ISP Tax Exemption for Coastal Maritime Navigation: CAAD Arbitration on Additional Assessment Legality

ARBITRAL DECISION[1]

CLAIMANT: A, LDA

RESPONDENT: Tax and Customs Authority

I - STATEMENT OF FACTS

A) The Parties and the Constitution of the Arbitral Tribunal

1. A Ltd., a legal entity with number ..., with tax domicile at ..., hereinafter referred to as "Claimant", pursuant to the provisions of articles 2, no. 1, letter a), 3, no. 1 and 10, no. 1 letter a) and no. 2, all of Decree-Law no. 10/2011, of 20 January (hereinafter "RJAT"), presented a petition for arbitral pronouncement and requested the constitution of a sole arbitral tribunal.

In the present arbitral petition the Claimant seeks the declaration of illegality of the additional assessment of ISP (Special Consumption Tax on Petroleum Products and Energy), issued by the Tax and Customs Authority, in the amount of €5,048.71, plus interest, as per notification of 09-05-2014, all in the total amount of €5,150.10.

The impugned assessment and its respective justification, which is hereby incorporated in full, are contained in document no. 3 attached to the petition for arbitral pronouncement, presented on 23/10/2014.

The Claimant concludes its arbitral petition by requesting the annulment of the tax assessment impugned due to violation of law.

1. The petition for constitution of the Arbitral Tribunal was presented on 3/09/2014, which was accepted by the Honourable President of CAAD and automatically notified to the Tax and Customs Authority. The Claimant chose not to appoint an arbitrator; therefore, in accordance with the provisions of no. 1, of article 6 of RJAT, the undersigned was appointed by the Ethics Committee of the Administrative Arbitration Centre as arbitrator of the sole Arbitral Tribunal. The appointment was accepted and the parties, notified of the acceptance, did not refuse the appointment, as provided for in letters a) and b), of no. 1, of article 11, of RJAT, in conjunction with the provisions of articles 6 and 7 of the Ethics Code. Thus, in accordance with the provision of letter c), of no. 1, of article 11, of Decree-Law no. 10/2011, of 20 January, as amended by article 228, of Law no. 66-B/2012, of 31 December, the sole Arbitral Tribunal was constituted on 3 November 2014.

2. On 4/11/2014, an arbitral order was issued ordering the notification of the "AT", in accordance with the provision of article 17 of RJAT, to submit its response within the legal deadline, as provided for in nos. 1 and 2, article 17, of RJAT. On 19/01/2015, the AT submitted its Response accompanied by the respective administrative file (AF).

By arbitral order issued on 06/02/2015, the parties were notified to pronounce themselves on the possibility of dispensing with the holding of the hearing provided for in article 18 of RJAT, as well as the presentation of submissions, due to the absence of exceptional issues raised in the proceedings, it appearing unnecessary to conduct further evidence production beyond that which results from the documentary evidence attached to the proceedings and the absence of disagreement regarding the factual matter, whereby the question to be decided is exclusively one of law. Alternatively, a date was also set for the holding of the hearing of article 18 of RJAT.

The parties pronounced themselves, by request attached to the proceedings, agreeing with the dispensing of the holding of the hearing. Accordingly, an arbitral order was issued on 04/03/2015, dispensing with the holding of the hearing, which fixed a deadline of ten consecutive days for the parties to submit, if they so wished, their submissions, the proceedings continuing to final decision.

