G.R. No. 184398 February 25, 2010
SILKAIR (SINGAPORE) PTE. LTD., Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent.

FACTS

Petitioner Silkair (Singapore) Pte. Ltd., a foreign corporation organized under Singaporean laws with a Philippine representative office in Cebu City, is an international carrier operating the Singapore-Cebu-Singapore and Singapore-Cebu-Davao-Singapore routes. On June 24, 2002, it filed an administrative claim with the Bureau of Internal Revenue (BIR) for a refund of ₱3,983,590.49 in excise taxes it allegedly erroneously paid on purchases of aviation jet fuel from Petron Corporation from June to December 2000. It based its claim on BIR Ruling No. 339-92 and Section 135(b) of the 1997 National Internal Revenue Code (NIRC), which exempts from excise tax petroleum products sold to entities covered by tax treaties, provided there is reciprocity, invoking the Air Transport Agreement between the Philippines and Singapore. As the BIR took no action, petitioner filed a petition for review with the Court of Tax Appeals (CTA) on June 27, 2002, to prevent the lapse of the two-year prescriptive period. The CTA First Division, in a Decision dated July 27, 2006, found petitioner qualified for exemption under Section 135(b) but denied the claim for failure to present proof that it was authorized to operate in the Philippines during the relevant period, due to the non-admission of certain exhibits (Exhibit “A” SEC Certificate of Registration; Exhibits “P,” “Q,” and “R” CAB operating permits) for being mere photocopies. The CTA First Division denied reconsideration. The CTA En Banc, in its assailed Decision dated May 27, 2008, denied the petition for review, affirming the dismissal on the ground of failure to prove authority to operate and further ruling that petitioner was not the proper party to file the claim for refund. The CTA En Banc denied reconsideration.

ISSUE

1. Whether petitioner has substantially proven its authority to operate in the Philippines.
2. Whether petitioner is the proper party to claim the refund/tax credit of excise taxes paid on aviation fuel.

RULING

The Supreme Court denied the petition, affirming the CTA En Banc’s ruling.
1. On the first issue, the Court held that petitioner failed to prove its authority to operate in the Philippines for the period June to December 2000. Petitioner’s argument that the CTA should have taken judicial notice of its SEC Registration (Exhibit “A”) because it was previously offered and admitted in similar cases was rejected. The Court emphasized that each case is distinct, and it is not mandatory for courts to take judicial notice of evidence offered in other cases. The rules on judicial notice (Sections 2 and 3, Rule 129 of the Rules of Court) are permissive, not mandatory. Petitioner’s failure to formally offer the original or certified true copies of its SEC Registration and CAB operating permits during the trial constituted a failure to prove a crucial factits legal authority to operate. The admission of its Foreign Air Carrier’s Permit (Exhibit “B”) did not cure this defect, as it pertained to a different period and was subject to presidential approval.
2. On the second issue, the Court held that petitioner is not the proper party to claim the refund. Excise tax on petroleum products is an indirect tax, imposed on the manufacturer or producer (Petron Corporation). When the tax is passed on to the buyer (petitioner), it becomes part of the purchase price. The statutory liability for the excise tax falls on the manufacturer, not the purchaser. Therefore, only the manufacturer or producer who directly paid the tax to the government can claim a refund under Section 229 of the NIRC. Petitioner, as the purchaser, is not the taxpayer against whom the tax is assessed and thus lacks legal personality to claim the refund. The Court cited its previous rulings in Silkair (Singapore) Pte, Ltd. v. Commissioner of Internal Revenue (G.R. Nos. 171383 and 172379 and G.R. No. 173594 ) which settled that an international carrier is not the proper party to claim a refund of excise taxes on petroleum products it purchased.