G.R. No. 121867 - Smith Kline and French Laboratories, Ltd. vs. Court of Appeals

Pilipinas Shell Petroleum Corporation (PSPC) is a corporation engaged in the manufacture and distribution of petroleum products that began importing alkylate as a raw material/blending component to comply with Republic Act No. 8749 and Philippine National Standards.
Petitioners in the consolidated actions include the Commissioner of Internal Revenue (CIR), the Bureau of Customs (BOC), and the Collector of Customs of the Port of Batangas (Collector); PSPC is respondent in the government petitions and petitioner in its certiorari action.
The principal administrative instrument in controversy is Document No. M-059-2012 (June 29, 2012) issued by the CIR, and the consequential Demand Letter dated October 1, 2012 from the Collector computing alleged deficiency excise taxes of P1,994,500,677.47 for PSPC’s alkylate importations (January 2010–June 2012).

From May 2010 to August 2011 the BIR issued twenty-one Authorities to Release Imported Goods (ATRIGs) indicating alkylate was not subject to excise tax as not enumerated under Title VI of the NIRC 1997.
The BOC engaged SGS for third-party testing; SGS’s Certificate of Analysis (May 4, 2011) reported alkylate did not meet PNS specifications for finished gasolines.
The Tariff Commission (Ruling No. 11-056, March 14, 2012) and the Department of Energy (letter June 27, 2012) opined alkylate is an intermediate/raw blending component, not a finished product, and thus not subject to excise tax.
Despite these, the BIR began inserting a colatilla in ATRIGs (September 2011) reserving its position on excise tax collection “without prejudice,” and the Collector requested a legal opinion from the CIR via Commissioner Biazon (June 13, 2012 letter).

CIR issued Document No. M-059-2012 (June 29, 2012) concluding, based on a BIR laboratory report, that alkylate qualifies as a product similar to naphtha and is therefore subject to excise tax under Section 148(e), and stating PSPC should pay Php1,384,721,993.00 (exclusive of increments).
Commissioner Biazon issued Customs Memorandum Circular No. 164-2012 (July 18, 2012) directing the Collector to take appropriate action based on Document M-059-2012.
Commissioner Biazon requested computation assistance from the CIR (August 31, 2012); CIR replied with computation (September 5, 2012) aggregating P1,994,500,677.47 inclusive of interest and penalties.
Collector issued Demand Letter (October 1, 2012) requiring payment of P1,994,500,677.47 for importations January 2010–June 2012.

PSPC filed a petition for review with the Court of Tax Appeals (CTA) on August 24, 2012 challenging Document M-059-2012 for lack of factual basis, due process violation, and retroactive application; petition docketed CTA Case No. 8535 and later amended to include the October 1, 2012 Demand Letter.
PSPC filed multiple Urgent Verified Motions for Suspension Orders and for injunctive relief (TRO/WPI) seeking to enjoin implementation of Document M-059-2012 and to suspend collection for specific shipments; some motions were initially denied for lack of assessment, some granted as to specific past liability.
CTA Second Division (Jan 28, 2013) denied Omnibus Motion to dismiss filed by BOC/Collector and held CTA has jurisdiction because Document M-059-2012 was in the nature of a BIR Ruling and the October 1, 2012 Demand Letter constituted a tax assessment; CTA then issued Suspension Order limited to the amounts in the Demand Letter (Oct 22, 2012).
BOC/Collector elevated denial to CTA En Banc (CTA EB Case No. 1047); CTA En Banc denied due course (Feb 10, 2014); BOC/Collector filed petition to the Supreme Court (G.R. No. 211294).
CIR filed Motion to Dismiss ...(Subscriber-Only)

Whether the CIR, BOC, and the Collector violated the rule against forum shopping by filing multiple petitions (G.R. Nos. 210501 and 211294) challenging CTA jurisdiction and orders.
Whether the BOC and the Collector invoked the proper remedy in filing a Petition for Review with the CTA En Banc (CTA EB Case No. 1047) to challenge an interlocutory division resolution.

Whether Document No. M-059-2012 is a BIR Ruling or a mere internal communication, and the legal consequences of that classification.
Whether the CTA has jurisdiction to entertain PSPC’s direct challenge to Document M-059-2012 in light of the NIRC and review procedures (Section 4 NIRC) and related jurisprudence.
Whether the doctrine of exhaustion of administrative remedies was violated and, if so, whether recognized exceptions apply.
Whether the CTA has jurisdiction to entertain PSPC’s challenge to the October 1, 2012 Demand Letter and to entertain appeals from assessments or decisions of the Collector or other customs actions.

Whether the CTA has statutory authority to issue Suspension Orders for PSPC’s subsequent and future alkylate importations not covered by the amended petition and existing assessments.
Whether PSPC demonstrated the requisites (including jeopardy) for Suspension Orders or for injunctive relief (TRO/WPI) to enjoin implementation of Document M-0...(Subscriber-Only)