For the taxable years of 1995 to 1998, Petron Corporation (herein respondent) had been using Tax Credit

Certificates (TCCs) assigned by them by several BOIregistered entities in payment of its excise taxes. The transfers and assignment of the TCCs where approved by the Department of Finances One Stop Shop InterAgency Tax Credit and Duty Drawback Center (DOF Center), composed of representatives from the appropriate government agencies. The Commissioner of Internal Revenue (herein petitioner) acceptance of the TCCs as payment of the respondents excise tax were continuously approved by the DOF as well as the BIRs Collection Program Division through its surrender and subsequent issuance by the Assistant Commissioner of the Collection Service of the BIR of the Tax Debit Memos (TDMs). However on January 30, 2002, petitioner issued an assessment against petitioner for deficiency excise taxes for the taxable years 1995 to 1998. The deficiency excise taxes was based on the ground that the TCCs utilized by the petitioner have been cancelled by the DOF for having fraudulently issued and transferred. The respondent filed a protest letter to the Assessment but was adversely decided upon by the BIR by serving a Warrant of Distraint and/or Levy upon them. The Court of Tax Appeal- second division denied the petition of the respondent and ordered it to pay the deficiency taxes together with interest and surcharge. The CTA En banc thereafter promulgated a decision which reveres and set aside the decision of the CTA-second division. Hence, this petition by the Commissioner of Internal Revenue. Issue: Are Tax credit certificates subject to a post-audit as a suspensive condition for their validity? Held: TCCs are valid and effective from their issuance and are not subject to a post-audit as a suspensive condition for their validity. Our ruling in Petron finds guidance from our earlier ruling in Shell, which categorically states that a TCC is valid and effective upon its issuance and is not subject to a post-audit. The implication on the instant case of the said earlier ruling is that Petron has the right to rely on the validity and effectivity of the TCCs that were assigned to it. In finally determining their effectivity in the settlement of respondents excise tax liabilities, the validity of those TCCs should not depend on the results of the DOFs post-audit findings.