Commissioner of Internal Revenue v. Philippine Airlines, Inc.

EN BANC [C.T.A. EB CASE NO. 1488. July 26, 2018.] (C.T.A. Case No. 7632) COMMISSIONER OF INTERNAL REVENUE AND COMMISSIONER OF CUSTOMS , petitioners , vs .PHILIPPINE AIRLINES, INC. , respondent . [C.T.A. EB CASE NO. 1494. July 26, 2018.] (C.T.A. Case No. 7632) COMMISSIONER OF CUSTOMS , petitioner , vs .PHILIPPINE AIRLINES, INC. , respondent . DECISION UY , J p : Before the Court En Banc are two (2) consolidated Petitions for Review filed as follows: (1) CTA EB No. 1488 : Commissioner of Internal Revenue (CIR) and Commissioner of Customs (COC),petitioners, v. Philippine Airlines, Inc.,respondent ;and (2) CTA EB Case No. 1494 : Commissioner of Customs (COC),petitioner, v. Philippine Airlines, Inc.,respondent . Both petitions assail the Decision dated May 3, 2016 1 and the Resolution dated July 12, 2016 2 rendered by the Second Division of this Court (Court in Division) in CTA Case No. 7632 entitled "Philippine Airlines, Inc. (PAL) vs. Commissioner of Internal Revenue and Commissioner of Customs," the dispositive portions of which respectively read: Decision dated May 3, 2016 : " WHEREFORE ,premises considered, the instant Petition for Review is hereby PARTIALLY GRANTED . Accordingly, the respondents are ORDERED to REFUND or TO ISSUE A TAX CREDIT CERTIFICATE to petitioner Philippine Airlines, Inc. in the reduced amount of P88,542,854.00, representing the specific taxes paid for the importation of Jet A-1 aviation fuel for its domestic flight operations for the period of April to June 2005. CAIHTE SO ORDERED ." Resolution dated July 12, 2016 : " WHEREFORE ,premises considered, the CIR's Motion for Partial Reconsideration Re: Decision dated 3 May 2016 and the COC's Motion for Partial Reconsideration are hereby DENIED . Petitioner PAL's Motion to Reopen the Case for Presentation of Evidence is hereby GRANTED .Let the case be set for hearing on July 20, 2016 at 9:00 a.m. for the presentation of petitioner's additional evidence to prove that petitioner PAL properly paid the specific taxes on the subject importations of Jet A-1 aviation fuel. Accordingly, the resolution of petitioner's Motion for Partial Reconsideration of Decision is HELD IN ABEYANCE . SO ORDERED ." Additionally, in CTA EB No. 1488 ,petitioner CIR, in his Supplement to the Petition for Review , 3 prays for the reversal and setting aside of the Amended Decision dated September 9, 2016 4 and Resolution dated January 9, 2017 5 rendered by the same Court in Division in CTA Case No. 7632, the dispositive portions of which respectively read as follows: Amended Decision dated September 9, 2016 : " WHEREFORE ,premises considered, petitioner's Motion for Partial Reconsideration of Decision is GRANTED . Accordingly, the Decision dated May 3, 2016 is MODIFIED with respect to the amount of specific taxes to be refunded to petitioner. The respondents are ORDERED TO REFUND or TO ISSUE A TAX CREDIT CERTIFICATE to petitioner in the amount of P258,629,494.00, representing the specific taxes paid for the importation of Jet A-1 aviation fuel for its domestic flight operations for the period of April to June 2005. SO ORDERED ." Resolution dated January 9, 2017 : " WHEREFORE ,premises considered, the instant Motion for Reconsideration (Re: Amended Decision promulgated 9 September 2016) is hereby DENIED for lack of merit. SO ORDERED ." THE FACTS Petitioner CIR is the Commissioner of the Bureau of Internal Revenue (BIR), which is the government agency in charge of the assessment and collection of all national internal revenue taxes, fees and charges, including the excise tax of P3.67 per liter of volume capacity on Jet A-1 fuel imposed by Section 148 of the National Internal Revenue Code (NIRC) of 1997, as amended. He holds office at the BIR National Office Building, Agham Road, Diliman, Quezon City. Petitioner COC is the Commissioner of the Bureau of Customs (BOC), which is the government agency in charge of the assessment and collection of customs duties and all other lawful revenues from imported articles, including the excise tax of P3.67 per liter on imported Jet A-1 fuel imposed by Section 148 of the NIRC of 1997, as amended, as delegated and authorized by petitioner CIR through an Authority to Release Imported Goods (ATRIG) duly issued by the latter and addressed to the former, in accordance with Section 12 (a) of the NIRC of 1997, as amended. He holds principal office at the Bureau of Customs, Port Area, Manila. DETACa On the other hand, respondent Philippine Airlines, Inc. (PAL) is a domestic corporation organized in accordance with the laws of the Republic of the Philippines, with principal office at 9th Floor, PAL Center, Legazpi St.,Legazpi Village, Makati City. On January 29, 2003, then BIR Commissioner issued BIR Ruling No. 001-2003 addressed to respondent PAL, to Cebu Air Inc., to Air Philippines Corporation, and to Pacific Airways Corporation. This Ruling revoked BIR Ruling No. 013-99 and accordingly imposed a tax burden on the airlines concerned. The pertinent portions of BIR Ruling No. 001-2003 read: "This refers to the rulings of this Office that have been separately issued to you, namely: 1. BIR Ruling No. 013-99 issued to PAL on January 29, 1999; xxx xxx xxx In the light of the Certification of the Department of Energy dated December 20, 2002 that aviation gas, fuel and oil for use in domestic operation of domestic airline companies are locally available in reasonable quantity, quality and price, it is the considered opinion of this Office that there is now an absence of the second condition required for the airlines to continue to enjoy tax exemption on their importations of petroleum products for domestic operations as stated in Section 13 of PAL's Charter (PD 1590, as amended by LOI 1483) and which condition applies ipso facto to the other airlines. Accordingly your importations may not be given the same treatment as before for as long as there is such available domestic supply of petroleum products . This Ruling, therefore, supersedes the above-stated rulings