6,655,150 6,147,644 507,506 6,655,150 P-313 Bacolod ITP P-304-1 20,000 - 20,000 754 19,246 20,000 P-314 Davao ITP P-305-1 to P-305-2 2,157,074 - 2,157,074 482,009 1,675,065 2,157,074 P-315 Zamboanga Refueller P-306-1 to P-306-3 910,000 - 910,000 168,079 741,921 910,000 P-381 DMIA/Clark Depot P-380-1 - - - 5,521 161,428 166,949 Total 147,790,206 31,053,758 178,843,964 144,314,590 34,696,323 179,010,913 On the other hand, a comparison of the LS and the ADR of the depots, ITPs and refuellers revealed the following: 103 TAIaHE Comparison of depots, ITPs and Refueller's LS Issuances vs. ADR (Volume in Liters) Jet A-1 Fuel: Exhibit No. Point of Sale Per Depots/ITPs/ Refueller LS Issuances Deliveries of Locally Manufactured Jet A-1 Fuel Through LS Not Related to Claim Per ADR (Related to Claim) Sold to International Air Carriers with International Destination/ Sold to Tax-Exempt Entities Sold to International Air Carriers with Local Destination Sold to International Air Carriers from Out-of-Period Claim Total P-317 Laoag ITP 289,401 - 289,401 - 4,838 294,239 P-318 JOCASP/NAIA Depot 113,840,078 110,144,118 3,674,980 20,980 107,427 113,947,505 P-319 JOCASP/NAIA Depot 531,451 - 531,451 - - 531,451 P-320 Palawan Depot 280,910 89,847 191,063 - - 280,910 P-321 Mactan Depot 22,214,913 19,625,945 2,524,919 64,049 87,677 22,302,590 P-322 Iloilo ITP 353,830 334,806 19,024 - - 353,830 P-323 Kalibo ITP 6,147,644 6,123,780 19,559 4,305 - 6,147,644 P-324 Bacolod ITP 754 - 754 - - 754 P-325 Davao ITP 482,009 467,268 14,741 - - 482,009 P-326 Zamboanga Refueller 168,079 - 168,079 - - 168,079 P-382 DMIA/Clark Depot 5,521 - - 5,521 - 5,521 Total 144,314,590 136,785,764 7,433,971 94,855 199,942 144,514,532 Sales/Deliveries to International Air Carriers with Local Destinations and Out-of-Period Liftings from the Year 2015 Jet A-1 Fuel: Item Exhibit No. Point of Sale Volume in Liters Equivalent Excise Tax at P3.67 per Liter Sales/Deliveries to International Air Carriers with Local Destination: P-318 JOCASP/NAIA Depot 20,980 P76,996.60 P-321 Mactan Depot 64,049 235,059.83 P-323 Kalibo Depot 4,305 15,799.35 P-382 DMIA/Clark Depot 5,521 20,262.07 Table 12 94,855 348,117.85 Out-of-Period Liftings from the Year 2015: P-317 Laoag ITP 4,838 17,755.46 P-318 JOCASP/NAIA Depot 107,427 394,257.09 P-321 Mactan Depot 87,677 321,774.59 Table 3/13 199,942 733,787.14 Total downward adjustments 294,797 P1,081,904.99 For the sales of locally manufactured unleaded gasoline fuel delivered directly by the SL Harbor depot, the ICPA traced the deliveries of the same to tax-exempt entities using the supporting ORBs, SRRs, and DNs, as follows: ICHDca ORB Issuances vs. DN (Volume in Liters) Unleaded Gasoline Fuel: Exhibit No. Particulars Exhibit Nos. Per ORB Exhibit Nos. Per DN Difference P-372 Unleaded (Base) Gasoline Fuel P-370-1 to P-370-12 710,000 P-372-1 to P-372-12 710,000 - P-373 Unleaded (Blaze) Gasoline Fuel P-371-1 to P-371-12 226,070 P-372-1 to P-372-12 226,070 - Total 936,070 936,070 - From the foregoing, locally manufactured Jet A-1 fuel and unleaded gasoline fuel manufactured were sold and delivered to various air carriers of Philippine or foreign registry for the latter's use or consumption outside the Philippines and to alleged tax-exempt entities except for certain variances noted by the ICPA, which are summarized at the end of this Decision. The locally manufactured petroleum products were billed and collected net of excise tax. The deliveries of locally manufactured Jet A-1 fuel and unleaded gasoline fuel were billed and collected without any excise tax. In arriving at this conclusion, this Court compared the details per ADRs or DNs of the depots, ITPs, and refueller to the corresponding SIs billed to airline companies. The details of the SIs were then traced to the pricing conditions in petitioner's SAP. The tracing resulted in the following: 104 Depot/ITPs/Refueller Exhibit Nos. ADRs SIs SAP-Pricing Conditions Laoag ITP P-317-1 to P-317-74 P-327-1 to P-327-74 P-327-75 to P-327-148 JOCASP/NAIA (SL Harbor) Depot P-318-1 to P-318-199 P-328-1 to P-328-44 P-328-45 to P-328-88 JOCASP/NAIA (Navotas) Depot P-319-1 to P-319-42 P-329-1 to P-329-5 P-329-6 to P-329-10 Palawan ITP P-320-1 to P-320-60 P-330-1 to P-330-60 P-330-61 to P-330-120 Mactan ITP P-321-1 to P-321-207 P-331-1 to P-331-44 P-331-45 to P-331-88 Iloilo ITP P-322-1 to P-322-2 P-332-1 to P-332-2 P-332-3 to P-332-4 Kalibo ITP P-323-1 to P-323-5 P-333-1 to P-333-2 P-333-3 to P-333-4 Bacolod ITP P-324-1 to P-324-2 P-334-1 P-334-2 Davao ITP P-325-1 to P-325-3 P-335-1 to P-335-3 P-335-4 to P-335-6 Zamboanga Refueller P-326-1 to P-326-88 P-336-1 to P-336-88 P-336-89 to P-336-176 DMIA/Clark Depot* P-382-1 - - This Court then found that petitioner's SIs show the volume in liters, while the invoice amount is in US dollars (USD) for Jet A-1 fuel and Philippine peso (PHP) for unleaded gasoline fuel. The volume of locally manufactured Jet A-1 fuel in liters is converted into US barrels multiplied by the contract price per US barrel to arrive at the billable amount in US dollars. 105 cDHAES Furthermore, the face of the SIs for locally manufactured Jet A-1 fuel and unleaded gasoline fuel bears the note "No excise tax billed." Thus, petitioner's SIs tied up with the SAP pricing condition where no excise tax was charged to international carriers and tax-exempt entities are as follows: 106 ADR vs. SI Jet A-1 Fuel: Exhibit No. Point of Sale ADR SI Exhibit Nos. Volume (In Liters) Equivalent USD Amount Exhibit Nos. Volume (In Liters) Related to Claim Not Related to Claim Total P-327 Laoag ITP P-317-1 to P-317-74 289,401 P-327-1 to P-327-74 289,401 10,003 299,404 US$171,204.13 P-328 JOCASP/NAIA Depot P-318-1 to P-318-199 3,674,980 P-328-1 to P-328-44 3,674,980 28,293,163 31,968,143 11,844,965.10 P-329 JOCASP/NAIA Depot P-319-1 to P-319-42 531,451 P-329-1 to P-329-5 531,451 4,682,022 5,213,473 1,891,680.11 P-330 Palawan Depot P-320-1 to P-320-60 191,063 P-330-1 to P-330-60 191,063 - 191,063 68,573.42 P-331 Mactan Depot P-321-1 to P-321-207 2,524,919 P-331-1 to P-331-44 2,524,919 7,679,666 10,204,585 4,450,984.66 P-332 Iloilo ITP P-322-1 to P-322-2 19,024 P-332-1 to P-332-2 19,024 - 19,024 12,532.10 P-333 Kalibo ITP P-323-1 to P-323-5 19,559 P-333-1 to P-333-5 19,559 - 19,559 10,147.66 P-334 Bacolod ITP P-324-1 to P-324-2 754 P-334-1 754 12,592 13,346 6,637.02 P-335 Davao ITP P-325-1 to P-325-3 14,741 P-335-1 to P-335-3 14,741 - 14,741 7,243.09 P-336 Zamboanga Refueller P-326-1 to P-326-88 168,079 P-336-1 to P-336-88 168,079 - 168,079 66,560.76 Total 7,433,971 7,433,971 40,677,446 48,111,417 US$18,530,528.05 DN vs. SI Unleaded Gasoline Fuel: Exhibit No. Particulars DN SI Exhibit No. Volume (in