COMMISSIONER OF INTERNAL REVENUE v. PETRON CORPORATION

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS Quezon City ENBANC COMMISSIONER OF CTA EB NO. 3035 INTERNAL REVENUE, (CTA Case Nos. 10252 and 10297 ) Petitioner, Present: RINGPIS-LIBAN, £1. , BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJARDO, -versus- CUI-DAVID, FERRER-FLORES, ANGELES, TESTON, and CENTENO-DIJAMCO, fl. PETRON CORPORATION, Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X RESOLUTION BACORRO-VILLENA, L.: For the Court's resolution is petitioner Commissioner of Internal Revenue's (petitioner's/ CIR's) "Motion for Reconsideration (Re: Decision promulgated 28 January 2026)"1 (MR), filed on n February 2026 and emailed on 12 February 2026, with respondent Petron Corporation's (respondent's/ Petron's) "Comment/ Opposition (Re: Motion for Reconsideration dated 4 February 2026)" 2 (Comment/ Opposition) 2026. t filed via registered mail on 09 March 2026 and emailed on 10 March Rollo, pp. 181- 190. Id., pp. 200-2 13.

RESOLUTION CTA EB NO. 3035 (CTA Case Nos. 10252 & 10297) Commissioner of Internal Revenue v. Petron Corporation Page 2 of9 x---------------------------------------------x In the instant MR, 3 petitioner assails this Court's Decision dated 28 January 2026 4 (assailed Decision), denying the present Petition for Review 5 for lack of merit and thereby affirming the Second Division's finding that respondent is entitled to a refund or issuance of a tax credit certificate (TCC) in the following aggregate amounts: (1) ~'34,s36,789.oo, representing excise taxes erroneously paid by respondent on importations of alkylate covered by Bureau of Customs (BOC) Single Administrative Document (SAD) No. 6WOA18oo019 6 on 30 January 2018 and 04 April 2018; and (2) 1'3s,o46,886.oo, representing excise tax erroneously paid by respondent on importation of alkylate covered by BOC SAD Reference No. 6WOA18o01oo 7 on 02 May 2018 and 13 July 2018. Taking into account that refund is in the nature of a tax exemption and should be construed strictissimi juris against the claimant, petitioner insists that respondent is liable to pay excise taxes since alkylate is a product of distillation and falls within the category of naphtha, regular gasoline and other similar products of distillation; hence, subject to 8 excise tax under Section 148(e) of the National Internal Revenue Code (NIRC) of1997, as amended. In support of his or her positiOn, petitioner cites the Court En Bane's ruling in Petron Corporation v. Commissioner of Internal Revenue. 9 There, the Court En Bane sustained the Court in Division's finding that since alkylate cannot be produced without the raw material 'isobutane', which is a product of distillation, it logically follows that~ ·' Supra at note I. Rollo. pp. 115-174. U Filed on 29 November 2024. id .. pp. I-3.J. ,, See Exhibits ··r-5··. ··r-9··. ··P-9-A··. and ··P-9-s··. id .. Volume IV. pp. 1640-1641. 1646. 1647-1648. and 164-9-1650. respectively·: see also E -..,:hi bits ··P-49-l .. to ··P-49-2:· '"P-49-3"' to .. P-49-4". and ··P-49- T. USB. See E'hibits ··r-6··. ··P-I 0-A ··. ··P-I 0-s·· and ··P-I o··. id .. Volume IV. pp. 1642-1643. 1652. 1653. and 1651. respectively: see also bhibits ··P-49-1"" to ··P-49-2."" ··P-49-5"" to ··r-49-6"". and ··r-49- g··. USB. SEC. 1~8 . .\lanu/ilclwul Oils and l!ihcr Fuels.- There shall be collected on relined and manufactured mineral oils and motor fuels. the following excise taxes which shall attach to the goods hereunder enumerated as soon as they are in existence as such: (e) Naphtha. regular gasoline and other similar products of distillation. per liter of volume capacity. Four pesos and thir1y-five centavos (P-l.35): Prm·ided. lunrerer, That naphtha. when used as a raw material in the production of petrochemical products or as replacement fuel for natural-gas-tired- combined cycle power plant in lieu or locally-extracted natural gas during the non-availability thereof subject to the rules and regulations to be promulgated by· the Secretary of Energy. in consultation with the Secretar) of Finan<.:c. per liter of volume capacity. zero (PO.OO): Prorided, fill'ther. That the by-product including fuel oil. diesel fuel. kerosene. pyrolysis gasoline. liquefied petroleum gases and similar oils having more or less the same generating power. which are produced in the processing of naphtha into petrochemical products shall be subject to the applicable e'cise tax specified in this Section, except\\ hen such by-products are transferred to any of the local oil refineries through sale. barter or exchange. for the purpose of further processing or blending into finished products which are subject to e.\cisc tax under this Section[.] CTA EB Case No. 2425 (CTA Case \Jos. 9565. 9606 & 9645). 21 June 2022.

