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CIR vs. Cebu PortlandGRN L-29059 December 15, 19!

J. Cruz

"acts# $%e CIR &as ordered to re'und to t%e Cebu Portland Cement Com(an) t%e

amount o' P*59,+0.9, re(resentn over(a)ments o' ad valorem taes on cement(roduced and sold b) t a'ter /ctober 195!. "ollo&n denal o' motons 'orreconsderaton 'led b) bot% t%e (ettoner and t%e (rvate res(ondent, t%e latter moved'or a &rt o' eecuton to en'orce t%e sad udment. $%e moton &as o((osed b) t%e(ettoner on t%e round t%at t%e (rvate res(ondent %ad an outstandn sales talablt) to &%c% t%e udment debt %ad alread) been credted. $%e C$ ranted t%emoton, %oldn t%at t%e alleed sales ta lablt) o' t%e (rvate res(ondent &as stllben uestoned and t%ere'ore could not be set-o'' aanst t%e re'und.

/n reve&, t%e CIR clams t%at t%e re'und s%ould be c%ared aanst t%e ta de'cenc)o' t%e (rvate res(ondent on t%e sales o' cement under 3ecton 14 o' t%e $a Code.

s (oston s t%at cement s a manu'actured and not a mneral (roduct and t%ere'orenot eem(t 'rom sales taes. e adds t%at en'orcement o' t%e sad ta de'cenc) &as(ro(erl) e''ected t%rou% %s (o&er o' dstrant o' (ersonal (ro(ert) under 3ectons *14and *1 o' t%e sad Code and, moreover, t%e collecton o' an) natonal nternal revenueta ma) not be enoned under 3ecton *05, subect onl) to t%e ece(ton (rescrbed nRe(. ct No. 1125. $%e (ettoner also denes t%at t%e sales ta assessments %avealread) (rescrbed because t%e (rescr(tve (erod s%ould be counted 'rom t%e 'ln o't%e sales ta returns, &%c% %ad not )et been done b) t%e (rvate res(ondent.

"or ts (art, t%e (rvate res(ondent dsclams lablt) 'or t%e sales taes, on t%e roundt%at cement s not a manu'actured (roduct but a mneral (roduct. s suc%, t &as

eem(ted 'rom sales taes. lso, t%e alleed sales ta de'cenc) could not as )et been'orced aanst t because t%e ta assessment &as not )et 'nal, t%e same ben stllunder (rotest and stll to be de'ntel) resolved on t%e merts. 6esdes, t%e assessment%ad alread) (rescrbed, not %avn been made &t%n t%e relementar) 've-)ear (erod'rom t%e 'ln o' t%e ta returns.

Issues# 718 %et%er cement be consdered a manu'actured (roduct so as to m(osesales ta u(on t%e cement com(an): 728 &%et%er t%e 'ln o' an ncome ta return beconsdered as substantal com(lance &t% t%e reurement o' 'ln sales ta returns soas to bar t%e (rescr(tve (erod: and, 7*8 &%et%er t%e assessment be en'orced &%lestll ben contested.

Ruln# 718 3ales ta &as (ro(erl) m(osed u(on t%e cement com(an) 'or t%ereason t%at cement %as al&a)s been consdered a manu'actured (roduct and not amneral (roduct. 7Commssoner o' Internal Revenue v. Re(ublc Cement Cor(oraton8.Cement s t%e (roduct o' a manu'acturn (rocess and s no loner t%e ;mneral (roduct;contem(lated n t%e $a Code 7.e.: mnerals subected to sm(le treatments8 'or t%e(ur(ose o' m(osn t%e ad valorem ta.

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728 $%e clam o' t%e (rvate res(ondent t%at t%e 've-)ear relementar) (erod 'or t%eassessment o' ts ta lablt) started 'rom t%e tme t 'led ts ross sales returns on