B) THE PETITION FORMULATED BY THE CLAIMANT

1. The Claimant formulates the present petition for arbitral pronouncement seeking the illegality and consequent annulment of the additional assessment of ISP in the amount of €5,150.10. The arbitral petition presents the following grounds:

a. The Claimant benefited from exemption from ISP, granted by order of 3.01.1998, of the Customs Directorate of ... for supplies of products provided by the vessel "...", registration "...-...-...";

b. On 18 February 2014, the Author was notified of the draft tax assessment, according to which the vessel "..." belonging to the Author, on 18 April 2013 was supplied with approximately 15,000 litres of coloured and marked gas oil (CMG) "intended for coastal navigation", having subsequently performed a displacement to the Canary Islands between 20 April 2013 and 11 May 2013;

c. For that reason the AT considers that the gas oil in question was not used for "coastal navigation", which led to the additional assessment now being challenged;

d. The Claimant argues that, even if it is understood that there was a violation of the provision of article 89, no. 1, letter c), of CIEC, this does not justify any additional assessment of ISP, but only the application of a mere fine; it further argues that the product supplied on 18 April 2013 should have been acquired with the status of "bunker gas oil" which, similarly, enjoys total exemption from ISP, provided for in letter e) of article 6 of CIEC and letter a) of no. 3.2.2.3 of the Manual of IEC;

e. This did not happen solely due to a mere procedural lapse, since the respective customs export declaration was never completed, despite the legal requirements applicable being met.

f. In the Claimant's opinion, in any case, the violation of the provision of article 89, no. 1 c) of CIEC can only be sanctioned in accordance with the provision of no. 6, of article 93, of CIEC, according to which: "The sale, acquisition or consumption of the products referred to in no. 1 in violation of the provisions of nos. 2 to 5 are subject to the sanctions provided for in the General Regime of Tax Violations and in special legislation."

g. It further adds that the "..." displaced itself to the Canaries, solely and exclusively, for the purpose of carrying out improvement work and mandatory periodic inspection of the ship's hull, which is perfectly within the scope of its commercial activity, so that in no case can it be considered that the use of CMG was for "private recreational navigation."

h. The Claimant concludes that the purpose given to the fuel supplied on 18 April 2013 allows access to the total ISP exemption provided for in letter e) of article 6 of CIEC and letter a) of no. 3.2.2.3 of the Manual of IEC, whereby it claims the declaration of illegality of the impugned additional assessment.

C) – THE RESPONSE OF THE RESPONDENT

1. The Respondent "AT" alleges in its response, in defence of the legality of the impugned assessment, that the Claimant has no right. It alleges in summary that:

a. The AT justifies the legality of the assessment by considering that, after documentary review, "navigation between the Autonomous Region of ... and the Canary Islands archipelago cannot be considered as coastal maritime navigation.";

b. According to the AT, the Claimant used products subject to special consumption tax on petroleum products and energy, with exemption from that tax because they were declared for coastal maritime navigation, for a purpose or destination different from that declared and authorized in the tax benefit process.

c. Indeed, according to the AT, the Claimant used products subject to special consumption tax on petroleum products and energy, with exemption from that tax because they were declared for coastal maritime navigation, for a purpose or destination different from that declared and authorized in the tax benefit process.

d. It further adds that, having supplied, on 18 April 2013 the vessel "...", with 14,937 litres of coloured and marked gas oil, having been expressly declared that the said product would be "(...) intended for coastal navigation, could not subsequently allocate it to a destination different from that declared;

e. Since the Claimant used it in the operation of the vessel "..." from the RA... to the Canary Islands."

f. It concluded, therefore, that "there are no doubts that the product acquired with ISP exemption, under the provision of letter c) of no. 1 of article 89 of CIEC was not used in coastal maritime navigation, having been used for a purpose different from that authorized."

g. Thus, the provision of article 89, no. 1 c) of the Special Consumption Tax Code (CIEC) was violated, which led to the issuance of the additional assessment now being impugned.

1. It concludes, for the rejection of the arbitral petition, seeking the legality of the impugned tax acts and the acquittal of the Respondent AT in the petition.

D) PROCEDURAL REQUIREMENTS

1. The Arbitral Tribunal is regularly constituted and is materially competent, in accordance with article 2, no. 1, letter a) of Decree-Law no. 10/2011, of 20 January.

2. The Parties enjoy legal personality and capacity, are legitimate and are duly represented (articles 4 and 10, no. 2, of DL no. 10/2011 and article 1, of Ordinance no. 112/2011, of 22 March).

