CIR v Manila Mining CorporationG.R No.

153204August 31, 2005

Facts:
The respondent is a VAT- registered corporation that engaged in the sale of gold to theCentral Bank
amounting to P200,832. Seeking for tax refund/credit of the input VAT it paidpursuant to Sec. 2 of E.O
581, the respondent file an application for tax refund.
As CIR failed to act upon respondents application within sixty (60) days from the dates
of filing, the respondent filed a petition for review with the CTA, seeking the issuance of taxcredit
certificates.
Nonetheless, the CTA denied the respondents claim for refund of input VAT for failure
to prove that it paid the amounts claimed as such for the year 1991, no sales invoices, receiptsor other
documents as required.The respondent appealed to the CA contending the CTA erred in denying the
refund forinsufficiency of evidence. The CA reversed the decision of the CTA and granted the
respondents claim for refund or issuance of tax credit certificates. In granting the refund, th
eappellate court held that there was no need for respondent to present the photocopies of thepurchase
invoices or receipts evidencing the VAT paid in view of Rule 26, Sec. 2 of the RevisedRules of Court.
Issue:
Whether or not respondent is entitled to a refund/credit despite the lack ofphotocopies of the purchase
invoices or receipts?
Held:
No, the court held that the respondent is not entitled to the refund or credit for failureto provide the
required purchase receipts and invoices. As export sales, the sale of gold to theCentral Bank is zerorated, hence, no tax is chargeable to it as purchaser. Zero rating isprimarily intended to be enjoyed by
the seller-respondent, herein, which charges no outputVAT but can claim a refund of or a tax credit
certificate for the input VAT previously charged toit by suppliers. For a judicial claim for refund to
prosper, however, respondent must not onlyprove that it is a VAT registered entity and that it filed its
claims within the prescriptive period.It must substantiate the input VAT paid by purchase invoices or
official receipts. Therespondent failed to do so. Its contention that the certification of the independent
CPA shouldbe sufficient to establish the purchase invoices cannot be given merit.
Under R.A 1125, the CTA is described as a court of record. As cases filed before it arelitigated
de novo,

party litigants should prove every minute aspect of their cases. Noevidentiary value can be given the
purchase invoices or receipts submitted to the BIR as therules on documentary evidence require that
these documents must be formally offeredbefore the CTA.
[G.R. No. 153866. February 11, 2005]COMMISSIONER OF INTERNAL REVENUE,
petitioner, vs
. SEAGATE TECHNOLOGY(PHILIPPINES),
respondent.

Business companies registered in Special Economic Zone in Naga, Cebu -- are

entities
exempt from AIRT, including the VAT. Although export sales are not deemed exempt
transactions
, they are nonetheless zero-rated. Hence, in the present case, the distinctionbetween exempt
entities
and exempt
transactions
has little significance, because the netresult is that the taxpayer is not liable for the VAT.
The Case
Before us is a Petition for Review
[1]
under Rule 45 of the Rules of Court, seeking to setaside the May 27, 2002 Decision
[2]
of the CA.
The Facts
The CA quoted the facts narrated by the Court of Tax Appeals (CTA), as follows:1.
Seagate

- is a resident foreign corporation duly registered with the SEC to do business inthe Philippines, with
principal office address at theNaga, Cebu;- engaged in the manufacture of recording components
primarily used incomputers for export- April 2, 1997

VAT-registered- June 6, 1997 - registered with the PEZA- April 1, 1998 to June 30, 1999

filed VAT returns- October 4, 1999

filed a claim for refund of VAT input

P P28,369,226.38 withsupporting documents (inclusive of the P12,267,981.04 VAT input taxes subjectof
this Petition for Review)

RDO 83

Talisay, Cebu- BIR no action- July 21, 2000

Seagate elevated the case to CTA by way of Petition for reviewin order to toll the running of prescriptive
period
2. Special and Affirmative Defenses of the BIR:
- the claim for tax refund/credit is subject to administrative routinaryinvestigation/examination by the
BIR.Since taxes are presumed to have been collected in accordance with laws andregulations, the
[respondent] has the burden of proof that the ta
xes sought to berefunded were erroneously or illegally collected;Claims for tax refund/tax credit are construed in strictissimi juris against the
taxpayer. This is due to the fact that claims for refund/credit [partake of] thenature of an exemption
from tax.;- Granting, without admitting, that [respondent] is a Philippine Economic Zone Authority
(PEZA) registered Ecozone Enterprise, then its business is not subjectto VAT. As such, the capital goods

and services it purchased are considered notused in VAT taxable business. Thus, it is not entitled to
refund of input taxes onsuch capital goods pursuant to Section 4.106.1 of Revenue Regulations
No.([RR])7-95, and of input taxes on services pursuant to Section 4.103 of saidregulations.- [Respondent]
must show compliance with the provisions of Section 204 (C) and229 of the 1997 Tax Code on filing of a
written claim for refund within two (2)years fr
om the date of payment of tax.

3. CTAJuly 19, 2001 - granted the claim for refund in the reduced amount of P12,122,922.66. This sum
represented the unutilized but substantiated inputVAT paid on capital goods purchased for the period
covering April 1, 1998 toJune 30, 1999.
ISSUE:
WON Seagate,
a VAT-Registered PEZA Enterprise
is entitled to the refund.
RULING: YES.
Respondent, a VAT-registered enterprise, has complied with all requisites for claiming a tax refund of or
credit for the input VAT it paid on capital goods it purchased.It is not subject to internal revenue laws
and regulations and is even entitled to taxcredits. The VAT on capital goods is an internal revenue tax
from which petitioner as an entityis exempt. Although the
transactions
involving such tax are not exempt, petitioner as a VAT-registered person,
[28]
however, is entitled to their credits.