and all such other rulings that may be contrary to the intent of this Ruling ,and constitutes the final decision of this Office on the matter." (Emphasis supplied) BIR Ruling No. 001-2003 essentially states that pursuant to the December 20, 2002 Certification of the Department of Energy (DOE), one of the conditions allowing tax-free importation of aviation fuel, as specified under Section 13 of respondent's franchise, Presidential Decree (PD) No. 1590, i.e .,that the petroleum product must not be "locally available in reasonable quantity, quality, or price" is no longer present. HEITAD On various dates, or from April to June 2005, respondent PAL made importations of Jet A-1 fuel and paid the corresponding specific taxes under protest. On January 2, 2007, respondent PAL filed with petitioner CIR a written request for refund of the said specific taxes in the total amount of P258,629,496.00. However, petitioner CIR failed to act on respondent's refund claim. Consequently, respondent PAL filed a Petition for Review on May 7, 2007 before the Court in Division, and the case was docketed as CTA Case No. 7632. Petitioner CIR filed his Answer in CTA Case No. 7632 on June 20, 2007, and raised the following special and affirmative defenses, inter alia :that the Petition for Review is bereft of merit due to failure of respondent PAL to exhaust all administrative remedies; that BIR Ruling No. 001-2003 dated January 29, 2003 is a valid interpretation of the provisions of the NIRC of 1997; that in effect, PAL is asking the Court to override the factual determination made by the Secretary of Department of Energy, in order to claim for refund; that respect for the factual determination of a co-equal branch of government under the time-honored principle of separation of powers should stay this Court from exercising jurisdiction; and that the amount of P258,629,496.00 specific tax being claimed by PAL which was allegedly paid under protest sometime in May and June, 2005 was not properly documented. Petitioner COC likewise filed his Answer in CTA Case No. 7632 on July 3, 2007, and interposed the following special and affirmative defenses, among others: that respondent PAL failed to exhaust administrative remedies before seeking relief from this Court; that it failed to appeal the issuance by the BIR of BIR Ruling No. 001-2003 dated January 29, 2003, to the Secretary of Finance pursuant to Section 4 of the NIRC of 1997; that PAL's resort to the Petition for Review is unavailing because it seeks to reverse the BIR and BOC's actions that are only results of prior factual determinations of another government agency; and that if it were true that PAL paid specific taxes to the BOC, the latter merely acted as a collection agency that does not have power and jurisdiction to adjudicate any issue arising from any tax impositions and other rules and regulations promulgated by the BIR in the exercise of its quasi-judicial functions. During the hearing on October 4, 2007, the Court in Division ordered the parties to submit their Joint Stipulation of Facts and Issues ,which they submitted on October 18, 2007. Thereafter, CTA Case No. 7632 was set for presentation of evidence. Respondent PAL presented the following witnesses: 1) Mr. Elvis A. Yao, Senior Assistant Vice President of the Fuel Management Department of respondent PAL; 2) Ms. Evelyn L. Taghap, Manager, Tax Services and Compliance Division of respondent PAL; 3) Ms. Myra Celeste O. Dabalos, Independent Certified Public Accountant; 4) Ms. Glendalyn Dela Cruz, Senior Science Research Specialist of the Oil Industry Competition and Monitoring Division of the DOE; and 5) Secretary Mario V. Tiaoqui, former Secretary of the DOE. Respondent PAL likewise formally offered its documentary evidence on September 25, 2012. The Court in Division issued the Resolution dated January 2, 2013 denying admission of Exhibits "A-2","D","D-1","D-2","D-3","D-4","G","G-1","G-6","H-5","H-8","J-5","J-7","K","K-4","N","O","P","Q","R","S","T-1","T-2","T-2-a","T-2-b","T-2-c","T-2-d","T-2-e","T-2-f","Y-1","Z","AA-1","AA-1-a","BB-1","BB-1-a","CC-1","CC-1-a","DD-1","DD-1-a","EE-1","EE-1-a","FF-1","FF-1-a","RR-1","F-1","H-1","I-1","J-1","F to R","AAA","KK","RR","VV","DDD","CCC","EEE",and "FFF",and admitting the rest of the exhibits. On January 21, 2013, respondent PAL filed an Omnibus Motion (A) For Partial Reconsideration of the Court's Resolution dated 02 January 2013; (B) For a Commissioner's Hearing to Compare Provisionally Marked Exhibits with the Original; (C) For Recall of Witness and Re-Identification of Exhibits; (D) For Remarking of Documents Not Found in the Records of the Case .Subsequently, the Court in Division issued the Resolution dated March 14, 2013, admitting Exhibits "VV","AAA" and "KK",but denying Exhibits "F-1","H-1","I-1","J-1" and "DDD" and its sub-markings, "CCC","EEE","FFF" and "RR".Consequently, respondent PAL filed its Proffer of Excluded Evidence on March 11, 2013 which the Court in Division noted in the Resolution dated May 10, 2013. On the other hand, petitioners presented the following as witnesses: Zenaida Y. Monsada, Director of the Oil Industry Management Bureau of the DOE, and Saturnino Dela Cruz, Assistant Director General of the Flight Standards Inspectorate Service of the Civil Aviation Authority of the Philippines (CAAP),whose testimonies in CTA Civil Case Nos. 7966, 7990 and 8020 were adopted by the Court in Division. On February 27, 2014, petitioner COC formally offered his evidence consisting of Exhibits "1" to "6-a",while petitioner CIR failed to file formal offer of evidence. In the Court in Division's Resolution dated April 7, 2014, Exhibits "1" to "6-a" were admitted as evidence. ATICcS On April 3, 2014, petitioner filed a Manifestation and Request for Admission of the February 27, 2014 Decision of the Regional Trial Court (RTC) Branch 114 of Pasay City, in the case entitled "Philippine Airlines, Inc. vs. Secretary of the Department of Finance and Secretary of the Department of Energy" docketed as Civil Case No. R-PSY-10-03889-CV. The