The proceedings do not suffer from nullities that would invalidate them and no exceptions have been raised that would prevent judgment on the merits of the case, so the Tribunal is in a position to deliver the arbitral decision.

II. QUESTION TO BE DECIDED

1. Given the positions of the Parties assumed in the arguments presented, it is incumbent upon the Tribunal to decide the question of whether the tax exemption granted to the Claimant is maintained in the present proceedings, since, having been acquired for coastal navigation it was used for another purpose, in this case for a displacement to the Canaries. The question involves analysing the regime and scope of the exemption in question, the concept of "coastal maritime navigation", as well as determining whether navigation between the Autonomous Region of ... and the Canary Islands archipelago falls within or outside this concept of coastal navigation.

2. The question at issue involves the analysis of the legal provisions of CIEC applicable to the exemption in question, namely the provision of article 89 of CIEC.

III – FACTUAL MATTER

A) Proven facts

1. As factual matter relevant to the decision to be delivered, the Tribunal considers the following facts proven:

a. The company A, LDA, hereinafter Author, benefits from exemption from ISP, granted by order of 3.01.1998 of the Customs Directorate of ... for supplies of products provided by the vessel "...", registration "...-...-...".

b. On 18 April 2013, that vessel was supplied with approximately 14,937 litres of coloured and marked gas oil (CMG) "intended for coastal navigation";

c. The product was acquired with tax exemption (ISP), because it was declared that it was intended for coastal maritime navigation,

d. Subsequently to the supply carried out, the vessel performed a displacement to the Canary Islands, between 20 April 2013 and 11 May 2013;

e. The "..." displaced itself to the Canaries for the purpose of carrying out improvement work and mandatory periodic inspection of the ship's hull, which is perfectly within the scope of its commercial activity, as results from the invoices attached to Document no. 2, attached to the AP;

f. It results from the said invoices that the "..." was under repair during the days 22/04/2013 to 9/05/2013;

g. On 18 February 2014, the Claimant was notified of the draft tax assessment under discussion in the present proceedings;

h. On 5 March 2014, the Claimant presented a response in the prior hearing, as results from document no. 2 attached to the AP, which is hereby incorporated in full;

i. On 12 May 2014, the Author was notified of the final decision issued as part of the control process carried out by the Customs of ..., as per the document attached as no. 3;

j. The Claimant proceeded to pay the assessed tax, as per receipt attached to the proceedings as document no. 8 attached to the AP

B) Facts not proven

1. There are no facts relevant to the decision to be considered as not proven.

C) Justification of the proven factual matter

1. The facts proven, as described above, are based on the documentary evidence that the Parties submitted to the present proceedings, the documents submitted to the proceedings by the Claimant and those contained in the AF submitted by the AT, the authenticity and correspondence to reality of which were not questioned.

IV – LEGAL MATTER

1. Once the factual matter is established, it is necessary to address the sole legal question under discussion in the present proceedings, corresponding, in summary, to the question of illegality raised by the Claimant in the present arbitral petition.

It is necessary to decide.

1. The question that is the subject of the present action is to analyse the exemption from ISP that the Claimant benefits from and, considering the specificities of the case and the applicable legal rules, to assess the legality of the impugned tax assessment.

2. Article 88, no. 1, letter a) of CIEC, provides, under the heading "Objective Scope", that: "the following are subject to the special consumption tax on petroleum products and energy: petroleum products and energy products", further clarifying, in no. 2, some of the products that are to be "qualified as petroleum products and energy products".

