Petitioner Exxon is a
foreign corporation duly organized and existing under the laws of the State of Delaware, United
States of America. It is authorized to do business in
the Philippines through its Philippine Branch. Exxon is engaged in
the business of selling petroleum products to domestic and international
carriers. In pursuit of its
business, Exxon purchased from Caltex Philippines, Inc. (Caltex) and
Petron Corporation (Petron) Jet A-1 fuel and other petroleum products,
the excise taxes on which were paid for and remitted by both Caltex and Petron. Said taxes, however, were passed on to Exxon which
ultimately shouldered the excise taxes on the fuel and petroleum products.
Exxon filed
administrative claims for refund with the Bureau of Internal Revenue (BIR).
Exxon filed a petition for review
with the CTA claiming a refund or tax of excise taxes paid on Jet A-1 fuel
and other petroleum products it sold to international carriers from November
2001 to June 2002.
During
Exxons preparation of evidence, the CIR filed a motion dated January 28,
2005 to first resolve the issue of whether or not Exxon was the proper
party to ask for a refund. Exxon filed its opposition to the motion
Issue: Whether or not petitioner is the proper party to ask for
refund?
Held:
Exxon argues that having paid the
excise taxes on the petroleum products sold to international carriers, it is a
real party in interest consistent with the rules and jurisprudence.
It reasons out that the subject of the exemption is neither
the seller nor the buyer of the petroleum products, but the products
themselves, so long as they are sold to international carriers for use in
international flight operations, or to exempt entities covered by tax treaties,
conventions and other international agreements for their use or consumption,
among other conditions.
Thus, as the exemption granted under Section 135 attaches to
the petroleum products and not to the seller, the exemption will apply
regardless of whether the same were sold by its manufacturer or its distributor
for two reasons. First, Section 135 does not require that to be
exempt from excise tax, the products should be sold by the manufacturer or producer. Second,
the legislative intent was precisely to make Section 135 independent from
Sections 129 and 130 of the NIRC, stemming from the fact that unlike other
products subject to excise tax, petroleum products of this nature have become
subject to preferential tax treatment by virtue of either specific
international agreements or simply of international reciprocity.
The CTA En Banc, thus, held that:
The determination of who is the
taxpayer plays a pivotal role in claims for refund because the same law
provides that it is only the taxpayer who has the legal personality to ask for
a refund in case of erroneous payment of taxes. Section 204 (C) of the 1997
NIRC, [provides] in part, as follows:
SEC. 204. Authority of the Commissioner to Compromise, Abate, and Refund
or Credit Taxes. The Commissioner may
(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 showing an
overpayment shall be considered as a written claim for credit or refund.
Therefore,
as Exxon is not the party statutorily liable for payment of excise taxes under
Section 130, in relation to Section 129 of the NIRC, it is not the proper party
to claim a refund of any taxes erroneously paid.
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