SECOND DIVISION
CONTEX
CORPORATION,
Petitioner,
G.R.
No.
151135
July 2, 2004
-versus-
HON. COMMISSIONER
OF INTERNAL REVENUE,
Respondent.
D E C I S I
O N
QUISUMBING, J.:
For review is the decision[1]
dated September 3, 2001, of the Court of Appeals, in CA-G.R. SP No.
62823,
which reversed and set aside the decision[2]
dated October 13, 2000, of the Court of Tax Appeals (CTA). The
CTA
had ordered the Commissioner of Internal Revenue (CIR) to refund the
sum
of P683,061.90 to petitioner as erroneously paid input value-added tax
(VAT) or in the alternative, to issue a tax credit certificate for said
amount. Petitioner also assails the appellate court’s Resolution,[3]
dated December 19, 2001, denying the motion for reconsideration.cralaw:red
Petitioner is a domestic
corporation engaged in the business of manufacturing hospital textiles
and garments and other hospital supplies for export. Petitioner’s
place of business is at the Subic Bay Freeport Zone (SBFZ). It is
duly registered with the Subic Bay Metropolitan Authority (SBMA) as a
Subic
Bay Freeport Enterprise, pursuant to the provisions of Rep.
Act No. 7227.[4]
As an SBMA-registered firm, petitioner is exempt from all local and
national
internal revenue taxes except for the preferential tax provided for in
Section 12 (c)[5]
of Rep. Act
No. 7227. Petitioner also registered with the Bureau of
Internal
Revenue (BIR) as a non-VAT taxpayer under Certificate of Registration
RDO
Control No. 95-180-000133.cralaw:red
From January 1, 1997
to December 31, 1998, petitioner purchased various supplies and
materials
necessary in the conduct of its manufacturing business. The
suppliers
of these goods shifted unto petitioner the 10% VAT on the purchased
items,
which led the petitioner to pay input taxes in the amounts of
P539,411.88
and P504,057.49 for 1997 and 1998, respectively.[6]
Acting on the belief
that it was exempt from all national and local taxes, including VAT,
pursuant
to Rep. Act
No. 7227, petitioner filed two applications for tax refund or tax
credit
of the VAT it paid. Mr. Edilberto Carlos, revenue district
officer
of BIR RDO No. 19, denied the first application letter dated December
29,
1998.cralaw:red
Unfazed by the denial,
petitioner on May 4, 1999, filed another application for tax
refund/credit,
this time directly with Atty. Alberto Pagabao, the regional director of
BIR Revenue Region No. 4. The second letter sought a refund or
issuance
of a tax credit certificate in the amount of P1,108,307.72,
representing
erroneously paid input VAT for the period January 1, 1997 to November
30,
1998.cralaw:red
When no response was
forthcoming from the BIR Regional Director, petitioner then elevated
the
matter to the Court of Tax Appeals, in a petition for review docketed
as
CTA Case No. 5895. Petitioner stressed that Section 112(A)[7]
if read in relation to Section 106(A)(2)(a)[8]
of the National
Internal
Revenue Code, as amended and Section 12(b)[9]
and (c) of Rep.
Act No. 7227 would show that it was not liable in any way for any
value-added
tax.cralaw:red
In opposing the claim
for tax refund or tax credit, the BIR asked the CTA to apply the rule
that
claims for refund are strictly construed against the taxpayer.
Since
petitioner failed to establish both its right to a tax refund or tax
credit
and its compliance with the rules on tax refund as provided for in
Sections
204[10]
and 229[11]
of the Tax Code,
its claim should be denied, according to the BIR.cralaw:red
On October 13, 2000,
the CTA decided CTA Case No. 5895 as follows:
WHEREFORE,
in view of the foregoing, the Petition for Review is hereby PARTIALLY
GRANTED.
Respondent is hereby ORDERED to REFUND or in the alternative to ISSUE A
TAX CREDIT CERTIFICATE in favor of Petitioner the sum of P683,061.90,
representing
erroneously paid input VAT.
SO ORDERED.[12]
In granting a partial
refund,
the CTA ruled that petitioner misread Sections 106(A)(2)(a) and 112(A)
of the Tax Code. The tax court stressed that these provisions
apply
only to those entities registered as VAT taxpayers whose sales are
zero-rated.
Petitioner does not fall under this category, since it is a non-VAT
taxpayer
as evidenced by the Certificate of Registration RDO Control No.