RESOLUTION CTA EB NO. 3035 (CTi\ Case Nos. 10252 & 10297) Commissioner of Internal Revenue v. Petron Corporation Page 3 of9 x---------------------------------------------x alkylate itself, although indirectly, is a product of distillation. Consequently, it still falls under the purview of excise tax as outlined in Section 148(e) 10 of the NIRC of 1997, as amended. Petitioner likewise argues that his or her "Motion for Reconsideration (Re: Decision promulgated 14 August 2024)" 11 (MR before the Second Division) is not pro forma merely because it reiterates arguments that the Court had previously considered and rejected. Citing Marikina Valley Development Corporation, eta/. v. Han. Napoleon R. Flojo, et a/.' 2 (Marikina Valley), petitioner asserts that an MR necessarily allows a movant to reassert previously raised arguments in order to persuade the court that its ruling is erroneous. Thus, petitioner maintains that the mere repetition of arguments does not automatically render an MR pro forma. On the other hand, in its Comment/Opposition,' 3 respondent echoes this Court's findings in the assailed Decision. 14 Specifically, respondent puts forward the following countervailing arguments below. First, the Court En Bane ruled correctly that petitioner's MR before the Second Division is pro forma and, thus, did not toll the reglementary period of appeal. Since the Second Division's judgment became final and executory, the Court En Bane is without jurisdiction to take cognizance of such MR. Petitioner's reliance on Marikina Valley is misplaced. In that case, the Supreme Court did not rule that the MR therein was pro forma as it found that the arguments repeated were not touched upon by the trial court. Whereas, in this case, petitioner's MR before the Second Division was declared pro forma not simply because of the recycled arguments that were already resolved and passed upon but also because the MR failed to identify the specific findings or conclusions in the Second Division's Decision that lacked evidentiary support or were contrary to law. The MR failed to cite any testimonial or documentary evidence, or or legal conclusions. t any statutory provisio!"l, that contradicted the Second Division's factual 10 Supra at note 8. " Division Docket (CTA Case No. I 0252). Volume Y. pp. 2 I 77-2 I 86. " [_; G.R. No. I 10801.08 December 1995. Supra at note .:2. " Supra at note 4.

RESOLUTION CTA EB NO. 3035 (CTA Case Nos. 10252 & 10297) Commissioner of Internal Revenue v. Petron Corporation Page 4 of9 x---------------------------------------------x Second, the instant MR' 5 warrants outright denial not only for being pro forma but for falling short as well of the requirements of an MR under Section 2, ' 6 Rule 37' 7 of the Rules of Civil Procedure (RCP), as amended. Moreover, apart from challenging the finding that petitioner's MR before the Second Division' 8 was pro forma, respondent merely reiterates an argument that the Court En Bane has already thoroughly considered and rejected. Thus, petitioner presents no new matter offact or law that would justify the reconsideration of the assailed Decision.' 9 Third, assuming arguendo that the instant MR may be given due course, the Court En Bane did not commit any error in its assailed Decision, which is wholly consistent with the Supreme Court's final judgment in the 2023 case of Petron Corporation v. Commissioner of Internal Revenue 20 (Petron). Specifically, the Court En Bane correctly ruled that alkylate is not a product of distillation and is not similar to naphtha or regular gasoline. In Petron, the Supreme Court categorically held that "it is incorrect to say that both raw materials [i.e., olefins and isobutane] utilized to produce alkylate are products of distillation, much more to declare alkylate as a product of distillation simply because its raw materials are produced through distillation. To be sure, [Section 148(e) of the NIRC of 1997, as amended], imposes excise tax on naphtha, regular gasoline, and other similar products of distillation only, and not on the raw materials or ingredients used for their production." The Supreme Court has also declared in Petron that"[ c]onsidering the intended purpose and nature of alkylate, it certainly cannot be placed under the same category as naphtha and regular gasoline." t 15 Supra at note 1. "' Section 2. Contents of'molionjhr 17<__.1!' 1riul or reconsideration and notice thete(~t:- The motion shall be made in writing stating the ground or grounds therefor_ a written notice of which shall be served by the movant on the adverse pany. A motion for reconsideration shall point out specifically the findings or conclusions of the judgment or tinal order which are not supported by the evidence or which are contrary to law. making express reference to the testimonial or documentary evidence or to the provisions of law alleged to he contrary to such findings or conclusions. A proj(;rma motion for new trial or reconsideration shall not toll the reglementar) period of appeal. (Emphasis supplied) ~L \1 Jl{lc\L 01{ Kl CONSIIJLI{:\ 110"\. Supra at note II. Supra at note 4. ~(I G.R. No. 255961. 20 March 2023.