3. However, the law provides for exemptions from the tax which are referred to in article 89 of CIEC.

As is relevant to the present decision, it is important to take into account that this article provides that:

"1- The following petroleum products and energy products are exempt from the tax, provided that:

a) They are used for purposes other than as fuel or as combustible, except as regards lubricating oils classified by NC codes 2710 19 81 to 2710 19 99;

b) (…)

c) They are used in coastal maritime navigation and inland navigation, including fishing and aquaculture, but with the exception of private recreational navigation, with respect to products classified by NC codes 2710 19 41 to 2710 19 49 and 2710 19 61 to 2710 19 69;

d) (…)

(…)

4 - For the purposes of application of letter c) of no. 1, "private recreational navigation" is understood to mean the use of a vessel by its owner or by a natural or legal person, which may use it by way of lease or otherwise, for non-commercial purposes and, in particular, for purposes that are not the transport of persons or goods or the provision of services for consideration or in the interest of public authorities.

(…)

7 - The exemptions provided for in letters a), c), d), e), f), h), i) and j) of no. 1 and in letters a), c) and e) of no. 2 depend on prior recognition by the competent customs authority."

1. Still with relevance to the present decision, it is necessary to consider the provision of article 93 of CIEC, which provides:

"1 - Gas oil, heating gas oil and coloured and marked petroleum are taxed at reduced rates with the additives defined by ordinance of the Government member responsible for the finance area.

2 - Coloured and marked petroleum can only be used in heating, lighting and in the uses provided for in no. 3.

3 - Coloured and marked gas oil can only be consumed by:

a) Stationary motors used for irrigation;

b) Vessels referred to in letters c) and h) of no. 1 of article 89;

c) Agricultural tractors, combine harvesters, motor tillers, motor hoes, motor reapers, self-propelled potato harvesters, pea harvesters, forage harvesters for silage, tomato harvesters, conditioner swathers, wine harvesting machines, fruit harvesting trunk vibrators for olive harvesting and other fruits, as well as other equipment, including those used for aquaculture activity, approved by ordinance of the Government members responsible for the finance, agriculture and sea areas;

(Amended by Law no. 83-C/2013, of 31 December)

d) Rail transport vehicles for passengers and goods;

e) Fixed motors;

f) Autonomous refrigeration motors, installed in heavy goods vehicles for the transport of perishable goods, fed by separate fuel tanks, and which have ATP certification (Perishable Transport Agreement), as to be defined in an ordinance of the Government members responsible for the finance, agriculture and transport areas.

4 - Heating gas oil can only be used as industrial, commercial or domestic heating fuel.

5 - Coloured and marked gas oil can only be acquired by holders of the electronic card instituted for the purpose of controlling its allocation to the destinations referred to in no. 3, being responsible for the payment of the amount of tax resulting from the difference between the level of taxation applicable to road gas oil and the rate applicable to coloured and marked gas oil, the owner or legal manager of the authorized public sales points, in relation to the quantities they sell and which are not properly recorded in the electronic control system.

(Amended by Law no. 64-B/2011, of 30 December)

6 - The sale, acquisition or consumption of the products referred to in no. 1 in violation of the provisions of nos. 2 to 5 are subject to the sanctions provided for in the General Regime of Tax Violations and in special legislation.

7 - For the purposes of this article, fixed motors are understood to be motors intended for energy production and which, cumulatively, are installed on immovable platforms.

8 - Until there are technical conditions for the implementation of heating gas oil with the characteristics provided for in annex VI of Decree-Law no. 89/2008, of 30 May, coloured and marked gas oil classified by NC codes 2710 19 41, 2710 19 45 and 2710 19 49 may be used in the Autonomous Region of ...

9 - In the acquisition of coloured and marked gas oil in the Autonomous Region of ... the use of the electronic card is dispensed with, until there are the technical conditions described in the previous number."

1. From the wording of the law it follows that the prerequisite for the exemption of coloured and marked gas oil (CMG) is based on the use given to the product, namely that provided for in letter c) of article 89, that is, that it is intended for coastal and inland navigation, with the exception of recreational navigation.

It is thus clear the purpose of this normative provision, enshrined in letter a), of no. 1 of article 89 of CIEC, which aims to encourage and stimulate commercial activity in present circumstances and combat fraud, which is likewise evidenced and reinforced in the condition of exception referred to in the law ("with the exception of recreational navigation").