95-180-000133
issued by RDO Rosemarie Ragasa of BIR RDO No. 18 of the Subic Bay
Freeport
Zone and thus it is exempt from VAT, pursuant to Rep.
Act No. 7227, said the CTA.
Nonetheless, the CTA
held that the petitioner is exempt from the imposition of input VAT on
its purchases of supplies and materials. It pointed out that under
Section
12(c) of Rep.
Act No. 7227 and the Implementing Rules and Regulations of the
Bases
Conversion and Development Act of 1992, all that petitioner is required
to pay as a SBFZ-registered enterprise is a 5% preferential tax.cralaw:red
The CTA also disallowed
all refunds of input VAT paid by the petitioner prior to June 29, 1997
for being barred by the two-year prescriptive period under Section 229
of the Tax Code.
The tax court also limited the refund only to the input VAT paid by the
petitioner on the supplies and materials directly used by the
petitioner
in the manufacture of its goods. It struck down all claims for
input
VAT paid on maintenance, office supplies, freight charges, and all
materials
and supplies shipped or delivered to the petitioner’s Makati and Pasay
City offices.cralaw:red
Respondent CIR then
filed a petition, docketed as CA-G.R. SP No. 62823, for review of the
CTA
decision by the Court of Appeals. Respondent maintained that the
exemption of Contex Corp. under Rep.
Act No. 7227 was limited only to direct taxes and not to indirect
taxes
such as the input component of the VAT. The Commissioner pointed
out that from its very nature, the value-added tax is a burden passed
on
by a VAT registered person to the end users; hence, the direct
liability
for the tax lies with the suppliers and not Contex.cralaw:red
Finding merit in the
CIR’s arguments, the appellate court decided CA-G.R. SP No. 62823 in
his
favor, thus:
WHEREFORE,
premises considered, the appealed decision is hereby REVERSED AND SET
ASIDE.
Contex’s claim for refund of erroneously paid taxes is DENIED
accordingly.
SO ORDERED.[13]
In reversing the CTA,
the
Court of Appeals held that the exemption from duties and taxes on the
importation
of raw materials, capital, and equipment of SBFZ-registered enterprises
under Rep.
Act
No. 7227 and its implementing rules covers only “the VAT imposable
under Section 107 of the [Tax Code], which is a direct liability of the
importer, and in no way includes the value-added tax of the
seller-exporter
the burden of which was passed on to the importer as an additional
costs
of the goods.”[14]
This was because the exemption granted by Rep.
Act No. 7227 relates to the act of importation and Section 107[15]
of the Tax Code specifically imposes the VAT on importations. The
appellate court applied the principle that tax exemptions are strictly
construed against the taxpayer. The Court of Appeals pointed out that
under
the implementing rules of Rep.
Act No. 7227, the exemption of SBFZ-registered enterprises from
internal
revenue taxes is qualified as pertaining only to those for which they
may
be directly liable. It then stated that apparently, the
legislative
intent behind Rep.
Act No. 7227 was to grant exemptions only to direct taxes, which
SBFZ-registered
enterprise may be liable for and only in connection with their
importation
of raw materials, capital, and equipment as well as the sale of their
goods
and services.
Petitioner timely moved
for reconsideration of the Court of Appeals decision, but the motion
was
denied.cralaw:red
Hence, the instant petition
raising as issues for our resolution the following:
A.
WHETHER OR NOT THE EXEMPTION FROM ALL LOCAL AND NATIONAL INTERNAL
REVENUE
TAXES PROVIDED IN REPUBLIC
ACT NO. 7227 COVERS THE VALUE ADDED TAX PAID BY PETITIONER, A SUBIC
BAY FREEPORT ENTERPRISE ON ITS PURCHASES OF SUPPLIES AND MATERIALS.
B.
WHETHER OR NOT THE COURT OF TAX APPEALS CORRECTLY HELD THAT PETITIONER
IS ENTITLED TO A TAX CREDIT OR REFUND OF THE VAT PAID ON ITS PURCHASES
OF SUPPLIES AND RAW MATERIALS FOR THE YEARS 1997 AND 1998.[16]
Simply stated, we shall
resolve now the issues concerning: (1) the correctness of the
finding
of the Court of Appeals that the VAT exemption embodied in Rep.
Act No. 7227 does not apply to petitioner as a purchaser; and (2)
the
entitlement of the petitioner to a tax refund on its purchases of
supplies
and raw materials for 1997 and 1998.