Liters) Exhibit No. Volume (In Liters) Equivalent PHP Amount P-374 Base Gasoline P-372-1 to P-372-41 710,000 P-374-1 to P-374-41 710,000 P24,478,187.60 P-375 Blaze Gasoline P-373-1 to P-373-34 226,070 P-375-1 to P-375-34 226,070 7,468,324.25 Total 936,070 936,070 P31,946,511.95 SI vs. SAP Pricing Condition Jet A-1 Fuel: Exhibit No. Point of Sale SI SAP Pricing Condition Exhibit No. USD Amount Exhibit No. US$ Amount Duty Rate* Total USD Amount Equivalent PHP Amount P-327 Laoag ITP P-327-1 to P-327-74 171,204.13 P-327-75 to P-327-148 171,204.13 US$- US$171,204.13 P8,174,444.05 P-328 JOCASP/NAIA Depot P-328-1 to P-328-44 11,844,965.10 P-328-45 to P-328-88 11,844,965.10 - 11,844,965.10 549,664,737.42 P-329 JOCASP/NAIA Depot P-329-1 to P-329-5 1,891,680.11 P-329-6 to P-329-10 1,891,680.11 - 1,891,680.11 87,635,864.45 P-330 Palawan Depot P-330-1 to P-330-60 68,573.42 P-330-61 to P-330-120 68,573.42 - 68,573.42 3,206,499.47 P-331 Mactan Depot P-331-1 to P-331-44 4,450,984.66 P-331-45 to P-331-88 4,450,984.66 - 4,450,984.66 207,729,010.25 P-332 Iloilo ITP P-332-1 to P-332-2 12,532.10 P-332-3 to P-332-4 12,532.10 - 12,532.10 588,626.44 P-333 Kalibo ITP P-333-1 to P-333-5 10,147.66 P-333-6 to P-333-10 10,147.66 - 10,147.66 485,748.34 P-334 Bacolod ITP P-334-1 6,637.02 P-334-2 6,637.02 - 6,637.02 315,517.29 P-335 Davao ITP P-335-1 to P-335-3 7,243.09 P-335-4 to P-335-6 7,243.09 - 7,243.09 350,286.02 P-336 Zamboanga Refueller P-336-1 to P-336-88 66,560.76 P-336-89 to P-336-176 66,560.76 - 66,560.76 3,237,241.39 Total 18,530,528.05 18,530,528.05 US$- US$18,530,528.05 P861,387,975.12 * Duty rate pertains to excise tax billed to customers. SI vs. SAP Pricing Condition Unleaded Gasoline Fuel Exhibit No. Particulars SI SAP Pricing Condition Exhibit No. PHP Amount Exhibit No. PHP Amount Duty Rate* Total PHP Amount P-374 Unleaded (Base) Gasoline Fuel P-374-1 to P-374-41 P24,478,187.60 P-374-42 to P-374-82 P24,478,187.60 P- P24,478,187.60 P-375 Unleaded (Blaze) Gasoline Fuel P-375-1 to P-375-34 7,468,324.25 P-375-35 to P-375-68 7,468,324.25 - 7,468,324.25 Total P31,946,511.85 P31,946,511.85 P- P31,946,511.85 * Duty rate pertains to excise tax billed to customers. Collections of SAP-generated SIs are made through inward remittances by petitioner's customers. An inward remittance of a customer normally covers payment of several invoices. However, the airline company and tax-exempt entities do not provide details of the invoices against which the collection would be applied. As such, petitioner applies the collection on the outstanding invoices on a first-in, first-out basis. 107 TCAScE The amount of collections as per SAP clearing, inward remittances/bank advices, Official Receipts ("ORs"), and bank certifications reconciles with the amount billed to international carriers and tax-exempt entities. This proves that petitioner has not collected any excise tax from its customers, as shown below: 108 SI vs. SAP Clearing and Inward Remittance/Bank Certification/OR Jet A-1 Fuel: Particulars Exhibit No. Amount (in USD) Amount (in PHP) Per SI: P-327 to P-336 US$18,530,528.05 P861,387,975.12 Per Books ("General Ledger") ("GL"): Per SAP Clearing P-347-1 to P-347-112 US$18,530,528.05 P861,387,975.12 Per Collection documents: Inward Remittance/ Bank Certifications P-347-113 to P-347-227 12,003,208.57 558,728,005.60 Official Receipts P-347-228 to P-347-246 6,527,319.48 302,659,969.52 US$18,530,528.05 P861,387,975.12 SI vs. SAP Clearing and Inward Remittance/Bank Certification/OR Unleaded Gasoline Fuel: Particulars Exhibit No. Amount (in PHP) Per SI: P-374 to P-375 P31,946,511.85 Per Books (GL): Per SAP Clearing P-378-1 to P-378-22 P31,946,511.85 Per Collection documents: Per Official Receipts P-378-23 to P-378-53 P31,946,511.85 Petitioner erroneously paid excise tax on its imported Jet A-1 fuel sold to international carriers and tax- exempt entities. Importations of Jet A-1 fuel were made during the period 23 December 2015 to 31 December 2016. Petitioner imported Jet-A-1 fuels, as evidenced by a Import Entry and Internal Revenue Declaration ("IEIRD"), 109 and submitted a Loadport Survey Report ("LSR") 110 to the BOC within the period from 23 December 2015 to 31 December 2016. Petitioner paid the initial taxes and duties based on a tentative liquidation at the time of arrival. The tentative liquidation for purposes of paying the said taxes and duties is based on the product and quantity reported in the BL 111 and the estimated price of the commodity at the time of payment. 112 The paid taxes and duties are supported by CPR, 113 which is acknowledged and signed by the head of the BOC office in the Port of Limay. 114 After payment of taxes and duties based on the tentative liquidation, the Jet A-1 fuel was released from the BOC's custody and delivered for storage at the PBR. 115 ASEcHI After release from the BOC, petitioner hired an independent surveyor to determine the volume of imported Jet A-1 fuels on board the vessel, which was compared with the volume of imported Jet A-1 fuels received and stored at the storage tanks in the PBR. The surveyor's Certificate of Independent Survey ("CIS") 116 certifies the completion of the arrival of the vessel carrying the imported Jet A-1 fuels at Limay, Bataan and the discharge or withdrawals of said fuels from the vessel to the PBR's storage tanks. 117 Volumes varied depending on when the fuel was gauged are indicated in the CIS. Petitioner explained that the variations of volumes from the BL versus the actual volume per CIS are due to several factors such as temperature, density of the product at the time of soundings, sea condition (for cargo vessel's figures), equipment used for the measurements, and others. The volume per CIS as the actual volume of imported Jet A-1 fuels was used as the basis for recording in the petitioner's PBR-Official Register Book (PBR-ORB) 118 signed by the Revenue Officer on Premise (ROOP) and in the GL 119 of the petitioner's SAP-Computerized Accounting System (SAP) and in computing the final tax assessments by the BOC. 120 cTDaEH As soon as the price has been finalized and the vendor's Commercial Invoice ("CI") 121 becomes available, petitioner files an application for ATRIG 122 with the BIR. 123 When the BL, CI, ATRIG, CIS, and marine risk insurance policy are available, petitioner submits these to the BOC for final assessment. 124 Due to various factors affecting the volume of the imported Jet A-1 fuels, the actual volume of imported Jet A-1 fuels per CIS may be higher or lower than the volume per the BL that was used for the tentative liquidation and the initial payment of taxes and duties. For instances when the actual volume of imported Jet A-1 fuels per CIS is higher than the volume per BL, petitioner pays the additional duties and taxes as supported by the CPR, 125 which is acknowledged and signed by the head of BOC's office in Port of Limay. 