RESOLUTION CTA EB NO. 3035 (CTA Case Nos. 10252 & 10297) Commissioner of Internal Revenue v. Petron Corporation Page 5 of9 x---------------------------------------------x We resolve. A simple cursory review of the instant MR 2 ' immediately reveals that, apart from challenging the finding that his or her MR before the Second Division 22 was pro forma, petitioner merely reiterates arguments that the Court En Bane has already exhaustively considered and passed upon in its assailed Decision. 23 With the arguments being essentially the same, We deem it no longer necessary to reiterate the Court En Bane's pronouncement in the assailed Decision. As regards petitioner's insistence that his or her MR before the Second Division should not be declared as pro forma, the Court En Bane sustains such finding and agrees with respondent that petitioner's reliance on Marikina Valley is misplaced. Indeed, the mere repet1t10n of arguments does not, by itself, automatically render an MR pro forma. Jurisprudence recognizes that an MR necessarily seeks to convince a court to revisit and reverse its earlier ruling and, in that sense, may discuss issues that the court has already addressed. However, such recognition does not dispense with the requirement that the motion must specifically identify the factual findings or legal conclusions alleged to be erroneous and present substantial grounds demonstrating why reconsideration is warranted. 24 Respondent correctly points out that the circumstances in Marikina Valley differ significantly from those obtaining in the present case. There, the Supreme Court declined to characterize the MR as pro forma because the arguments reiterated by the movants had not been squarely addressed by the trial court in the therein assailed decision. In contrast, the Court En Bane did not declare petitioner's MR before the Second Division 25 pro forma merely because it repeated arguments that the Second Division had already considered and rejected. Rather, the Court En Bane found that petitioner's MR before the Second Division failed to comply with the fundamental requirements governing an MR. Specifically, petitioner failed to identify particular findings or t " Supra at note I. Supra at note I I. Supra at note 4. St:t: l"alr.:nc.:ia rBukidnullJ rurmcrs ('ooJh.:rurin: .\farketing A:ssuciation. Inc. r. Heir,~ (~{Anwnte P. (_ 'ahoh{ie. G.R. No. 219984 (Resolution). 03 April 2019. citing Teodulo i\1. ( 'oquilla \'. The Hon. Commission on Flectiom· and Air. \'ei/ .\/. ...Jirare::. G.R. No. 151914. 31 July 2002. Supra at note II.

RESOLUTION CTA EB NO. 3035 (CTA Case Nos. 10252 & 10297) Commissioner of Internal Revenue v. Petron Corporation Page 6 of9 X---------------------------------------------X conclusions in the Second Division's Decision dated 14 August 2024 26 that allegedly lacked evidentiary support or ran contrary to law. Neither did petitioner cite any testimonial or documentary evidence, nor any statutory provision or jurisprudential authority, that would negate or contradict the Second Division's factual and legal conclusions. As such, petitioner's MR before the Second Division did not meaningfully challenge the bases of the Decision dated 14 August 2024 sought to be reconsidered and merely rehashed matters that the Second Division had already resolved. In this regard, respondent correctly points out that the Court En Bane's declaration that petitioner's MR before the Second Division is pro forma and so it failed to suspend or toll the running of the reglementary period to appeal. As a result, the Second Division's Decision attained finality. Once a judgment becomes final and executory, the Court loses jurisdiction to amend, modifY, or revisit the same, except in narrowly defined instances that do not obtain in this case. 27 Hence, petitioner cannot circumvent the finality of the Second Division's Decision dated 14 August 2024 by repeatedly raising the same arguments that the Court En Bane has already considered and rejected. 28 Moreover, the instant MR itself suffers from the same infirmities that attended petitioner's MR before the Second Division. In Shangri-la International Hotel Management, Ltd., et a/. v. Developers Group of Companies, Ine., 29 the Supreme Court made clear that it is incumbent upon the movant to raise substantially plausible matters to warrant the relief sought, thus: The bulk of the aforementioned grounds is a mere rehash of movant's previous arguments. While DGCl is correct in stating that a motion for reconsideration, by its very nature, may tend to dwell on issues already resolved in the decision sought to be reconsidered and that this should not be an obstacle for a reconsideration, the hard reality is t Division Docket (CTA Case No. 1025::>). Volume V. pp.2162-2175. Penned by Associate Justice Maria Rowena Modesto-San Pedro. concurred in by Associate Justice Ma. Belen M. Ringpis-Liban and Associate Justice Corazon G. Ferrer-Flares. See ,\/ercmy Drug Corporcflion and Rolando J Del Rosario r . .Sjmuses Richard r. Huanx & Carmen 0. Huang. and Stephen CJ. Huong. G.R. No. 197654. 30 August 2017. Supra at note I. G.R. No. 159938.12 January 2007. - - - · - · - - -