On the first issue,
petitioner argues that the appellate court’s restrictive interpretation
of petitioner’s VAT exemption as limited to those covered by Section
107
of the Tax Code
is erroneous and devoid of legal basis. It contends that the
provisions
of Rep. Act
No. 7227 clearly and unambiguously mandate that no local and
national
taxes shall be imposed upon SBFZ-registered firms and hence, said law
should
govern the case. Petitioner calls our attention to regulations
issued
by both the SBMA and BIR clearly and categorically providing that the
tax
exemption provided for by Rep.
Act No. 7227 includes exemption from the imposition of VAT on
purchases
of supplies and materials.cralaw:red
The respondent takes
the diametrically opposite view that while Rep.
Act No. 7227 does grant tax exemptions, such grant is not
all-encompassing
but is limited only to those taxes for which a SBFZ-registered business
may be directly liable. Hence, SBFZ locators are not relieved
from
the indirect taxes that may be shifted to them by a VAT-registered
seller.cralaw:red
At this juncture, it
must be stressed that the VAT is an indirect tax. As such, the
amount
of tax paid on the goods, properties or services bought, transferred,
or
leased may be shifted or passed on by the seller, transferor, or lessor
to the buyer, transferee or lessee.[17]
Unlike a direct tax, such as the income tax, which primarily taxes an
individual’s
ability to pay based on his income or net wealth, an indirect tax, such
as the VAT, is a tax on consumption of goods, services, or certain
transactions
involving the same. The VAT, thus, forms a substantial portion of
consumer expenditures.cralaw:red
Further, in indirect
taxation, there is a need to distinguish between the liability for the
tax and the burden of the tax. As earlier pointed out, the amount
of tax paid may be shifted or passed on by the seller to the buyer.
What
is transferred in such instances is not the liability for the tax, but
the tax burden. In adding or including the VAT due to the selling
price, the seller remains the person primarily and legally liable for
the
payment of the tax. What is shifted only to the intermediate
buyer
and ultimately to the final purchaser is the burden of the tax.[18]
Stated differently, a seller who is directly and legally liable for
payment
of an indirect tax, such as the VAT on goods or services is not
necessarily
the person who ultimately bears the burden of the same tax. It is
the final purchaser or consumer of such goods or services who, although
not directly and legally liable for the payment thereof, ultimately
bears
the burden of the tax.[19]
Exemptions from VAT
are granted by express provision of the Tax
Code or special laws. Under VAT, the transaction can have
preferential
treatment in the following ways:
(a)
VAT Exemption. An exemption means that the sale of goods or
properties
and/or services and the use or lease of properties is not subject to
VAT
(output tax) and the seller is not allowed any tax credit on VAT (input
tax) previously paid.[20]
This is a case wherein the VAT is removed at the exempt stage (i.e., at
the point of the sale, barter or exchange of the goods or properties).
The person making
the
exempt sale of goods, properties or services shall not bill any output
tax to his customers because the said transaction is not subject to
VAT.
On the other hand, a VAT-registered purchaser of VAT-exempt
goods/properties
or services which are exempt from VAT is not entitled to any input tax
on such purchase despite the issuance of a VAT invoice or receipt.[21]
(b)
Zero-rated Sales. These are sales by VAT-registered persons which
are subject to 0% rate, meaning the tax burden is not passed on to the
purchaser. A zero-rated sale by a VAT-registered person, which is a
taxable
transaction for VAT purposes, shall not result in any output tax.
However, the input tax on his purchases of goods, properties or
services
related to such zero-rated sale shall be available as tax credit or
refund
in accordance with these regulations.[22]
Under Zero-rating, all
VAT is removed from the zero-rated goods, activity or firm. In
contrast,
exemption only removes the VAT at the exempt stage, and it will
actually
increase, rather than reduce the total taxes paid by the exempt firm’s
business or non-retail customers. It is for this reason that a
sharp
distinction must be made between zero-rating and exemption in
designating
a value-added tax.[23]
Apropos, the petitioner’s
claim to VAT exemption in the instant case for its purchases of
supplies
and raw materials is founded mainly on Section 12 (b) and (c) of Rep.