Court in Division admitted the same in the Resolution dated May 6, 2014. The Court in Division required the parties to submit their memoranda on January 20, 2014. Petitioners CIR and COC filed their respective Memoranda on May 7, 2014 and June 25, 2014; while respondent PAL filed its Memorandum on July 7, 2014. Subsequently, CTA Case No. 7632 was submitted for decision on July 9, 2014. Thereafter, on October 31, 2014, respondent PAL filed a Motion to Reopen Trial and/or for Leave of Court to File Supplemental Memorandum which was granted by the Court in Division in the Resolution dated January 20, 2015. On May 7, 2015, CTA Case No. 7632 was submitted for decision anew. On May 3, 2016, the Court in Division rendered the assailed Decision, 6 partially granting respondent PAL's claim for refund or issuance of tax credit certificate (TCC) in the amount of P88,542,854.00, representing the specific taxes paid for the importation of Jet A-1 aviation fuel for its domestic flight operation for the period of April to June 2005. ETHIDa Petitioner CIR and COC filed their separate Motions for Partial Reconsideration on May 11, 2016 7 and May 19, 2016, 8 respectively. Likewise, respondent PAL filed a Motion for Partial Reconsideration of Decision and/or to Reopen the Case for Presentation of Evidence on May 13, 2016. 9 On July 12, 2016, the Court in Division resolved to deny the Motions for Partial Reconsideration of petitioners CIR and COC, and to grant respondent PAL's Motion to Reopen the Case for Presentation of Evidence .CTA Case No. 7632 was then set for hearing for the presentation of additional evidence on July 20, 2016. Consequently, the resolution of respondent PAL's Motion for Partial Reconsideration was held in abeyance. 10 The date of the said hearing was, however, reset to August 8, 2016, 11 after respondent PAL filed an Urgent Motion to Reset Hearing on July 19, 2016. 12 Subsequently, during the hearing held on August 8, 2016, respondent PAL presented as its witness, Emilio L. Jacinto, Chief Accountant of the Revenue Accounting Division of the Bureau of Customs, Port Area of Manila, who identified his Judicial Affidavit (Exhibit "D 8 "),letter dated June 6, 2016 from Zambrano & Gruba Law Offices, requesting the BOC for issuance of a certificate of payment (Exhibit "B 8 "),and Certification dated June 17, 2016 issued by Mr. Jacinto (Exhibit "C 8 ").In the same hearing, respondent PAL offered the above-mentioned documents as Exhibits before the Court in Division, and the latter admitted the same. 13 In the meantime, petitioner CIR filed his Petition for Review before the Court En Banc on July 26, 2016. 14 The case was docketed as CTA EB No. 1488. On July 29, 2016, petitioner COC filed a Motion for Extension of Time to File Petition , 15 praying for an extension of fifteen (15) days or until August 14, 2016 to file his Petition for Review .The Court En Banc granted petitioner COC a final and non-extendible period of fifteen (15) days or until August 14, 2016, within which to file his Petition for Review . 16 On August 15, 2016, petitioner COC filed his Petition for Review before the Court En Banc . 17 The case was docketed as CTA EB No. 1494. Subsequently, on August 16, 2016, the Court En Banc issued a Resolution, 18 ordering respondent PAL to file its Comment to the Petition for Review in CTA EB No. 1488. TIADCc Since both Petitions involve an appeal from the Court in Division's Decision dated May 3, 2016 and Resolution dated July 12, 2016 in CTA Case No. 7632, the Court En Banc consolidated CTA EB No. 1488 with CTA EB No. 1494. 19 Respondent PAL filed a Motion for Extension (of Time to File Its Comment) on September 2, 2016, 20 praying for an extension of twenty (20) days or until September 25, 2016 to file its Comment .The Court En Banc granted respondent PAL a final and non-extendible period of twenty (20) days or until September 25, 2016 to file its Comment . 21 On September 9, 2016, the Court in Division, in CTA Case No. 7632, rendered the assailed Amended Decision, 22 wherein the amount of P88,542,854.00 representing the specific taxes paid for importation of Jet A-1 aviation fuel for its domestic flight operations for the period of April to June 2005 was increased to P258,629,494.00. On September 14, 2016, petitioner CIR filed a Motion for Reconsideration (Re: Amended Decision promulgated 9 September 2016) . 23 On September 26, 2016, respondent PAL filed its Comment (on the Commissioner of Internal Revenue's Petition for Review dated 22 July 2016) in CTA EB No. 1488, 24 and its Comment (on the Commissioner of Customs' Petition for Review dated 12 August 2016) in CTA EB No. 1494. 25 In the Resolution dated October 27, 2016, 26 the Court En Banc gave due course to the consolidated Petitions for Review ,and ordered the parties to submit their respective consolidated memoranda within thirty (30) days from receipt of the said resolution. Petitioner CIR filed a Manifestation on November 15, 2016, 27 stating that he is adopting the arguments raised in his Petition for Review filed on July 26, 2016. Said Manifestation was noted by the Court En Banc on November 21, 2016. 28 For its part, respondent PAL filed its Memorandum on December 22, 2016. 29 As for petitioner COC, he also filed a Manifestation on December 15, 2016, 30 stating that he would be adopting his Petition for Review dated August 12, 2016 as his memorandum. Petitioner COC's Manifestation was noted by the Court En Banc on January 19, 2017. 31 cSEDTC In the Resolution dated January 9, 2017, 32 the Court in Division, in CTA Case No. 7632, denied petitioner CIR's Motion for Reconsideration (Re: Amended Decision promulgated 9 September 2016) for lack of merit. Consequently, on January 25, 2017, petitioner CIR filed a Supplement to the Petition for Review . 33 Thereafter, upon being ordered by the Court En Banc in the Resolution dated February 23, 2017, 34 respondent PAL filed its Comment (on the Commissioner of Internal Revenue's Supplement to the Petition for Review) on March 20, 2017. 