Section 6 of RA 9334 cannot be considered as an express repeal of the exemptions granted under PAL’s franchise because it fails to specifically identify PD 1590 as one of the acts intended to be repealed.

Philippine Airlines Inc. (“PAL”) was granted a franchise to operate air transport services domestically and internationally by virtue of PD. No. 1590 on January 11, 1978. On January 1, 2005, RA No. 9334 otherwise known as “An Act Increasing the Excise Tax Rates Imposed on Alcohol and Tobacco Products, Amending certain sections of the NIRC”, was enacted. Pursuant to RA No. 9334, and despite the exemption granted to PAL by its franchise under PD. No. 1590, PAL was subjected to excise tax due on its importation of various commissary supplies used in its international flights. PAL paid under protest the said excise taxes.
The CTA en banc ruled that the phrase under section 6 of RA 9334 which states that “the provisions of any special or general law to the contrary notwithstanding” cannot

be considered as an express repeal of the exemptions granted under PAL’s franchise because it fails to specifically identify PD 1590 as one of the acts intended to be repealed. Also, noteworthy is the fact that PD 1590 is a special law, which governs the franchise of PAL. Between the provisions under PD 1590 as against the provisions under the NIRC of 1997, as amended by RA 9334, which is a general law, the former necessarily prevails. This is in accordance with the rule that on a specific matter, the special law shall prevail over the general law, which shall be resorted to only to supply deficiencies in the former. In view on the foregoing and considering the CIR’s failure to prove that the exemption granted to PAL under PD 1590 was already repealed by RA 9334, PAL’s claim for refund must be granted. (Commissioner of Internal Revenue & Commissioner of Customs vs Philippine Airlines Inc (PAL), CTA EB No. 944, December 9, 2013)