TAGANITO MINING V.

CIR

Facts:
 Petitioner is a corporation duly organized and existing under the laws of
the Philippines. It is primarily engaged in business as a producer and
exporter of Beneficiated Nickel Silicate Ores (BNSO) and Chromite Ores
(CO).
 July-Dec 1990: petitioner shipped a total of 157,323 wet metric tons
(WMT) of BNSO to Nissho Iwai Corp. and 12, 131 WMT of CO to Yonasho
Corp. It also paid the corresponding 5% excise tax within the date
required.
 Petitioner filed a claim for refund of alleged overpaid excise tax.
o It claims that the excise tax paid was based on the value at the time
of payment, rather than the actual market value of the gross output
of minerals at the time of their removal or export.
o It also claims that it used the exchange rate at the time of
remittance instead of the exchange rate at the time of removal
o It also claims that the basis for the excise tax payments were the
amounts stated in the final invoice for each shipment
 Petitioner filed a petition for review with the CTA for refund of Php 135,
495.18.
 Petitioner filed an Amended Petition seeking this time the amount Php
298, 021.69.
 Respondent on the other hand claims that the petition should be
dismissed for petitioner’s failure to prove entitlement to the claim for
refund.

Issue and Held:

 WoN petitioner is entitled to a refund representing overpaid excise tax-
YES.
o PET: The basis for computing should be the actual market value of
the shipments at the time of removal.
o SC: Sec. 151(a)(3) of the Tax Code and all the evidence presented
by petitioner bolster its claim for refund in the amount of Php
135.495.18.
o Excise taxes are paid on goods manufactured or produced in the
PH for domestic sale or consumption or for any other disposition
and to things imported. They are classified into 2:
 Specific Tax- excise tax based on weight or volume capacity
or any other physical unit of measurement.
 Ad Valorem Tax- excise tax based on selling price or other
specified value of the goods. (The case at bar falls under this
category.)
o Excise tax is basically a severance tax, that is, a tax on the
privilege of severing or extracting minerals from the earth, and is
 due and payable upon removal of the mineral product from its bed
or mines.
o Republic Cement Corp. v. CIR: Ad valorem tax is computed on the
actual market value of the minerals or mineral products extracted or
produced from all mineral lands.
o CIR v. CA and Atlas: Said tax becomes due and payable only upon
removal of the same from the locality where mined.
o In the case at bar, since the conversion rate of USD to PHP is
lower at the time of removal from the mines as compared to the
conversion rate at the time of payment based on the Credit
Advice/Memo from the local banks, there was indeed an
overpayment. The correct basis is the actual market value at the
time of removal.
 WoN petitioner is entitled to the amount claimed in the Amended Petition
instead of the initial claim- NO.
o The claim for refund should first be filed with the CIR, and the
subsequent appeal to the CTA must be instituted within the 2 year
period. If the Commissioner takes time in deciding the claim, and
the 2 year period is about to end, the suit or proceeding must be
started in the CTA before the end of the 2 year period without
awaiting the decision of the Commissioner.
o Since the petition for review is on the appeal level, the Cour can
only take cognizance of the amount claimed for refund in the
administrative level. However, the claim was not refunded in such
level. It was only after petitioner had formally offered its evidence
did it file a motion to admit its amended petition for review.
o A written claim for refund filed by the taxpayer with the
Commissioner is a condition precedent to the filing of a petition for
review with the CTA.

Ruling:
 Petition partly granted.