Act No. 7227, which basically exempts them from all national and
local
internal revenue taxes, including VAT and Section 4 (A)(a) of BIR
Revenue
Regulations No. 1-95.[24]
On this point, petitioner
rightly claims that it is indeed VAT-Exempt and this fact is not
controverted
by the respondent. In fact, petitioner is registered as a NON-VAT
taxpayer per Certificate of Registration[25]
issued by the BIR. As such, it is exempt from VAT on all its
sales
and importations of goods and services.cralaw:red
Petitioner’s claim,
however, for exemption from VAT for its purchases of supplies and raw
materials
is incongruous with its claim that it is VAT-Exempt, for only
VAT-Registered
entities can claim Input VAT Credit/Refund.cralaw:red
The point of contention
here is whether or not the petitioner may claim a refund on the Input
VAT
erroneously passed on to it by its suppliers.cralaw:red
While it is true that
the petitioner should not have been liable for the VAT inadvertently
passed
on to it by its supplier since such is a zero-rated sale on the part of
the supplier, the petitioner is not the proper party to claim such VAT
refund.cralaw:red
Section 4.100-2 of BIR’s
Revenue Regulations 7-95, as amended, or the “Consolidated Value-Added
Tax Regulations” provide:
Sec.
4.100-2.
Zero-rated Sales. A zero-rated sale by a VAT-registered person,
which
is a taxable transaction for VAT purposes, shall not result in any
output
tax. However, the input tax on his purchases of goods, properties
or services related to such zero-rated sale shall be available as tax
credit
or refund in accordance with these regulations.
The following
sales
by VAT-registered persons shall be subject to 0%:
(a) Export Sales
“Export Sales”
shall
mean
x x x
(5)
Those considered export sales under Articles 23 and 77 of Executive
Order No. 226, otherwise known as the Omnibus Investments Code of 1987,
and other special laws, e.g., Republic
Act No. 7227, otherwise known as the Bases Conversion and Development
Act
of 1992.
x x x
(c) Sales to
persons
or entities whose exemption under special laws, e.g. Rep.
Act No. 7227
R.
A. No. 7916duly registered and accredited enterprises with Subic
Bay
Metropolitan Authority (SBMA) and Clark Development Authority (CDA), ,
Philippine Economic Zone Authority (PEZA), or international agreements,
e.g. Asian Development Bank (ADB), International Rice Research
Institute
(IRRI), etc. to which the Philippines is a signatory effectively
subject
such sales to zero-rate.”
Since the transaction
is
deemed a zero-rated sale, petitioner’s supplier may claim an Input VAT
credit with no corresponding Output VAT liability. Congruently, no
Output
VAT may be passed on to the petitioner.
On the second issue,
it may not be amiss to re-emphasize that the petitioner is registered
as
a NON-VAT taxpayer and thus, is exempt from VAT. As an exempt VAT
taxpayer, it is not allowed any tax credit on VAT (input tax)
previously
paid. In fine, even if we are to assume that exemption from the
burden
of VAT on petitioner’s purchases did exist, petitioner is still not
entitled
to any tax credit or refund on the input tax previously paid as
petitioner
is an exempt VAT taxpayer.cralaw:red
Rather, it is the petitioner’s
suppliers who are the proper parties to claim the tax credit and
accordingly
refund the petitioner of the VAT erroneously passed on to the latter.cralaw:red
Accordingly, we find
that the Court of Appeals did not commit any reversible error of law in
holding that petitioner’s VAT exemption under Rep. Act No. 7227 is
limited
to the VAT on which it is directly liable as a seller and hence, it
cannot
claim any refund or exemption for any input VAT it paid, if any, on its
purchases of raw materials and supplies.cralaw:red
WHEREFORE, the petition
is DENIED for lack of merit. The Decision dated September 3,
2001,
of the Court of Appeals in CA-G.R. SP No. 62823, as well as its
Resolution
of December 19, 2001 are AFFIRMED. No pronouncement as to costs.cralaw:red
SO ORDERED.cralaw:red
Puno, J., (Chairman), Callejo,
Sr., and Tinga, JJ., concur.
Austria-Martinez,
J.,
on leave.
____________________________
Endnotes:
[1]
Rollo, pp. 29-38. Penned by Associate Justice Rodrigo V. Cosico, with
Associate
Justices Ramon A. Barcelona, and Bienvenido L. Reyes concurring.
[2]
Id. at 59-70.
[3]
Id. at 40-41.
[4]
The Bases Conversion and Development Act of 1992.