35 In the Resolution dated April 12, 2017, the Court En Banc gave due course to the Petitions for Review ,including the Supplemental Petition for Review filed by petitioner CIR; and ordered the parties to submit their consolidated memorandum within thirty (30) days from receipt of the said Resolution. In the same Resolution, the Court En Banc decreed that the same supersedes the Resolution dated October 27, 2016 of the Court En Banc . Petitioner CIR filed his Memorandum on May 30, 2017; 36 and respondent PAL filed its Consolidated Memorandum on June 2, 2017. 37 Petitioner COC, however, failed to file his Memorandum . 38 The instant consolidated cases were deemed submitted for decision on July 17, 2017. 39 Petitioner COC filed a Manifestation on August 9, 2017, 40 manifesting, inter alia ,that neither he nor the OSG was furnished a copy of the Supplemental Petition for Review filed by Petitioner CIR on January 25, 2017; nevertheless, he submits that the Manifestation he filed on December 15, 2016, adopting his Petition for Review as his Memorandum ,should likewise be considered as his Memorandum for the purpose of resolving the pending petitions. Hence, this Decision. ASSIGNMENT OF ERRORS AND ISSUES RAISED Petitioner CIR assigns the following errors allegedly committed by the Court in Division, to wit: "THE SECOND DIVISION OF THE HONORABLE COURT ERRED IN RULING THAT RESPONDENT WAS ABLE TO PROVE THAT ITS IMPORTATIONS OF JET A-1 AVIATION FUEL ARE USED FOR ITS TRANSPORT AND NON-TRANSPORT OPERATIONS. THE SECOND DIVISION OF THE HONORABLE COURT ERRED IN RULING THAT RESPONDENT WAS ABLE TO PROVE THAT THE IMPORTED ARTICLES WERE NOT LOCALLY AVAILABLE IN REASONABLE QUANTITY, QUALITY OR PRICE BASED SOLELY ON THE AIR TRANSPORTATION OFFICE (ATO) CERTIFICATIONS ISSUED TO PETITIONER. THE SECOND DIVISION ERRED IN GRANTING [RESPONDENT]'S MOTION TO REOPEN THE CASE FOR PRESENTATION OF ADDITIONAL EVIDENCE." 41 For his part, petitioner COC assigns the following errors allegedly committed by the same Court in Division, to wit: "I THE CTA SECOND DIVISION COMMITTED SERIOUS ERROR IN GRANTING RESPONDENT'S PETITION FOR REVIEW INSOFAR AS IT ORDERED PETITIONER AND THE CIR TO REFUND IN FAVOR OF RESPONDENT THE AMOUNT OF P88,542,854.00, CONSIDERING THAT RESPONDENT FAILED TO PROVE FULL COMPLIANCE WITH THE REQUISITES FOR EXCISE TAX EXEMPTION, AND ULTIMATELY, FOR REFUND THEREOF. II IN GRANTING THE SUBJECT PETITION FOR REVIEW, THE CTA SECOND DIVISION, IN EFFECT, RULED ON THE ALLEGED INVALIDITY OF THE 2002 DOE CERTIFICATION, WHICH IS CLEARLY BEYOND ITS JURISDICTION." 42 SDAaTC Petitioner CIR's arguments : Petitioner CIR argues that respondent PAL failed to prove that the Jet A-1 aviation fuel were actually used for its transport and non-transport operations. According to petitioner CIR, the exemption granted to respondent is not absolute as it is subject to the condition that such articles or supplies or materials are imported for the use of the grantee in its transport and non-transport operations and other activities incidental thereto as explicitly stated in Section 13 of PD No. 1590. Furthermore, petitioner CIR disagrees with the ruling of the Court in Division that respondent was able to prove that the imported Jet A-1 aviation fuel was used for its transport and non-transport operations based on the ATRIG submitted. Petitioner contends that ATRIGs alone are not sufficient to prove this fact and respondent should have presented other independent and relevant evidence to support the testimony of respondent's witnesses Jhonathan Chiong and Edwin Segundo. Petitioner further argues that the Court in Division also erred in relying on the ATO Certifications issued by the Air Transportation Office (now Civil Aviation Authority of the Philippines or CAAP) as basis in ruling that Jet A-1 aviation fuel was not locally available in reasonable quantity, quality or price. It is the position of petitioner CIR that it is the Department of Energy (DOE) who is officially tasked to determine whether the total supply is enough for total demand. Thus, the Court in Division should have considered the learned testimony of the witness, Glendalyn P. Dela Cruz, a Senior Science Research Specialist of the DOE, who handles the monitoring, inventory and local refinery production of the oil companies in the country. The witness substantially testified that aviation fuel was locally available in sufficient quantity, quality and price for the period of 2001 to 2010. According to petitioner CIR, the CAAP has nothing to do with monitoring fuel supply and demand. Lastly, petitioner CIR contends that the Court in Division should have denied respondent PAL's motion to reopen trial for the presentation of additional evidence because the said respondent had every opportunity during the trial of the instant case to present evidence that would clearly establish its right to claim for refund but failed to do so. According to petitioner CIR, to allow the reopening of trial would only delay the proceeding in the instant case which has been dragging on for years already. Moreover, petitioner argues that the evidence sought to be presented by respondent PAL are not newly discovered nor were omitted through inadvertence or mistake or to correct evidence previously offered; and that they were already available during the trial of the instant case. Petitioner COC's arguments : Petitioner COC argues that the ATRIGs and the testimonies of respondent PAL's witnesses relative to its use of the subject importation did not sufficiently establish respondent PAL's compliance with the second requisite for excise tax exemption. Moreover, according to petitioner COC, there is locally available supply of Jet A-1 fuel in reasonable price during the period subject of respondent PAL's importations. Furthermore, petitioner COC claims that the Court in Division erred in holding that there is no locally available Jet A-1 fuel in reasonable quantity. Finally, petitioner COC avers that the ATO/CAAP Certifications cannot establish respondent PAL's claims that there is no locally available Jet A-1 fuel in reasonable