1. Thus, the purpose given to the CMG, that is its use in coastal maritime navigation (with the exception of recreational navigation) is an essential prerequisite for the exemption to be realized. The legislator was clear in establishing the prerequisite for the exemption from tax to be able to operate, as well as in excepting recreational navigation from the scope of the exemption, preventing fraud situations.

It is further added that the exemption in question depends on the recognition provided for in no. 7, of article 89 of CIEC, that is, on prior recognition by the competent customs authority.

1. In the case under consideration, as results from the proven factual matter, the Claimant fulfils this latter condition, since it benefits from exemption from ISP granted by order of 3.01.1998 of the Customs Directorate of ... for supplies of products provided by the vessel "...", with registration ...-...-.... This is a recognition which, relating to the exemption of the products in question, takes into account the status of the acquirer of these products, the scope of the activity undertaken and the legal conditions for their use.

2. In the present proceedings, the Claimant proved that the displacement to the Canary Islands was intended for the purpose of carrying out improvement work and mandatory periodic inspection of the ship's hull, which was carried out between 22-04-2013 and 09-05-2013, as per invoices contained in document no. 2, attached to the AP. It was also proved that the improvement work and periodic inspection were carried out during a large part of the period relating to the displacement carried out.

3. However, no. 4 of the same article 89 also states that "for the purposes of application of letter c) of no. 1, "private recreational navigation" is understood to mean the use of a vessel by its owner or by a natural or legal person, which may use it by way of lease or otherwise, for non-commercial purposes and, in particular, for purposes that are not the transport of persons or goods or the provision of services for consideration or in the interest of public authorities.

4. The trip to the Canaries was intended for the purpose of carrying out the improvement work and periodic inspection mentioned and documented in these proceedings, from which it is concluded that the purpose of the trip was not "exclusively private recreational", being intended to carry out the interest of the activity developed by the company.

However, this is a condition of exception, that is, if verified, it excepts the application of the tax benefit, however, this is not the legal prerequisite for its recognition.

1. Having reached this point, it remains to analyse the essential question of whether the legal prerequisite of the exemption is met, that is, whether the product (CMG) was intended for coastal or inland navigation. At this point, some doubts arise which, according to the understanding of the AT, determined the impugned assessment, since in its assessment the displacement to the Canaries exceeds the concept of "coastal navigation". Let us see if it is right or if, on the contrary, the Claimant is right.

2. It is incumbent upon this Arbitral Tribunal to assess the legality of the ISP assessment, the question being essentially to determine whether the displacement to the Canaries met or did not meet the legal prerequisite of the exemption granted, that is, whether it may be included in the concept of coastal or inland navigation.

3. Article 89, no. 1, letter c), establishes the exemption from tax for the product designated as coloured and marked gas oil (CMG) which, provided that, is used in coastal maritime navigation and inland navigation, including fishing and aquaculture, but with the exception of private recreational navigation. We have already seen that the use of the product was not intended for a recreational trip, but it also cannot be fitted into the concept of coastal inland navigation. A fact, moreover, which the Claimant itself admits when referring to the fact that, in truth, such purpose could be fitted into the "bunker gas oil" regime, although by lapse it did not make the necessary customs export declaration, which did not occur.

4. With the entry into force of the New Special Consumption Tax Code (CIEC) approved by Decree-Law no. 73/2010 of 21 June, the exemption from ISP on gas oil for use in coastal maritime navigation came to be provided for in article 89 of the Code, and Ordinance 117-A/2008 remained in force. The verification of the tax benefits in question continues to have as its regulatory framework the said Ordinance, on which there has been extensive case law on its constitutionality, and it is settled that its regulatory provisions must be interpreted and applied in accordance with the Constitution.

