Case Digest (G.R. No. 198994)
Facts:
In Commissioner of Internal Revenue v. Philippine Associated Smelting and Refining Corporation, G.R. No. 186223, decided October 1, 2014, the Commissioner of Internal Revenue (petitioner) sought to reverse the Court of Tax Appeals (CTA) En Bane Decision of November 12, 2008 in CTA E.B. Case No. 351 (CTA Case No. 7565), which ruled that Philippine Associated Smelting and Refining Corporation (PASAR or respondent), a domestic corporation registered as a Zone Export Enterprise with the Export Processing Zone Authority (EPZA) under Presidential Decree No. 66 (later RA 7916), is exempt from excise tax on petroleum products used in its Lapu-Lapu, Cebu manufacturing operations and thus entitled to a refund of excise tax amounting to ₱11,687,467.62, paid by Petron and passed on to PASAR between January and October 2005. PASAR’s administrative refund claim was denied by the BIR Regional Director on January 3, 2007. Thereafter, PASAR filed a petition for review with the CTA Second DivisioCase Digest (G.R. No. 198994)
Facts:
- Parties and Procedural Posture
- The Commissioner of Internal Revenue (CIR) filed a petition under Rule 45 seeking to reverse the Court of Tax Appeals (CTA) En Banc Decision of November 12, 2008, which ruled in favor of Philippine Associated Smelting and Refining Corporation (PASAR) as a PEZA-registered enterprise enjoying excise tax exemption and entitled to refund.
- PASAR is a domestic corporation engaged in processing, smelting, refining, and exporting copper products; it is registered with the Export Processing Zone Authority (EPZA) under P.D. No. 66 (later R.A. 7916).
- Petroleum Purchases and Tax Credits
- Between January and October 2005, PASAR purchased petroleum products from Petron; Petron paid excise taxes and passed on P11,687,467.62 to PASAR.
- In December 2006, PASAR filed a claim for refund/tax credit with the BIR Regional Director (Region XIV), which was denied on January 3, 2007.
- CTA Proceedings
- PASAR petitioned the CTA Second Division; the CIR challenged jurisdiction and whether PASAR was the proper party; the petition was dismissed pending resolution of the “proper party” issue.
- The CTA En Banc (Nov. 12, 2008) set aside the Second Division resolutions, held PASAR proper party and exempt from excise tax, and remanded for evidence reception; its January 30, 2009 resolution denied CIR’s reconsideration.
- CIR elevated the matter to the Supreme Court, raising jurisdictional questions, party-in-interest issues, and interpretation of P.D. No. 66.
Issues:
- Whether PASAR is the proper party to claim refund or tax credit for excise taxes passed on by Petron, despite not being the statutory taxpayer.
- (Other issues raised by CIR regarding CTA jurisdiction and scope of exemption were not addressed by the Supreme Court, which limited its review to the “proper party” question.)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)