quantity, quality or price; and that the ATO, now CAAP, which issued the said certifications, was not vested under its charter with the power and duty to certify the availability or non-availability of Jet A-1 aviation fuel, and hence, cannot validly issue any certification as to its alleged non-availability in reasonable quantity, quality or price. Respondent PAL's counter-arguments : Respondent counter-argues that the ATRIGs and testimonies of its witnesses are sufficient to prove that the Jet A-1 aviation fuel were used for its operations. In addition, respondent PAL contends that the Court in Division is correct in concluding that there is no local available Jet A-1 aviation fuel in reasonable quantity, quality or price; that even assuming that the "local available supply" includes importations, importations made by airline companies for their exclusive use should not be considered as part thereof; and that local refinery production was insufficient to meet the quantity needed by respondent PAL for its operations. acEHCD Moreover, respondent PAL points out that the ATO Certifications were properly given weight by the Court in Division; and that the ATO, now CAAP, has authority to issue certifications pertaining to local availability of aviation fuel in reasonable quantity, quality or price. Lastly, respondent PAL avers that it is entitled to refund of specific taxes paid on its importation of Jet A-1 aviation fuel in the aggregate amount of P258,629,496.00. THE COURT EN BANC 'S RULING The consolidated Petitions for Review and the Supplemental Petition for Review filed by petitioner CIR lack merit. Respondent PAL complied with the requisites for exemption from all taxes under Sec. 13 of PD No. 1590. Section 13 (b) (2) of PD No. 1590 43 states the conditions which must be complied with by petitioner in order for its imported supplies to be considered exempt from excise tax, to wit: "SECTION 13. In consideration of the franchise and rights hereby granted, the grantee shall pay to the Philippine Government during the life of this franchise whichever of subsections (a) and (b) hereunder will result in a lower tax: (a) The basic corporate income tax based on the grantee's annual net taxable income computed in accordance with the provisions of the National Internal Revenue Code; or (b) A franchise tax of two per cent (2%) of the gross revenues derived by the grantee from all sources, without distinction as to transport or nontransport operations; provided ,that with respect to international air-transport service, only the gross passenger, mail, and freight revenues from its outgoing flights shall be subject to this tax. The tax paid by the grantee under either of the above alternatives shall be in lieu of all other taxes, duties, royalties, registration, license, and other fees and charges of any kind, nature, or description, imposed, levied, established, assessed, or collected by any municipal, city, provincial, or national authority or government agency, now or in the future, including but not limited to the following : xxx xxx xxx (2) All taxes, including compensating taxes, duties, charges, royalties, or fees due on all importations by the grantee of aircraft, engines, equipment, machinery, spare parts, accessories, commissary and catering supplies, aviation gas, fuel, and oil, whether refined or in crude form and other articles, supplies, or materials; provided ,that such articles or supplies or materials are imported for the use of the grantee in its transport and transport operations and other activities incidental thereto and are not locally available in reasonable quantity, quality, or price ;x x x." (Emphases supplied) Based on the foregoing provision, in order to exempt from paying taxes, including compensating taxes, duties, charges, royalties, or fees due on all importations of aviation gas, fuel, and oil, respondent PAL must have established the following requisites, to wit: EcTCAD 1. It paid its corporate income tax covering the period when the subject importations were made; 2. The articles, supplies or materials are imported for respondent PAL's use in its transport and non-transport operations and other activities incidental thereto; and 3. The imported articles, supplies or materials are not locally available in reasonable quantity, quality or price. In this case, the compliance by PAL with first requisite is no longer in question; however, the crux of the controversy lies with respondent PAL's compliance with the second and third requisites. Specifically, the issue is whether respondent PAL was able to satisfactorily establish that the subject imported Jet A-1 aviation fuel was used in its transport and non-transport operations and other activities incidental thereto, and that the same product was not locally available in reasonable quantity, quality or price. As for the second requisite, both petitioners CIR and COC are of the position to the effect that the ATRIGs cannot constitute as proof to establish that the subject importations of Jet A-1 aviation fuel are to be used by respondent PAL in its transport and non-transport operations. Petitioner COC advances the reason for such stance in that the entries in the said ATRIGs were merely supplied by respondent PAL and are, at best, self-serving declarations made by the latter. From this reasoning, it can be surmised that petitioner COC presupposes that the BIR are left nothing else to do, after a taxpayer applies for the issuance of an ATRIG, except to perfunctorily issue the same. We do not agree with petitioners. An ATRIG is a document that is issued by petitioner CIR, or his duly authorized representative, in accordance with the procedures set forth in Revenue Memorandum Order (RMO) No. 35-2002, 44 and the same is addressed to the petitioner COC, allowing the release of imported goods from customs custody upon payment of applicable taxes, or proof of exemption from payment thereof, whichever is applicable. Pertinent portions of RMO No. 35-2002 reads as follows: "II. Policies and Guidelines xxx xxx xxx 6. Proper