126 After the date of final payment, petitioner requests for the BOC Certification 127 to summarize all payments made to the BOC in relation to the importation. 128 On the other hand, where the volume per the CIS is lower than the volume per the BL, petitioner absorbed the equivalent losses for the overpaid taxes because this will not be reflected in the IEIRD nor refunded by the BOC to the petitioner. 129 After release from the BOC, the imported Jet A-1 fuels at the PBR are stored and commingled with locally manufactured Jet A-1 fuels as allowed by the Commingling Permit Nos. ELTRD (P)-028-01-15-12537 130 and ELTRD (P)-028-01-16-15847 131 which are valid from 1 January 2015 until 31 December 2015 and 1 January 2016 until 31 December 2016, respectively. 132 The movement of imported Jet A-1 fuels is documented by a Cargo Intake Certificate ("CIC"), 133 which is based on the volume shown in the CIS as KL at air. 134 The CIC is a SAP-generated internal control document prepared at the PBR and supports the recording of the transaction in the PBR-ORB and in the GL. Per the ICPA Report, petitioner's importations for the period 23 December 23, 2015 n to 31 December 2016 are as follows: ITAaHc Summary of Importations for the period 23 December 2015 to 31 December 2016: Vessel Name Importation 1 / Arrival Date 2 Date of Payment Volume (In Liters) Amount of Excise Tax Paid Intan Glory December 24-27, 2015 December 23, 2015 3 and March 30, 2016 4 12,265,200 45,013,284.00 Maluku Palm December 29, 2015 to January 1, 2016 December 29, 2015 3 and March 7, 2016 4 12,826,889 47,074,682.63 Ocean Lynx January 15-17, 2016 January 14, 2016 3 and May 23, 2016 4 10,827,974 39,738,664.58 Songa Diamond February 8-11, 2016 February 10, 2016 3 and May 30, 2016 4 13,228,124 48,547,215.08 Everhard Schulte April 2-4, 2016 April 1, 2016 3 and June 30, 2016 4 18,533,294 68,017,188.98 Ardmore Capella April 9-13, 2016 April 8, 2016 3 and July 25, 2016 4 12,818,819 47,045,065.73 Rio Daytona April 22-24, 2016 April 21, 2016 3 and July 25, 2016 4 12,738,576 46,750,573.92 Aulac Diamond April 28-30, 2016 May 16, 2016 3 and July 25, 2016 4 12,197,188 44,763,679.96 Aulac Diamond May 7-9, 2016 May 16, 2016 3 and September 20, 2016 4 12,462,699 45,738,105.33 Aulac Jupiter May 9-12, 2016 May 16, 2016 3 and September 7, 2016 4 12,874,308 47,248,710.36 Total 130,773,071 P479,937,170.57 1 We noted that there were no importations from May 13, 2016 up to December 31, 2016. 2 Arrival date is considered the last day when the imported Jet A-1 fuel were fully discharged from the vessel to the Petitioner's storage tanks in Bataan Refinery (PBR). 3 Date when the duties and taxes have been paid based on tentative liquidation. 4 Date when the duties and taxes have been paid based on final assessment. Upon tracing the Petitioner's importations with the vendors' CIs 135 and the related BLs 136 for the period from 23 December 2015 to 31 December 2016, it was verified that the total volume of the ten (10) importations per the vendors' CIs ties up with the total volume per BLs as follows: 137 CIs vs BLs: Particulars Volume (In Barrels) Per CIs 815,180.000 Per BLs 815,180.000 Difference - This shows that importations of Jet A-1 fuel were indeed made during the period 23 December 2015 to 31 December 2016. Petitioner paid the corresponding excise tax on the importation of Jet A-1 fuel. Upon tracing the details of the vendor's CIs 138 to the corresponding IEIRDs, 139 CPRs, 140 BOC Certifications, 141 BIR ATRIG, 142 and CIS, 143 the ICPA verified that petitioner reported and paid the corresponding duties and taxes on these importations, with a total volume of 130,773,071 liters, and corresponding excise tax of Php481,164,216.00, as shown in the Summary of Comparison of CIs with IEIRDs, CPRs, BOC Certifications, BIR ATRIG and CIS for the period from December 2015 to September 2016, 144 summarized as follows: cSaATC CIs vs. IEIRD, CPR, BOC Certifications, ATRIG and CIS: Particulars Amounts Total volume per CIS 815,180.000 Barrels (KL at air) 130,773,071 Multiply by: Equivalent liters per KL 1,000 Total volume per CIS (liters at air) 130,773,071 Multiply by: Equivalent excise tax per liter P3.67 Amount of excise tax that should have been paid P479,937,170.57 Actual amount of excise tax paid 481,164,216.00 Difference representing overpayment (P1,227,045.43) Petitioner explained that the overpayment pertains to the net effect of the movement in volume of the imported Jet A-1 fuels. There are instances where the volume of imported Jet A-1 fuels per CIS is lower than the volume per BL resulting to a loss, representing the overpayment of taxes paid, on the part of petitioner. However, the difference has no effect on petitioner's claim for refund since the claim is based on the amount of excise tax that "should have been paid" by petitioner, which, in this case, is less than what had actually been paid. 145 The CIS 146 was also compared with the CIC 147 and the volume received as shown in the monthly PBR-ORBs 148 submitted by petitioner to the BIR to confirm that the volume used by petitioner as a basis for the payment of duties and taxes matches with the volume recorded in the PBR-ORB. Further, petitioner records each transaction to its GL-SAP system which generates a PMMT report where all transfers, whether receipts, issuances, or returns, are recorded among the PBR, Ex-PBR ( i.e. , SAP temporary account for in-transit inventories) depots, ITPs, and refuellers. 149 These were compared against the volume reflected in the monthly PBR-ORBs. The result of such verification is that the volume of imported Jet A-1 fuels per CIS matches with the volume of imported Jet A-1 received and recorded in the CIC, as well as in the SAP-PMMT and PBR-ORB signed by the Revenue Officer on the Premise ("ROOP"), as shown in the Summary of Comparison of Certificates of Independent Survey with Cargo Intake Certificates, Petron Bataan Refinery's Jet A-1 Fuels SAP Product Movements by Movement Type Receipts and Petron Bataan Refinery Official Register Books Signed by Revenue Officer on Premise for the Period December 2015 to June 2016, 150 summarized as follows: CHTAIc CIS vs. CIC, SAP PMMT-Receipts and PBR-ORB Receipts Particulars Volume Total volume per CIS (KL at air) 130,773,071 Multiply by: Equivalent liters per KL 1,000 Total volume per liter at air: CIS 130,773,071 CIC, SAP PMMT-Receipts and PBR-ORB Receipts 130,773,071 Difference - Likewise, the invoices claimed under the Product Replenishment Scheme for the period January to August 2016 151 were not reported in the claim for tax refund or issuance of TCC. 152 This proves that the excise tax due on the importation of Jet A-1 fuel was actually paid by petitioner. The volumes and amount imported Jet A-1 fuel removed from the PBR to petitioner's depots then subsequently transferred to another depot, ITPs and refuellers, are accurate and properly supported. From the PBR, the imported Jet A-1 fuel is then transferred to petitioner's depots spread across the Philippines. Subsequently, the same is transferred from the said depots to other depots, ITPs, and refuellers prior to the same being delivered and sold to end customers. 