RESOLUTION CTA EB NO. 3035 (CTA Case Nos. 10252 & 10297) Commissioner of Internal Revenue v. Petron Corporation Page 7 of9 X---------------------------------------------X that movant has failed to raise matters substantially plausible or compellingly persuasive to warrant the desired cause of action. Considering that the grounds presently raised have been sufficiently considered, if not squarely addressed, in the subject Decision, it behooves movant to convince the Court that certain findings or conclusions in the Decision are contrary to law. As it is, however, the instant motion does not raise any new or substantial legitimate ground or reason to justifY the reconsideration sought. Here, petitioner has likewise failed to demonstrate any substantial factual or legal basis that would justify a reversal of the assailed Decision. 30 The instant MR 3 ' does not identify any specific finding or conclusion in the assailed Decision that lacks evidentiary support or contravenes applicable law. Neither does it point to any evidence, statutory provision, or controlling jurisprudence that the Court En Bane overlooked or misapprehended. Instead, petitioner merely quotes, without explanation or context, the Court En Bane's Decision in CTA EB Case No. 2425, thereby reiterating arguments that the Court En Bane has already considered and rejected. Further, as also correctly pointed out by respondent, the instant MR fails to comply with Section 2, 32 Rule 3733 of the RCP, as amended. It neither specifies the findings or conclusions in the assailed Decision that are unsupported by evidence or contrary to law, nor cites any evidence or legal authority inconsistent with the Court En Bane's findings. Consequently, petitioner failed to discharge the burden of showing compelling grounds for reconsideration. Clearly, based on the Supreme Court's ruling in Petron, alkylate is not among the articles covered by Section 148(e) 34 of the NIRC of 1997, as amended, as it does not fall under the category of "other similar products of distillation" subject to excise tax. Moreover, Section 148(e) 35 of the NIRC ofr997, as amended, imposes excise tax on naphtha, regular gasoline, and other similar products of distillation only, and not on the raw materials or ingredients used for their production. _10 Supra at note -l-. .11 Supra at note l. Supra at note 16. Supra at note 17. Supra at note 8. Id.

RESOLUTION CTA EB NO. 3035 (CTA Case Nos. 10252 & 10297) Commissioner of Internal Revenue v. Petron Corporation Page 8 of9 x---------------------------------------------x respondent's excise tax payments upon its importation of alkylate are deemed illegal and erroneous. Accordingly, there being no new matters raised that would warrant a re-examination of the Court En Bane's ruling, petitioner's "Motion for Reconsideration (Re: Decision promulgated 28 January 2026)" is hereby DENIED for lack of merit. SO ORDERED. JEAN MARl WE CONCUR: ~,~1- MA. BELEN M. RINGPIS-LIBAN MARIA ROWENA 'v'" '"' Associ -- 0-SANPEDRO ce ~ ~ f. ~ ~ Fa;er.._rJJ:J MARIAN IVYGI. REYE#-FAJAitDo Associate Justice LAN~~ Associate Justice

RESOLUTION CTA EB NO. 3035 (CTA Case Nos. 102-52 & 10297) Commissioner of Internal Revenue v. Petron Corporation Page 9 of9 x~--------------------------------------------x HENRY~GELES Associate Justice • DEBBI I AN I. CENTENO-DIJAMCO Associate Justice