5. The application of tax benefits legally provided for obeys the principles provided for in CRP (Portuguese Constitution), namely the principle of legality provided for in article 103 of CRP and also the principles provided for in LGT (General Tax Law) and in the Tax Benefits Statute, namely that provided for in article 14, no. 1. Compliance with the principle of legality binds the AT and taxpayers, with regard to compliance with the legal prerequisites of the exemption.

6. Finally, it is also necessary to consider EU Directive 2008/118/EC of the Council, of 16 December 2008, relating to CIEC, which is an important aid for the realization of the concept of coastal maritime navigation, considering the Canary Islands archipelago, despite being part of the Kingdom of Spain, as a fiscally third territory for the purposes of harmonized special consumption taxes.

7. As to the concept of coastal navigation, from what is alleged in the arbitral petition and in the response it is concluded that the concept enshrined in article 27 of the General Regulation of the Harbour Authorities is recognized as settled, including for vessels registered in the Autonomous Region of ... navigation between the islands of ..., ..., ... and ....

8. Since navigation between the archipelago of ... and the Canaries does not, in any way, fall within the concept of coastal navigation, it is necessary to conclude that the fundamental prerequisite for the granting of the exemption is not met.

9. However, the non-fulfilment of the prerequisite or prerequisites of the tax benefit of exemption from tax constitutes a tax fact, giving rise to the restoration of the taxation that would exist were it not for the exemption, as is evident from the provision of article 88 of CIEC (rule of incidence) and article 14, no. 1 of EBF (Tax Benefits Statute).

This latter normative provision provides as follows:

Article 14
Extinction of tax benefits

1 - The extinction of tax benefits results in the automatic restoration of standard taxation.

2 - Tax benefits, when temporary, lapse by the expiry of the period for which they were granted and, when conditional, by the occurrence of the prerequisites of their resolutive condition or by non-compliance with the obligations imposed, imputable to the beneficiary.

3 - When the tax benefit relates to the acquisition of goods intended for the direct realization of the aims of the acquirers, it ceases to have effect if they are alienated or given another purpose without authorization of the Minister of Finance, without prejudice to other sanctions or different regimes established by law.

4 - The administrative act granting a tax benefit is not revocable, nor may the respective concession agreement be rescinded, or the rights acquired be diminished, by unilateral act of the tax administration, except if there is non-compliance imputable to the beneficiary of the obligations imposed, or if the benefit was unduly granted, in which case such act may be revoked.

5 - In the case of permanent or temporary tax benefits dependent on recognition by the tax administration, the administrative act granting them ceases its effects in the following situations:

a) The taxpayer has ceased to pay any tax on income, expenditure or patrimony and the contributions relating to the social security system, and the situation of non-compliance is maintained;

b) The tax debt was not subject to claim, objection or opposition, with the provision of adequate guarantee, when required.

6 - Where the situations provided for in letters a) and b) of the previous number occur, automatic benefits do not produce their effects in the year or taxation period in which their prerequisites occur.

(…)

1. Article 89, no. 1, letter c) and no. 4, of CIEC, introduces a problem of proof of the requirements for the exemption. And, faced with the principle of tax legality, it is not up to the interpreter or applier of the norm, in view of the principle of legality, proclaimed in article 103 of the Constitution of the Portuguese Republic, to exceed what is provided for in the law.

2. The said article 103 establishes, in its nos. 2 and 3, the following:

"2. Taxes are created by law, which determines the incidence, the rate, the tax benefits and the guarantees of taxpayers.

1. No one can be obliged to pay taxes that have not been created in accordance with the Constitution, that have a retroactive nature or whose assessment and collection are not carried out in accordance with the law."

2. As can be seen, the principle of tax legality, in accordance with the provisions of the Constitution, applies, in the first place, to the «incidence, the rate, the tax benefits and the guarantees of taxpayers». The law is not only a limit to the action of the Administration: it is also the foundation of administrative action. This means that the AT is bound to comply with the prerequisites contained in the law, namely, regarding tax benefits. The Administration can only do what the law allows it to do, which in the specific case of the exemption from tax in question presupposed that it would have been used in inland coastal navigation, which did not occur.