153 As shown above, petitioner operates various depots where its petroleum products are stored before delivery to various airline companies. Upon receipt of imported Jet A-1 fuels by the PBR, petitioner schedules delivery to the depots through cargo vessels depending on the latter's inventory requirements. Imported Jet A-1 fuels are directly transferred from the PBR to the depots. 154 Each transfer or delivery of imported Jet A-1 fuels and by the PBR is supported by a Cargo Outturn Certificate ("COC") 155 if the transfer was made through a cargo vessel or a Stock Transfer Out-Delivery Note ("STO-DN") 156 if the transfer was made through tank trucks, and WC. 157 Upon receipt and recording of the imported Jet A-1 fuels from the PBR, a Jet A-1 LS 158 is used to account for the movement of every shipment or receipt of petroleum products (inventories) and their corresponding deliveries to another depot ( i.e. , inter-facility transfers) or to air carriers ( i.e. , sale). 159 The LS is prepared by the depots upon transfer or sale of a particular shipment of the imported Jet A-1 fuels, which is normally within one to two days from the receipt of the inventories. WC, COC, and CIC numbers are indicated in the LS. The CIC reference number in the LS is the same as that of the COC. 160 The receipt of the cargo by the depot is recorded in the GL through the PMMT by accepting the transfer initially recorded by the PBR based on the COC reference number. 161 Once accepted by the depot, the GL-SAP, through the PMMT, also generates the CIC reference number. Then, the movement of the imported Jet A-1 fuels is generated from the SAP system using the PMMT report, which is then used by the depot in its daily preparation of LSs. 162 cHDAIS Upon verification, this Court found that the volume of imported Jet A-1 fuel delivered from the PBR to the depots matches with the COC and the WC submitted to the BIR and, thus, were sourced from importation of Jet A-1 fuel during the period from 23 December 2015 to 31 December 2016: 163 PRB-ORB Issuances vs. SAP-Generated PBR-ORB Issuances: Particulars Volume (In Liters) Total Issuances: Per PBR-ORB 136,469,568 Per COC by PBR: Davao Depot 5,215,805 Iloilo Depot 4,156,186 Navotas Depot 25,193,526 Rosario Depot 2,346,865 SL Harbor Center Depot 83,073,993 Mactan Depot 13,398,674 Palawan Depot 450,034 Zamboanga Depot 2,062,324 Others 572,161 136,469,568 Difference - SAP-Generated PBR-ORB Issuances vs. Depots' COC and WC: Particulars Volume (In Liters) Per SAP-Generated PBR-ORB Issuances 164 136,469,568 Per COC and WC 165 136,469,568 Difference - Moreover, a comparison 166 of the WCs from the PBR 167 with the WC reference number indicated in the LS of the depots, 168 and a summary of the related receipts and issuances for the said depots from petitioner's PMMT report, 169 as well as the journal entry print-outs of Jet A-1 fuels 170 will show that the volume of imported Jet A-1 fuel delivered by the PBR matches with the volume received by the respective depots: EATCcI PBR Issuances per WC vs. Depots Receipts per LS and ORB (Volume in Liters): Depots Exhibit No. Per WC Per LS Difference 1 Exhibit No. Per ORB Volume received by depots Withdrawals from PBR Gross volume received In-transit gain (loss) Net volume to be received Related to Claim Not Related to Claim Davao P-221-Imported 5,215,805 5,215,805 (166,371) 5,049,434 - P-229 5,049,434 17 Iloilo P-222-Imported 2,917,230 2,917,230 (25,475) 2,891,755 - P-230 2,891,755 1,230,402 Navotas P-223-Imported 25,193,526 25,193,526 (20,436) 25,173,090 - P-231 25,173,090 (1,610) Rosario P-224-Imported 2,346,865 2,346,865 (18,045) 2,328,820 - P-232 2,328,820 24,401 SL Harbor P-225-Imported 81,597,239 81,597,239 (114,091) 81,483,148 - P-233 81,483,148 20,866,325 Mactan P-226-Imported 13,398,674 13,558,003 (37,310) 13,520,693 (159,329) P-234 13,520,693 1,125,123 Palawan P-227-Imported 450,034 450,034 (5,576) 444,458 - P-235 444,459 - Zamboanga P-228-Imported 2,062,324 2,062,324 11,027 2,073,351 - P-236 2,073,351 - Total 133,181,697 133,341,026 (376,277) 132,964,749 (159,329) 132,964,749 23,244,658 To reiterate, in-transit gain or loss pertains to the effect of the variations of the volume of imported Jet A-1 fuels due to several factors. 171 For the transfer of imported Jet A-1 fuel from a depot to other depots, ITPs, and refuellers, a comparison was made between the volume of imported Jet A-1 fuel delivered by the respective depots with the volume received by other depots, ITPs and refueller by obtaining the latter's corresponding LSs. 172 The comparison revealed that the volume of the imported Jet A-1 fuels delivered by the depots differs from the volume actually received by the respective ITPs and refueller, as provided below: Comparison of Depots LS Issuances with SAP PMMT Issuances and Depot/ITP/Refueller LS Receipts (Volume in Liters) Total Issuances Depots to Depots/ ITPs/Refueller Exhibit No. Per Depot LS Issuances Subject to Claim Per SAP PMMT Issuances Related to Claim Difference Per Depots/ITPs/ Refueller LS Receipts Direct Delivery to Customers Difference Davao depot to Davao ITP P-253-Imported 4,345,110 4,345,110 - 4,345,110 - - Iloilo depot to: Iloilo ITP P-254-Imported 300,000 300,000 - 300,000 - - Mactan depot P-254-5-Imported 40,000 40,000 - 40,000 - - Kalibo ITP P-255-Imported 2,441,755 2,411,755 30,000 2,471,755 - (30,000) 2,781,755 2,751,755 30,000 2,811,755 - (30,000) SL Harbor depot to: JOCASP/NAIA depot P-256-Imported 80,832,471 80,832,471 - 80,832,471 - - Laoag ITP P-257-Imported 38,000 38,000 - 38,000 - - 80,870,471 80,870,471 - 80,870,471 - - Navotas depot to JOCASP/NAIA depot P-258-Imported 24,893,090 24,893,090 - 24,893,090 - - Rosario depot to JOCASP/NAIA depot P-259-Imported 80,000 80,000 - 80,000 - - Mactan depot to Customers P-294-Imported 10,138,509 10,138,509 - 10,138,509 - - Palawan depot to Customers P-295-Imported 10,658 10,658 - 10,658 - - Zamboanga depot to Zamboanga refueller P-260-Imported 1,719,555 1,719,555 - 1,719,555 - - Total 124,839,148 