coordination with the authorized representatives of the Bureau of Customs shall always be maintained if an ocular inspection is needed in order to verify the actual description of the imported article or to secure a sample thereof for purposes of laboratory analysis . xxx xxx xxx 8. Applications for ATRIG with legal issues on the taxability or exemption of the imported articles shall be referred to the Legal Division of the Regional Office or to the Law Division, National Office, as the case may be, for appropriate resolution. x x x. For issues not requiring legal resolution, samples of the imported goods requiring laboratory analysis shall be referred to the BIR Laboratory Section National Office, for appropriate action. x x x. In the event that the correct product classification and basis of taxation of imported article can be sufficiently determined on the basis of acceptable Certificate of Analysis and/or Material Safety Data Sheet (MSDS) together with complete product specification and/or product data/information, whichever is applicable, the conduct of actual laboratory analysis may be dispensed with. x x x. xxx xxx xxx III. PROCEDURES A. REVENUE DISTRICT OFFICE (RDO) HAVING TERRITORIAL JURISDICTION OVER THE PORT OF ENTRY HSAcaE xxx xxx xxx REVENUE OFFICER ASSIGNED TO PROCESS THE APPLICATION FOR ATRIG 1. Process the application: xxx xxx xxx f. Require submission of the following, in cases where there are doubts on the representations made by the importer on its application ,whichever is applicable : i. Samples of the imported goods to be taken directly and personally from the shipment by the processing revenue officer and/or BIR laboratory representatives for BIR laboratory analysis . ii. Literatures/brochures/product data containing product description of imported goods. iii. Certification from appropriate regulatory government offices authenticating the representations made by the importer/applicant . iv. Conduct actual ocular inspection of motor vehicles . xxx xxx xxx 5. Coordinate with importer as to the exact details of release from customs custody (date, time, mode of delivery and place of destination of the imported articles),in cases where the ATRIGs are issued for excise tax purpose ." (Emphases and underscoring supplied) Based on the foregoing and contrary to the stance of petitioner COC, ATRIGs are not simply issued upon the filing of the application of the importer. Certain verifications and processes are done by the BIR prior to the issuance of an ATRIG, such as the proper coordination with the authorized representatives of the BOC and with the importer as regards the pertinent importation, the determination of whether there are issues for legal resolution, and the determination of whether there is a need for the submission of certain information "in cases where there are doubts on the representations made by the importer on its application." Therefore, it is not correct to claim that the contents of the subject ATRIGs are self-serving. AScHCD To the mind of the Court En Banc ,the contents in the subject ATRIGs to the effect that the subject Jet A-1 aviation fuel "will be used exclusively for domestic flight operation" or "will be used exclusively for daily domestic flight operation," 45 must be given weight, under Section 44, Rule 130 of the Rules of Court, which provides as follows: "SEC. 44. Entries in official records . Entries in official records made in the performance of his duty by a public officer of the Philippines ,or by a person in the performance of a duty specially enjoined by law, are prima facie evidence of the facts therein stated ." (Emphases supplied) Such being the case, the subject ATRIGs must be accorded probative value in establishing respondent PAL's compliance with the above-stated second requisites in granting tax exemption under Section 13 (b) (2) of PD No. 1590, i.e. ,that the articles, supplies or materials are imported for respondent PAL's use in its transport and non-transport operations and other activities incidental thereto. With respect to the contention that the testimonies of respondent PAL's witnesses are likewise self-serving, the Court En Banc finds the said witnesses to be competent and credible witnesses, who testified of their personal knowledge. If petitioners' claim otherwise, then, they should have presented controverting evidence to show that the imported. Jet A-1 aviation fuel were not to be used for respondent PAL's transport and non-transport operations and other activities incidental thereto. Having failed to do so, the Court En Banc sustains the Court in Division's findings on the matter. As for the third requisite, petitioners CIR and COC impute error on the Court in Division for relying on the subject ATO Certifications to the effect that Jet A-1 aviation fuel was not legally available in reasonable quantity, quality or price. Petitioners CIR and COC instead point to the DOE as the proper authority to certify of such fact. Again, We disagree with petitioners. It is noteworthy that the subject ATO Certifications were issued by the ATO, prior to its replacement by the CAAP under Republic Act (RA) No. 9497; and that there is no indication that the ATO was precluded from issuing the said Certifications with respect to the availability of supply of aviation fuel. In fact, a perusal of the powers of the ATO (now CAAP) in relation with its authority to issue the said ATO Certifications, would show that such is in line with its general powers under Sections 32 and 35 of its charter, RA No. 776, to wit: "SECTION 32. Powers and duties of the Administrator . Subject to the general control and supervision of the Department Head, the Administrator shall have among others, the following powers and duties: (1) To carry out the purposes and policies established in this Act; to enforce the provisions of, the rules and regulations issued in pursuant to, said Act, and he shall primarily be vested with authority to take charge of the technical and operational phase of civil aviation matters . xxx xxx xxx (21) To cooperate, assist and coordinate with any research and technical studies on design, materials, workmanship, construction, performance, maintenance, and operation of aircraft, aircraft engines, propellers, appliances and air navigation facilities including aircraft fuel and oil ;Provided, That nothing in this Act shall be construed to authorize the duplication of the laboratory research, activities or technical studies of any existing governmental agency. (Emphases and underscoring supplied) " With the foregoing functions mandated by law before the abolition of the ATO, the latter had the means of knowing the facts stated in the subject ATO Certifications. 