3. As to the exemption benefit that the Claimant could benefit from by virtue of the destination of the product being capable of being fitted within the "bunker gas oil" regime, this presupposed that the Claimant proceed with the necessary customs export declaration in accordance with legal requirements, which also did not occur. It is true that the Claimant itself admits that this occurred by lapse, however, lapses or errors can be corrected by the proper procedural means.

4. It is certain that, also for this reason, in the terms in which it is alleged, it does not appear that any illegality results for the impugned tax assessment.

5. But the Claimant argues in defence of the alleged exemption that the CMG declared as acquired for coastal maritime navigation and actually intended for the trip to the Canaries was largely consumed in the area that should be considered as a coastal maritime area and the rest in an area by which it could benefit from the "bunker gas oil" regime, and concludes, in this way, by seeking the maintenance of the exemption.

6. Indeed, it does not appear that the Claimant is right, and first and foremost because there are irregularities in the purposes of the acquisition of the product that should not be ignored. In fact, the legislator provides for the two situations mentioned but each of them has a different purpose and functions and essential formalities to be complied with from the declarative point of view equally different, to which the taxpayer is obliged.

7. Thus, it is verified that the CMG acquired was intended for a displacement outside the limit considered as coastal maritime navigation, if it was intended for a displacement to third territory which was planned in advance and with prior preparation, since it was intended to carry out an improvement intervention and periodic inspection, so the Claimant should have ensured all the legal formalities required that would have allowed it to benefit from the exemption from tax. This did not occur, so the purpose of the destination of the product was not the one declared and the procedure which could have allowed it to benefit from the exemption as "bunker gas oil" was not followed, so it does not appear that the assessment is illegal.

8. Furthermore, when it is found that the legal prerequisite for the exemption is not met, there is no alternative for the AT but to apply the law, namely the principle contained in article 14 of the Tax Benefits Statute ceases the exemption, so it must assess the tax in the terms in which it would be due. As is evident from the provision of article 9, no. 1, letter f) and no. 2, letter c) of CIEC, as well as in nos. 11, 12 and 13 of Ordinance no. 117-A/2008, the violation of the prerequisites of the ISP exemption tax benefit constitutes a tax fact and gives rise to the restoration of the standard taxation for the exempt product. The same solution follows from the provision of article 14, no. 1 of EBF.

9. In this regard, it does not appear that the impugned tax assessment seems illegal, so the challenge must fail.

10. Finally, considering the alleged error in the statement which, by lapse, may have affected the Claimant, namely, the error in the statement made regarding the purpose of the destination of the product and the consequent lack of the customs export declaration which could, if properly requested and proved, have the same effect, that is, the exemption from tax by benefiting from the "bunker gas oil" regime, it will be said that the challenge to the assessment does not appear as the procedurally appropriate means for the correction of errors imputable to the Claimant.

11. For all that has been set out above, it is concluded that the arbitral petition is unfounded.

12. There do not appear to be any other relevant issues raised by the parties.

V - DECISION

Given the foregoing, this Arbitral Tribunal decides:

a) To dismiss the petition for arbitral pronouncement as unfounded.

b) To condemn the Claimant to payment of the costs of the present proceedings.

Process value: In accordance with the provisions of articles 305, no. 2, of CPC (Portuguese Code of Civil Procedure), article 97-A, no. 1, letter a), of CPPT (Portuguese Code of Tax Procedure) and article 3, no. 2 of the Cost Regulation in Tax Arbitration Proceedings, the process is fixed at the value of €5,150.10.

Costs: In accordance with the provisions of no. 4, of article 22, of RJAT and in accordance with Table I attached to the Cost Regulation in Tax Arbitration Proceedings, the amount of costs is fixed at €612.00, to be borne by the Claimant.

Register and notify.

Lisbon, 28 April 2015

Arbitrator,

(Maria do Rosário Anjos)

[1] The present decision is written in accordance with the old orthography.