124,809,148 30,000 114,719,981 10,149,167 (30,000) Thus, the volumes and amounts of imported Jet A-1 fuel removed from the PBR to petitioner's depots then subsequently transferred to other depots, ITPs, and refuellers are accurate and properly supported, aside from those noted variances which are summarized at the end of this Decision. ISHCcT The imported Jet A-1 fuel was sold and delivered to various air carriers of Philippine or foreign registry for the latter's use or consumption outside the Philippines and to alleged tax-exempt entities. To reiterate, petitioner prepares and generates the SIs under its SAP, 173 in accordance with the commercial terms and orders stated in the respective contracts executed between the Petitioner and the airline companies. The summary of ADRs 174 covering the period billable to the airline companies forms an integral part of the SI as proof that the volumes of imported Jet A-1 fuels were delivered to the air carriers. All SIs involving sales of imported tax-paid Jet A-1 to air carriers of Philippine or foreign registry on their use or consumption outside the Philippines and to tax-exempt entities shall carry a "No Excise Tax Billed" notation, while an invoice involving the sale of imported tax-paid Jet A-1 fuels to air carriers for domestic flights does not carry such notation. 175 Furthermore, the amounts per SI for sale of imported Jet A-1 fuels to international air carriers on their use or consumption outside the Philippines and to tax-exempt entities are dollar-denominated and translated to Philippine peso using the prescribed rates by petitioner, which are in accordance with the contract and adjusted at end of the month in the SAP based on Philippine Dealing System rate. 176 Petitioner also prepares the LS indicating the disposition of the Jet A-1 fuels received. 177 The LS shows the source of the Jet A-1 fuel, whether it came from importations or local production, and where the Jet A-1 fuels were delivered, either international or domestic deliveries. 178 Thus, based on the LS, it was determined that the Jet A-1 fuel delivered to international air carriers on their use or consumption outside the Philippines and to tax-exempt entities were sourced from importations for the period from 23 December 2015 to 31 December 2016. The following table summarizes the LS movements for the receipts and issuances of imported Jet A-1 fuel: 179 DHITCc LS Movements Receipts and Issuances (Volume in Liters): Depots/ITPs/ Refueller Exhibit No. Per Depots/ITPs/ Refueller LS Receipts Direct Delivery to Customers Per LS Issuances Subject to Claim Not Subject to Claim Total Davao ITP P-262-Imported 4,345,110 - 1,642,509 2,702,601 4,345,110 Iloilo ITP P-263-Imported 300,000 - 155,056 144,944 300,000 Mactan depot P-263-1-Imported 40,000 - 40,000 - 40,000 Kalibo ITP P-264-Imported 2,471,755 - 2,344,015 127,740 2,471,755 JOCASP/NAIA depot P-265-Imported 105,805,561 - 84,963,216 20,842,345 105,805,561 Laoag ITP P-266-Imported 38,000 - 29,360 8,640 38,000 Mactan depot P-242-Imported - 10,138,509 10,138,509 - 10,138,509 Palawan depot P-243-Imported - 10,658 10,658 - 10,658 Zamboanga refueller P-267-Imported 1,719,555 - 166,894 1,552,661 1,719,555 Total 114,719,981 10,149,167 99,490,217 25,378,931 124,869,148 Thus, the imported Jet A-1 fuel was sold and delivered to various air carriers of Philippine or foreign registry for the latter's use or consumption outside the Philippines and to alleged tax-exempt entities, except for certain variances noted by the ICPA and which is summarized at the end of this Decision. The imported Jet A-1 fuel was billed and collected net of excise tax. The deliveries of imported Jet A-1 fuel were billed and collected from alleged international carriers and tax-exempt entities without any excise tax. In arriving at this conclusion, this Court compared the details per ADRs of the depots, ITPs and refueller to the corresponding SIs billed to airline companies. After which, the details of the SIs are traced to the pricing conditions in petitioner's SAP. The tracing resulted in the following table: 180 Depot/ITP Exhibit No. ADRs STS SAP-Pricing Conditions Davao ITP P-269-1-Imported to P-269-216-Imported P-277-1-Imported to P-277-57-Imported P-277-58-Imported to P-277-114-Imported Iloilo ITP P-270-1-Imported to P-270-20-Imported P-278-1-Imported to P-278-6-Imported P-278-7-Imported to P-278-12-Imported Kalibo ITP P-271-1-Imported to P-271-250-Imported P-279-1-Imported to P-279-36-Imported P-279-37-Imported to P-279-72-Imported JOCASP/NAIA Depot P-272-1-Imported to P-272-3070-Imported P-280-1-Imported to P-280-144-Imported P-280-145-Imported to P-280-288-Imported Laoag ITP P-273-1-Imported to P-273-8-Imported P-281-1-Imported to P-281-8-Imported P-281-9-Imported to P-281-16-Imported Mactan Depot P-274-1-Imported to P-274-805-Imported P-282-1-Imported to P-282-92-Imported P-282-93-Imported to P-282-184-Imported Palawan Depot P-275-1-Imported to P-275-3-Imported P-283-1-Imported to P-283-3-Imported P-283-4-Imported to P-283-6-Imported Zamboanga Refueller P-276-1-Imported to P-276-93-Imported P-284-1-Imported to P-284-82-Imported P-284-83-Imported to P-284-164-Imported Further, petitioner's SI tied up with the SAP pricing conditions, showing that it did not charge any excise tax to international carriers and tax-exempt entities: 181 CAacTH ADR vs. SI: Exhibit No. Point of Sale ADR SI Volume (In Liters) Equivalent USD Amount Volume (In Liters) Related to Claim Not Related to Claim Total P-277-Imported Davao ITP 1,494,475 1,494,475 251,122 1,745,597 US$746,430.67 P-278-Imported Iloilo ITP 155,056 155,056 95,334 250,390 108,926.64 P-279-Imported Kalibo ITP 2,328,608 2,328,608 2,545,837 4,874,445 2,184,136.70 P-280-Imported JOCASP/NAIA Depot 84,974,058 84,974,058 142,580,521 227,554,579 80,588,823.93 P-281-Imported Laoag ITP 29,360 29,360 3,556 32,916 16,836.16 P-282-Imported Mactan Depot 10,178,509 10,178,509 16,633,021 26,811,530 10,355,665.81 P-283-Imported Palawan Depot 10,658 10,658 - 10,658 5,334.64 P-284-Imported Zamboanga Refueller 166,894 166,894 - 166,894 59,734.96 Total 99,337,618 99,337,618 162,109,391 261,447,009 US$94,065,889.51 SI vs. SAP Pricing Condition: Exhibit No. Point of Sale SI SAP Pricing Condition USD Amount USD Amount Duty Rate* Total USD Amount Equivalent Peso Amount P-277-Imported Davao ITP US$746,430.67 US$746,430.67 US$- US$746,430.67 P35,028,291.61 P-278-Imported Iloilo ITP 108,926.64 108,926,64 - 108,926.64 5,087,546.48 P-279-Imported Kalibo ITP 2,184,136.70 2,184,136.70 - 2,184,136.70 102,316,146.54 P-280-Imported JOCASP/NAIA Depot 80,588,823.93 80,588,823.93 - 80,588,823.93 3,773,033,688.44 P-281-Imported Laoag ITP 16,836.16 16,836.16 - 16,836.16 791,893.70 P-282-Imported Mactan Depot 10,355,665.81 10,355,665.81 - 10,355,665.81 486,509,800.33 P-283-Imported Palawan Depot 5,334.64 5,334.64 - 5,334.64 250,503.33 P-284-Imported Zamboanga Refueller 59,734.96 59,734.96 - 59,734.96 2,782,216.59 Total US$94,065,889.51 US$94,065,889.51 US$- US$94,065,889.51 P4,405,800,087.02 * Duty rate pertains to excise tax billed to customers. To reiterate, collections of SAP-generated SIs are made through inward remittances by petitioner's customers, which normally cover the payment of several invoices. However, for the airline company and tax-exempt entities that do not provide details of the invoices against which the collection would be applied, petitioner applies the collection on the outstanding invoices on a first-in, first-out basis. 