46 Such being the case, similar to the ATRIG, the said Certifications to the effect that the subject Jet A-1 aviation fuel "is not locally available in reasonable quantity, quality and price and is necessary/incidental for the operation of Philippine Airlines," must likewise be given weight under the aforequoted Section 44, Rule 130 of the Rules of Court. AcICHD Thus, there can be no merit on the contention of petitioners CIR and COC that it is only the DOE which is in a best position to determine the local availability in reasonable quantity, quality and price of the subject Jet A-1 Aviation fuel. Correspondingly, with the said ATO Certifications, respondent PAL has shown compliance with the third requisite in granting tax exemption under Section 13 (b) (2) of PD No. 1590, i.e. ,that the imported articles, supplies or materials are not locally available in reasonable quantity, quality or price. The Court in Division did not err in granting respondent PAL's Motion to Reopen the Case for Presentation of Additional Evidence. With regard to the issue as to whether the Court in Division erred in granting respondent PAL's "Motion to Reopen for Presentation of Additional Evidence," petitioner CIR contends that the Court in Division should have denied respondent's motion to reopen trial for the presentation of additional evidence because respondent had every opportunity during the trial of the instant case to present evidence that would clearly establish its right to claim for refund but failed to do so. According to petitioner CIR, to allow the reopening of trial would only delay the proceeding in the instant case which has been dragging on for years already. Allegedly, the evidence sought to be presented by respondent PAL are not newly discovered nor were omitted through inadvertence or mistake or to correct evidence previously offered; and that they were already available during the trial of the instant case. caITAC We disagree with petitioner CIR. In a line of decisions, the Supreme Court has recognized the rule that the proceedings before this Court shall not be governed strictly by the technical rules of evidence. 47 In BPI-Family Savings Bank vs. Court of Appeals, et al .( BPI case), 48 the Supreme Court permitted the appreciation of a copy of the Final Adjustment Return for 1990 attached to BPI's Motion for Reconsideration .The High Court emphasized, to wit: "True, strict procedural rules generally frown upon the submission of the Return after the trial. The law creating the Court of Tax Appeals, however, specifically provides that proceedings before it shall not be governed strictly by the technical rules of evidence. The paramount consideration remains the ascertainment of truth. Verily, the quest for orderly presentation of issues is not absolute. It should not bar courts from considering undisputed facts to arrive at a just determination of a controversy ." (Emphasis supplied) Furthermore, in Dulos Realty and Development Corporation vs. Hon. Court of Appeals and Vicenta Peleas (Dulos Case), 49 the Supreme Court held: "Did the appellate court err in treating petitioners motion as one for new trial? We note that petitioners motion was captioned alternatively, for reopening/clarification and reconsideration. Under Section 1 (c) of Rule 37 of the Rules of Court, before it was amended on July 1, 1997, a motion for new trial was aimed to convince the court that its ruling was erroneous and improper for being contrary to the law or the evidence. However, apparent from petitioners motion and the subsequent hearing thereon was petitioners intention to make the trial court reconsider its decision to conform with the law and the evidence by reiterating the decision of the HLURB, the government agency which has the primary jurisdiction on the enforcement of PD 957 as amended, and by informing said trial court that private respondent already abandoned the premises, hence, making the Antipolo ruling cited by the court inapplicable. That private respondent had already abandoned the premises is not a newly found evidence for admittedly, petitioner knew of it before the trial court rendered its decision. Hence, it could not be introduced through a motion for new trial under Section 1 Rule 37 of the Rules of Court. Neither could said abandonment be introduced through a motion to reopen, because such motion could only be made after the case was submitted for decision but before judgment is actually rendered. In this case, it was only introduced as evidence in the motion filed after judgment, which in our view is appropriately one for reconsideration. Had the trial court not allowed petitioner to present said proof of abandonment, said court would not have had the chance to correct its decision .It would have effectively forced private respondent to continue with the contract to buy the house and lot on installment, even if she had lost interest in performing her obligations under that contract to the great prejudice of petitioner. ICHDca In Lim vs. Court of Appeals ,188 SCRA 23, 33 (1990),we held that technicalities should not be resorted to in derogation of the intent of the rules which is the proper and just determination of controversies. Every party-litigant should be afforded the amplest opportunity for the proper and just disposition of his cause free from undue constraints of technicalities .Worth noting is petitioner's allegation that private