182 cEaSHC A verification of the amount of collection per SAP clearing, inward remittances/bank advices, ORs, and bank certifications will show that these reconcile with the amount billed to the airline companies and tax-exempt entities and proves that petitioner has not collected any excise tax from its customers. 183 The same is proven by the following table: SI vs. SAP Clearing and Inward Remittance/Bank Certification/OR: Particulars Amount (in USD) Amount (in Peso) Per SI US$94,065,889.51 P4,405,800,087.02 Per Collection documents: Per SAP Clearing 94,065,889.51 4,405,800,087.02 Per Inward Remittance/Bank Certifications/OR 94,065,889.51 4,405,800,087.02 Petitioner adduced competent evidence showing that the buyers of its petroleum products are international carriers and tax- exempt entities. To repeat, one of the instances where Section 135 of the NIRC grants an exemption from excise tax on petroleum products is if the buyer of the petroleum product is an international carrier whose country similarly exempts Philippine international carriers. In the case at bar, petitioner presented the various Air Services Agreements which the Philippines has with the countries of registry of all the international carriers which it transacted with for the sale of Jet A-1 fuel. 184 A perusal of said Agreements reveals that the countries of registry similarly provide an exemption from excise tax on the petroleum products sold to international carriers of Philippine registry. Thus, any sale of petroleum products to these international carriers are likewise exempt from excise tax. With respect to the sale of Jet A-1 fuel and unleaded gasoline fuel to alleged tax-exempt entities, petitioner presented evidence 185 showing that the entities which purchased such petroleum products are indeed exempt from excise tax on petroleum products. IAETDc Following this, petitioner has indeed proven that it sold petroleum products to international carriers and tax-exempt entities. It is thus entitled to the refund sought pertaining to erroneously paid excise tax on petroleum products as provided under Section 185 of the NIRC . Petitioner's refund claim must be reduced due to certain unexplained variances noted by the ICPA. In the course of her audit and inspection of petitioner's voluminous documents submitted in support of the present refund claim, the ICPA noted certain variances which petitioner failed to explain. This Court is thus constrained to deduct these unexplained variances from the total amount which can be refunded or credited in favor of petitioner. The variances are summarized, as follows: 186 Particulars CTA Case No. 9738 CTA Case No. 9741 Consolidated Jet A-1 Fuel Jet A-1 Fuel Unleaded Gasoline Fuel Total Amounts Volume (In Liters) Amount (At P3.67 per Liter) Volume (In Liters) Amount (At P3.67 per Liter) Volume (In Liters) Amount (At P4.35 per Liter) Amount of Claim Per Schedule of Excise Tax Paid/Petition for Review 99,501,062 P365,168,897.54 7,728,768 P28,364,578.56 865,070 P3,763,054.50 P397,296,530.60 Less downward adjustments: Not traced to WC-Mactan depot 159,329 584,737.43 NA NA NA NA 584,737.43 Not traced to SAP PMMT Issuance-Kalibo ITP 30,000 110,100.00 NA NA NA NA 110,100.00 Not traced to Iloilo LS Issuances-Kalibo ITP 30,000 110,100.00 NA NA NA NA 110,100.00 Sales Deliveries to local destinations: Davao ITP 148,034 543,284.78 NA NA NA NA 543,284.78 Kalibo ITP 15,407 56,543.69 NA NA NA NA 56,543.69 Sales/Deliveries sourced from importation not subject to claim: JOCASP/NAIA Depot 10,842 39,790.14 NA NA NA NA 39,790.14 Difference of Sales/Deliveries per Schedule of Claim and Actual LS Issuance: Davao ITP 3 11.01 NA NA NA NA 11.01 PBR Removals from 2015 considered as out of period NA NA 199,942 733,787.14 - - 733,787.14 NA NA 199,942 733,787.14 - - 733,787.14 (Forwarded) (Balance forwarded) Sales/Deliveries to domestic air carriers with local destination: JOCASP/NAIA depot NA NA 20,980 76,996.60 - - 76,996.60 Mactan depot NA NA 64,049 235,059.83 - - 235,059.83 Kalibo ITP NA NA 4,305 15,799.35 - - 15,799.35 DMIA/Clark depot NA NA 5,521 20,262.07 - - 20,262.07 94,855 348,117.85 - - 348,117.85 Total downward adjustments 393,615 1,444,567.05 294,797 1,081,904.99 - - 2,526,472.04 Total 99,107,447 P363,724,330.49 7,433,971 P27,282,673.57 865,070 P3,763,054.50 P394,770,058.56 Accordingly, petitioner's refund claim is granted up to the following amounts: CTIEac CTA Case No. Particulars Amount 9738 Claim for refund or issuance of TCC pertaining to imported tax-paid Jet A-1 fuel P363,724,330.49 9741 Claim for refund or issuance of TCC pertaining to locally manufactured tax-paid Jet A-1 and unleaded gasoline fuels 31,045,728.07 Total P394,770,058.56 WHEREFORE , the consolidated Petitions for Review filed by petitioner Petron Corporation are hereby PARTIALLY GRANTED. Respondent is ORDERED to refund or issue a tax credit certificate in favor of petitioner in the reduced amount of Three Hundred Ninety Four Million Seven Hundred Seventy Thousand Fifty Eight and 56/100 Pesos (Php394,770,058.56) representing erroneously paid excise tax on petroleum products sold to international carriers and tax-exempt entities. SO ORDERED. (SGD.) MARIA ROWENA MODESTO-SAN PEDRO Associate Justice Ma. Belen M. Ringpis-Liban, J. , concurs. Footnotes 1. See Statement of the Case, Pre-Trial Order, Court of Tax Appeals ("CTA") Case No. 9738, Records, Vol. 3, p. 1476. 2. See Statement of the Case, Pre-Trial Order, CTA Case No. 9741, Records, Vol. 2, p. 1040. 3. See Statement of Facts and Issue, Pre-Trial Order, CTA Case No. 9741, Records, Vol. 2, p. 1041. 4. See Statement of Facts and Issue, Pre-Trial Order, CTA Case No. 9741, Records, Vol. 2, p. 1041; See also Statement of Facts and Issue, Pre-Trial Order, CTA Case No. 9738, Records, Vol. 3, p. 1477. 5. See Amended Articles of Incorporation, Exhibits "P-2-Imported" and "P-2"; Commingling Permit No. (P)-028-01-15-12537, dated 12 January 2015, with validity until 31 December 2015, and Commingling Permit No. (P)-028-01-16-15847, dated 22 January 2016, with validity until 31 December 2016, Exhibits "P-5-Imported", "P-5", "P-202-Imported" to "P-202-2-Imported" and "P-383" to "P-383-2"; Bureau of Customs Certificate of Accreditation, valid until 11 July 2017, Exhibit "P-6-Imported". 6. See petitioner's Memorandum, Records, CTA Case No. 9738 consolidated with CTA Case No. 9741, Vol. 8, p. 2963. 7. Ibid. 8. Ibid. 9. Ibid. 10. Ibid. 11. Ibid. 12. Id. , pp. 2963-2964. 13. Id. , p. 2964. 14. Ibid. 15. Ibid. 16. Id. , p. 2965. 17. Id. , p. 2966. 18. Ibid. 19. Ibid. 20. Id. , p. 2967. 21. Records, CTA Case No. 9738, Vol. 1, pp. 128-137. 22. Id. , Vol. 2, pp. 563-568. 23. Id. , Vol. 3, pp. 1475-1484. 24. Exhibit "P-170", Id. , Vols. 2-3, pp. 748-1366; Hearing, dated 15 October 2019, Id. , Vol. 4, pp. 1485-1488; Supplemental Judicial Affidavit, Exhibit "P-180", Id. , Vol. 4, pp. 1881-1920; Hearing, dated 15 September 2020, Id. , Vol. 4, pp. 1922-1926. 25. Exhibit "P-171", Id. , Vol. 2, pp. 515-562; Hearing, dated 15 October 2019, Id. , Vol. 4, pp. 1485-1488. 26. Exhibit "P-172", Id. Vol. 1, pp. 223-494; Hearing, dated 15 October 2019, Id. , Vol. 4, pp. 1789-1791. 27. Exhibit "P-173", Id. , Vol. 2, pp. 666-717; Hearing, dated 11 April 2019, Id. , Vol. 4, pp. 1593-1595. 28. Exhibit "P-174", Id. , pp. 718-747; Hearing, dated 14 May 2019, Id. , Vol. 4, pp. 1686-1693. 29. Exhibit "P-176", Id. , Vol. 3, pp. 1367-1399; Hearing, dated 14 May 2019, Id. , Vol. 4, pp. 1686-1693. 30. Exhibit "P-175", Id. , Vol. 2, pp. 570-665; Supplemental Judicial Affidavit, Exhibit "P-179", Id. , Vol. 4, pp. 1573-1585; Hearing, dated 11 April 2019, Id. , Vol. 4, pp. 1593-1595. 31. Id. , Vol. 3, pp. 1486-1488. 32. Exhibit "P-200", Id. , Vol. 4, pp. 1506-1571; Exhibit "P-178", Id. , Vol. 4, pp. 1608-1679; Supplemental Judicial Affidavit, Exhibit "P-179", Id. , Vol. 4, pp. 1746-1762; Hearing, dated 15 October 2019, Id. , Vol. 4, pp. 1789-1791. 33. Id. , Vol. 4, pp. 1814-1823. 34. Records, CTA Case Nos. 9738 & 9741, Vol. 4, pp. 1833-1835. 35. Records, CTA Case No. 9741, Vol. 1, pp. 103-111-137. 36. Id. , Vol. 2, pp. 1004-1009. 37. Id. , pp. 1039-1053. 38. Exhibit "P-201", Id. , Vol. 1, pp. 270-887; Hearing, dated 30 July 2019, Id. , Vol. 2, pp. 1122-1129. 39. Exhibit "P-203", Id. , Vol. 1, pp. 142-167; Hearing, dated 20 August 2019, Id. , Vol. 2, pp. 1132-1136. 40. Exhibit "P-202", Id. , Vol. 1, pp. 239-269; Hearing, dated 20 August 2019, Id. , Vol. 2, pp. 1132-1136. 41. Exhibit "P-204", Id. , Vol. 1, pp. 168-205; Hearing, dated 8 October 2019, Id. , Vol. 2, pp. 1180-1183. 42. Exhibit "P-206", Id. , Vol. 1, pp. 206-238; Hearing, dated 5 November 2019, Id. , Vol. 2, pp. 1185-1186. 43. Exhibit "P-205", Id. , Vol. 2, pp. 889-986; Hearing, dated 8 October 2019, Id. , Vol. 2, pp. 1180-1183. 44. Id. , Vol. 2, pp. 1125-1129. 45. Id. , Vol. 2, pp. 1157-1172; Exhibit "P-207", Id. , Vol. 2, pp. 1197-1300. 46. Id. , Vol. 2, pp. 1301-1309. 47. Id. , Vol. 2, pp. 1310-1311. 48. Exhibit "P-189-imported", Records, CTA Case Nos. 9738 & 9741, Vols. 4-5, pp. 1929-2085. 49. Exhibit "P-190-imported", id. , Vol. 5, pp. 2173-2346. 50. Hearing, dated 3 November 2020, id. , Vol. 5, pp. 2367-2369. 51. Id. , Vols. 6-8, pp. 2445-3814. 52. Id. , Vol. 8, pp. 3816-3820. 53. Id. , pp. 2950-2951. 54. Id. , pp. 2954-2957. 55. Id. , pp. 2960-3035. 56. See Records Verification Report, dated 21 July 2022, id. , p. 3037. 57. Id. , p. 3039. 58. See Issues, Pre-Trial Order, Records, CTA Case No. 9738, Vol. 3, p. 1477. 59. See Issues, Pre-Trial Order, Records, CTA Case No. 9741, Vol. 2, p. 1041. 60. Memorandum, Records, CTA Case Nos. 9738 & 9741, Vol. 8, pp. 2984-3033. 61. Answer, Records, CTA Case No. 9738, Vol. 1, pp. 129-134; Answer, Records, CTA Case No. 9741, Vol. 1, pp. 104-109. 62. Commissioner of Internal Revenue v. Univation Motor Philippines, Inc. , G.R. No. 231581, 10 April 2019. 63. Id. ; Philippine Airlines, Inc. v. Commissioner of Internal Revenue , G.R. Nos. 206079-80 and 206309, 17 January 2018. 64. Exhibits "P-8-imported", "P-9-imported", "P-11-imported", "P-12-imported", "P-13-imported", "P-14-imported", "P-15-imported", "P-16-imported", "P-17-imported" and "P-18-imported." 65. Exhibits "P-7-imported" to "P-18-7-1-imported" and "P-203-imported" to "P-204-70-imported". 66. Exhibits "P-6" to "P-7-1". 67. Exhibits "P-10" to "P-75-2". 68. Judicial Affidavit of Ma. Clarissa C. Arguelles, Exhibit "P-170-imported"; Consolidated ICPA Report, Exhibit "P-189-imported". 69. Exhibits "P-19-imported", "P-20-imported", "P-21-imported", "P-22-imported" and "P-201"; Judicial Affidavit of Ma. Clarissa C. Arguelles, Exhibit "P-170-imported". 70. CTA Case No. 9738, Records, Vol. 1, p. 10. 71. Judicial Affidavit of Ma. Clarissa C. Arguelles, Exhibit "P-170-imported"; Consolidated ICPA Report, Exhibit "P-189-imported". 72. Exhibits "P-8" and "P-9"; Judicial Affidavit of Ma. Clarissa C. Arguelles, Exhibit "P-170-imported". 73. CTA Case No. 9741, Records, Vol. 1, p. 10. 74. G.R. No. 188497, 19 February 2014. 75. G.R. No. 210836, 1 September 2015. 76. Consolidated ICPA Report, Exhibit "P-189". 77. Exhibits "P-6" to "P-7-1". 78. Exhibits "P-10" to "P-75-2". 79. Consolidated ICPA Report, Exhibit "P-189-imported". 80. Ibid. 81. Ibid. 82. Exhibits "P-384" to "P-384-13". 83. Summary of TSAC for the period 18 September 2015 to 1 April 2016, Exhibit No. "P-384"; Consolidated ICPA Report, Exhibit "P-189-imported". 84. Memorandum, Records, CTA Case Nos. 9738 & 9741, Vol. 8, p. 2990; Consolidated ICPA Report, Exhibit "P-189-imported". 85. Ibid. 86. Consolidated ICPA Report, Exhibit "P-189-imported." 87. Ibid. 88. Ibid. 89. Ibid. 90. Ibid. 91. Ibid. 92. Ibid. 93. Ibid. 94. Ibid. 95. Ibid. 96. Ibid. ; Exhibits "P-370" and "P-371". 97. Consolidated ICPA Report, Exhibit "P-189-imported." 98. Ibid. 99. Ibid. 100. Ibid. 101. Ibid. 102. Ibid. 103. Ibid. 104. Ibid. 105. Ibid. 106. Ibid. 107. Ibid. 108. Ibid. 109. Exhibits. "P-204-1-imported" to "P-204-12-imported". 110. Supplemental Judicial Affidavit of Ms. Dayego dated October 20, 2020 marked as Exhibit "P-190-imported". 111. Exhibits. "P-203-11-imported" to "P-203-22-imported". 112. Supplemental Judicial Affidavit of Ms. Dayego dated October 20, 2020 marked as Exhibit "P-190-imported". 113. Exhibits. "P-204-13-imported" to "P-204-36-imported". 114. Supplemental Judicial Affidavit of Ms. Dayego dated October 20, 2020 marked as Exhibit "P-190-imported". 115. Ibid. 116. Exhibits. "P-203-1-imported" to "P-203-10-imported". 117. Supplemental Judicial Affidavit of Ms. Dayego dated October 20, 2020 marked as Exhibit "P-190-imported". 118. Exhibits. "P-205-11-imported" to "P-205-15-imported". 