respondent is already dead and that her heirs did not seem to be interested in the matter nor were they capable of assuming private respondent's obligation under the contract, though her counsel continued to pursue the case. Nowhere in the records was this allegation denied by private respondent's counsel. Thus, we agree with the petitioner that evidence on abandonment of the premises by private respondent was properly received even only for purposes of reconsideration and clarification." (Emphases supplied) Based on the foregoing pronouncements by the Supreme Court, this Court is not strictly bound by technical rules. The BPI and Dulos cases are instances where the Supreme Court appreciated evidence that was attached to a Motion for Reconsideration and that was only submitted after judgment, for the purpose of promoting the proper and just determination of the controversies. This is consistent with the avowed policy of this Court to liberally apply its rules of procedure to promote its objective of securing a just, speedy, and inexpensive determination of every action and proceeding before the Court, pursuant to Section 2, Rule 1 of the Revised Rules of the Court of Tax Appeals, as amended. cDHAES To be clear, the Court in Division did not err when it granted respondent PAL's Motion to Reopen the Case for Presentation of Evidence as this Court is not bound by technical rules of evidence, and may consider to allow parties to present additional evidence for the purpose of proper and just determination of controversies. WHEREFORE ,in light of all the foregoing considerations, the consolidated Petitions for Review ,and the Supplemental Petition for Review filed by petitioner CIR, are DENIED for lack of merit. Accordingly, the Decision dated May 3, 2016 as modified in the Amended Decision dated September 9, 2016, and the Resolutions dated July 12, 2016 and January 9, 2017, all rendered by the Court in Division in CTA Case No. 7632 are AFFIRMED . SO ORDERED . (SGD.) ERLINDA P. UY Associate Justice Roman G. del Rosario, P.J.,Juanito C. Castaeda, Jr.,Lovell R. Bautista, Caesar A. Casanova, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla, Ma. Belen M. Ringpis-Liban and Catherine T. Manahan, JJ. ,concur. Footnotes 1. Penned by Retired Associate Justice Amelia R. Cotangco-Manalastas, concurred by Associate Justice Juanito C. Castaeda, Jr. and Justice Caesar A. Casanova, EB Docket (CTA EB No. 1488),pp. 38 to 66; EB Docket Vol. 1 (CTA EB No. 1494),pp. 108 to 136. 2. EB Docket (CTA EB No. 1488),pp. 67 to 75; EB Docket Vol. 1 (CTA EB No. 1494),pp. 138 to 146. 3. EB Docket (CTA EB No. 1488),pp. 186 to 211. 4. EB Docket (CTA EB No. 1488),pp. 217 to 222. 5. Penned by Associate Justice Juanito C. Castaeda, Jr.,concurred by Associate Justice Caesar A. Casanova, while Associate Justice Catherine T. Manahan took no part, EB Docket (CTA EB No. 1488),pp. 223 to 228. 6. EB Docket (CTA EB No. 1488),pp. 38 to 65. 7. Division Docket (CTA Case No. 7632) Vol. IV, pp. 1932 to 1944. 8. Division Docket (CTA Case No. 7632) Vol. V, pp. 1976 to 2006. 9. Division Docket (CTA Case No. 7632) Vol. IV, pp. 1946 to 1964. 10. Resolution dated July 12, 2016, EB Docket (CTA EB No. 1488), pp. 67 to 75. 11. Division Docket (CTA Case No. 7632) Vol. V, p. 2086. 12. Division Docket (CTA Case No. 7632) Vol. V, pp. 2080 to 2083. 13. Minutes of hearing held on August 8, 2016, and Order dated August 8, 2016, Division Docket (CTA Case No. 7632) Vol. V, pp. 2106 to 2110. 14. EB Docket (CTA EB No. 1488),pp. 1 to 37. 15. EB Docket (CTA EB No. 1494) Vol. 1, pp. 1 to 5. 16. Minute Resolution dated August 8, 2016, EB Docket (CTA EB No. 1494) Vol. 1, p. 7. 17. EB Docket (CTA EB No. 1494) Vol. 1, pp. 8 to 106. 18. EB Docket (CTA EB No. 1488),pp. 80 to 81. 19. Minute Resolution dated August 26, 2016, EB Docket (CTA EB No. 1488),p. 82. 20. EB Docket (CTA EB No. 1488),pp. 83 to 86. 21. Minute Resolution dated September 8, 2016, EB Docket (CTA EB No. 1488),p. 88. 22. EB Docket (CTA EB No. 1488),pp. 217 to 222; Division Docket (CTA Case No. 7632) Vol. V, pp. 2115 to 2120. 23. Division Docket (CTA Case No. 7632) Vol. V, pp. 2121 to 2145. 24. EB Docket (CTA EB No. 1488),pp. 89 to 101. 25. EB Docket (CTA EB No. 1488),pp. 102 to 121. 26. EB Docket (CTA EB No. 1488),pp. 135 to 137. 27. EB Docket (CTA EB No. 1488),pp. 141 to 143. 28. Minute Resolution dated November 21, 2016, EB Docket (CTA EB No. 1488),p. 145. 29. EB Docket (CTA EB No. 1488),pp. 146 to 177. 30. EB Docket (CTA EB No. 1488),pp. 179 to 181. 31. Minute Resolution dated January 19, 2017, EB Docket (CTA EB No. 1488),p. 185. 32. Division Docket (CTA Case No. 7632) Vol. V, pp. 2176 to 2181. 33. EB Docket (CTA EB No. 1488),pp. 186 to 214. 34. EB Docket (CTA EB No. 1488),pp. 233 to 234. 35. EB Docket (CTA EB No. 1488),pp. 235 to 241. 36. EB Docket (CTA EB No. 1488),pp. 246 to 272. 37. EB Docket (CTA EB No. 1488),pp. 274 to 308. 38. Records Verification Report dated June 19, 2017 issued by the Judicial Records Division of this Court, EB Docket (CTA EB No. 1488),p. 311. 39. EB Docket (CTA EB No. 1488),pp. 313 to 314. 40. EB Docket (CTA EB No. 1488),pp. 315 to 319. 41. EB Docket (CTA EB No. 1488),p. 248. 42. EB Docket (CTA EB No. 1494) Vol. 1, p. 28. 43. AN ACT GRANTING A NEW FRANCHISE TO PHILIPPINE AIRLINES, INC. TO ESTABLISH, OPERATE, AND MAINTAIN AIR-TRANSPORT SERVICES IN THE PHILIPPINES AND OTHER COUNTRIES. 44. SUBJECT: Prescribing the Guidelines and Procedures in the Processing and Issuance of AUTHORITY TO RELEASE IMPORTED GOODS (ATRIG) for Excise and Value-Added Tax Purposes. 45. Exhibits "PP-1" to "PP-5". 46. Exhibits "MMM" to "D 5 ". 47. Calamba Steel Center, Inc. (formerly JS Steel Corporation), vs. Commissioner of Internal Revenue , G.R. No. 151857, April 28, 2005; Dizon vs. Court of Tax Appeals & Commissioner of Internal Revenue , G.R. No. 140944, April 30, 2008; Commissioner of Internal Revenue vs. De La Salle University, Inc., etseq. ,G.R. Nos. 196596, 198841 & 198941, November 9, 2016. 48. G.R. No. 122480, April 12, 2000, 330 SCRA 507. 49. G.R. No. 128516, November 28, 2001.