119. Exhibits. "P-211-1-imported", "P-211-1-1-imported" to "P-211-1-102-imported". 120. Supplemental Judicial Affidavit of Ms. Dayego dated October 20, 2020 marked as Exhibit "P-190-imported". 121. Exhibits. "P-203-1-imported" to "P-203-10-imported". 122. Exhibits. "P-204-49-imported" to "P-204-60-imported". 123. Supplemental Judicial Affidavit of Ms. Dayego dated October 20, 2020 marked as Exhibit "P-190-imported". 124. Ibid. 125. Exhibits. "P-204-13-imported" to "P-204-36-imported". 126. Supplemental Judicial Affidavit of Ms. Dayego dated October 20, 2020 marked as Exhibit "P-190-imported". 127. Exhibits. "P-204-37-imported" to "P-204-48-imported". 128. Supplemental Judicial Affidavit of Ms. Dayego dated October 20, 2020 marked as Exhibit "P-190-imported". 129. Ibid. 130. Exhibit "P-202-1-imported". 131. Exhibit "P-202-2-imported". 132. Supplemental Judicial Affidavit of Ms. Dayego dated October 20, 2020 marked as Exhibit "P-190-imported". 133. Exhibits. "P-205-1-imported" to "P-205-10-imported". 134. Supplemental Judicial Affidavit of Ms. Dayego dated October 20, 2020 marked as Exhibit "P-190-imported". 135. Exhibits. "P-203-1-imported" to "P-203-10-imported". 136. Exhibits. "P-203-11-imported" to "P-203-22-imported". 137. Supplemental Judicial Affidavit of Ms. Dayego dated October 20, 2020 marked as Exhibit "P-190-imported"; Exhibit "P-203-imported". 138. Exhibits. "P-203-1-imported" to "P-203-10-imported". 139. Exhibits. "P-204-1-imported" to "P-204-12-imported". 140. Exhibits. "P-204-13-imported" to "P-204-36-imported". 141. Exhibits. "P-204-37-imported" to "P-204-48-imported". 142. Exhibits. "P-204-49-imported" to "P-204-60-imported". 143. Exhibits. "P-204-61-imported" to "P-204-70-imported". 144. Exhibit "P-204-imported". 145. Consolidated ICPA Report, Exhibit "189-imported". 146. Exhibits "P-204-61-imported" to "P-204-70-imported". 147. Exhibits "P-205-1-imported" to "P-205-10-imported". 148. Exhibits "P-205-11-imported" to "P-205-15-imported". 149. Exhibits "P-211-1-imported", "P-211-1-1-imported to P-211-1-102-imported" for PBR; Exhibits "P-212-1-imported", "P-212-1-1-imported to P-212-1-187-imported" for Ex-PBR. 150. Exhibit No. "P-205-imported." 151. Exhibits "P-208-imported". 152. Supplemental Judicial Affidavit of Ms. Dayego, dated 20 October 2020, Exhibit No. "P-190-imported"; Exhibits "P-208-imported", "P-201-imported", "P-209-imported", "P-210-imported". 153. Ibid. 154. Ibid. 155. Exhibits "P-206-6-imported" to "P-206-91-imported". 156. Exhibits "P-307-1-1 to P-307-1-962", "P-307-2-1 to P-307-2-1621", "P-307-3-1 to P-307-3-1859", "P-307-4-1 to P-307-4-153", "P-307-5-1 to P-307-5-390", "P-307-6-1 to P-307-6-319", "P-307-7-1 to P-307-7-58", "P-307-9-1 to P-307-9-238", "P-307-10-1 to P-307-10-363", "P-307-11-1 to P-307-11-366" and "P-307-12-1 to P-307-12-328". 157. Exhibits "P-207-1-imported to P-207-86-imported". 158. Exhibits "P-221-1-imported to P-221-5-imported", "P-222-1-imported to P-222-4-imported", P-223-1-imported to P-223-20-imported", "P-224-1-imported to P-224-2-imported", "P-225-1-imported to P-225-55-imported", "P-226-1-imported to P-226-8-imported", "P-227-1-imported", and "P-228-1-imported to P-228-3-imported". 159. Supplemental Judicial Affidavit of Ma. Clarissa C. Arguelles, dated 10 September 2020, Exhibit "P-190-imported". 160. Ibid. 161. Ibid. 162. Ibid. 163. Supplemental Judicial Affidavit of Ms. Dayego, dated 20 October 2020, Exhibit "P-190-imported". 164. Exhibit "P-206-imported". 165. Exhibits "P-206-imported" and "P-207-imported". 166. Exhibits "P-221-imported to P-228-imported". 167. Exhibits "P-207-1-imported to P-207-86-imported". 168. Exhibits "P-221-1-imported to P-221-5-imported", "P-222-1-imported to P-222-4-imported", "P-223-1-imported to P-223-20-imported", "P-224-21-imported to P-224-2-imported", "P-225-1-imported to P-225-55-imported", "P-226-1-imported to P-226-8-imported", "P-227-1-imported", and "P-228-1-imported to P-228-3-imported". 169. Exhibits "P-229-imported to P-236-imported". 170. Exhibits "P-213-1-1-imported to P-213-1-5-imported", "P-214-1-1-imported to P-214-1-4-imported", "P-215-1-1-imported to P-215-1-22-imported", "P-216-1-1-imported to P-216-1-2-imported", "P-217-1-1-imported to P-217-1-55-imported", "P-218-1-1-imported to P-218-1-8-imported", "P-217-1-1-imported to P-217-1-55-imported", "P-218-1-1-imported to P-218-1-8-imported", "P-219-1-1-imported", "P-220-1-1-imported to P-220-1-3-imported". 171. Consolidated ICPA Report, Exhibit P-189-imported. 172. Exhibits "P-253-1-imported to P-253-5-imported", "P-254-1-imported to P-254-4- imported", "P-254-5-1-imported", "P-255-1-imported to P-255-4-imported", "P-256-1-imported to P-256-55-imported", "P-258-1-imported to P-258-20-imported" and "P-259-1-imported to P-259-2-imported", "P-257-1-imported to P-257-2-imported", "P-260-1-imported to P-260-3-imported". 173. Exhibits "P-277-1-imported to P-277-57-imported", "P-278-1-imported to P-278-6-imported", "P-279-1-imported to P-279-36-imported", "P-280-1-imported to P-280-144-imported", "P-281-1-imported to P-281-8-imported", "P-282-1-imported to P-282-92-imported", "P-283-1-imported to P-283-3-imported", "P-284-1-imported to P-284-82-imported." 174. Exhibits "P-269-1-imported to P-269-216-imported", "P-270-1-imported to P-270-20-imported", "P-271-1-imported to P-271-250-imported", "P-272-1-imported to P-272-3070-imported", "P-273-1-imported to P-273-8-imported", "P-274-1-imported to P-274-805-imported", "P-275-1-imported to P-275-3-imported", "P-276-imported to P-276-93-imported". 175. Supplemental Judicial Affidavit of Ms. Dayego, dated 20 October 2020, Exhibit "P-190-imported". 176. Consolidated ICPA Report, Exhibit "P-189-imported"; Judicial Affidavit of Ma. Clarissa C. Arguelles, dated 25 October 2018, Exhibit "P-170-imported". 177. Judicial Affidavit of Allan James T. Tenorio, dated 25 October 2018, Exhibit "P-174-imported". 178. Ibid. 179. Consolidated ICPA Report, Exhibit "P-189-imported"; Judicial Affidavit of Mr. Pausing, dated 15 October 2018, Exhibit "P-190-imported"; Judicial Affidavit of Allan V. Peczon, dated 25 October 2018, Exhibit "P-173-imported". 180. Ibid. 181. Ibid. 182. Consolidated ICPA Report, Exhibit "P-189-imported"; Judicial Affidavit of Allan V. Peczon, dated 25 October 2018, Exhibit "P-173-imported". 183. Ibid. 184. Exhibit "P-38-imported" to "P-57-imported", also marked as Exhibits "P-134" to "P-141" and "P-155"; Supplemental Judicial Affidavit of Ma. Clarissa C. Arguelles, dated 10 September 2020, Exhibit "P-190-imported". 185. Exhibits "P-105-imported" to "P-109-imported", including sub-markings, and "P-95" to "P-100". 186. Consolidated ICPA Report, Exhibit "P-189-imported".