[5]
Sec. 12. Subic Special Economic Zone. – Subject to the concurrence by
resolution
of the sangguniang panlungsod of the City of Olongapo and the
sangguniang
bayan of the Municipalities of Subic, Morong and Hermosa, there is
hereby
created a Special Economic and Freeport Zone consisting of the City of
Olongapo and the Municipality of Subic, Province of Zambales
The abovementioned zone shall be subject to the following policies:chanroblesvirtuallawlibrary
x
x x
(c) The provision of existing laws, rules and regulations to the
contrary
notwithstanding, no taxes, local and national, shall be imposed within
the Subic Special Economic Zone (stress supplied). In lieu of paying
taxes,
three percent (3%) of the gross income earned by all businesses and
enterprises
within the Subic Special Economic Zone shall be remitted to the
National
Government, one percent (1%) each to the local government units
affected
by the declaration of the zone in proportion to their population area,
and other factors. In addition, there is hereby established a
development
fund of one percent (1%) of the gross income earned by all businesses
and
enterprises within the Subic Special Economic Zone to be utilized for
the
development of municipalities outside the City of Olongapo and the
Municipality
of Subic, and other municipalities contiguous to the base areas.
In case of conflict between national and local laws with respect to tax
exemption privileges in the Subic Special Economic Zone, the same shall
be resolved in favor of the latter (stress supplied).
x
x x
[6]
Underlining supplied.
[7]
Sec. 112. Refunds or Tax Credits of Input Tax –
(A) Zero-rated or Effectively Zero-rated Sales.– Any
VAT-registered
person, whose sales are zero-rated or effectively zero-rated may,
within
two (2) years after the close of the taxable quarter when the sales
were
made, apply for the issuance of a tax credit certificate or refund of
creditable
input tax due or paid attributable to such sales, except transitional
input
tax, to the extent that such input tax has not been applied against
output
tax: Provided, however, That in the case of zero-rated sales under
Section
106(A)(2)(a)(1), (2) and (B) and Section 108 (B)(1) and (2), the
acceptable
foreign currency exchange proceeds thereof had been duly accounted for
in accordance with the rules and regulations of the Bangko Sentral ng
Pilipinas
(BSP):…
[8]
SEC. 106. Value-Added Tax on Sale of Goods or Properties. –
x
x x
(2)
The following sales by VAT-registered persons shall be subject to zero
percent (0%) rate:chanroblesvirtuallawlibrary
(a)
Export Sales. – The term ‘export sales’ means:chanroblesvirtuallawlibrary
(1)
The sale and actual shipment of goods from the Philippines to a foreign
country, irrespective of any shipping arrangement that may be agreed
upon…
[9]
SEC. 12. (b) The Subic Special Economic Zone shall be operated and
managed
as a separate customs territory ensuring free flow or movement of goods
and capital within, into and exported out of the Subic Special Economic
Zone, as well as provide incentives such as tax and duty-free
importations
of raw materials, capital and equipment. However, exportation or
removal
of goods from the territory of the Subic Special Economic Zone to the
other
parts of the Philippine territory shall be subject to customs duties
and
taxes under the Customs and Tariff Code and other relevant tax laws of
the Philippines.
[10]
Sec. 204. Authority of the Commissioner to Compromise, Abate and
Refund or Credit Taxes.-The Commissioner may-
(A) Compromise the payment of any internal revenue tax, when:chanroblesvirtuallawlibrary
(1) A reasonable doubt as to the validity of the claim against
the
taxpayer exists; or
(2) The financial position of the taxpayer demonstrates a clear
inability
to pay the assessed tax.
x
x x
(B) Abate or cancel a tax liability, when:chanroblesvirtuallawlibrary
(1) The tax or any portion thereof appears to be unjustly or
excessively
assessed; or
(2) The administration and collection costs involved do not
justify
the collection of the amount due.
x
x x
(C) Credit or refund taxes erroneously or illegally received or
penalties
imposed without authority, refund the value of internal revenue stamps
when they are returned in good condition No credit or refund
of taxes or penalties shall be allowed unless the taxpayer files in
writing
with the Commissioner a claim for credit or refund within two (2) years
after the payment of the tax or penalty:chanroblesvirtuallawlibrary
x
x x
[11]
Sec. 229. Recovery of Tax Erroneously or Illegally Collected.— …
… no such suit or proceeding shall be filed after the expiration of two
(2) years from the date of payment of the tax or penalty regardless of
any supervening cause that may arise after payment: Provided, however,
That the Commissioner may, even without a written claim therefor,
refund
or credit any tax, where on the face of the return upon which payment
was
made, such payment appears clearly to have been erroneously paid.
[12]
Rollo, p. 69.
[13]
Id. at 38.
[14]
Id. at 37.
[15]
Sec. 107. Value-Added Tax on Importation of Goods.—
(A) In General.—There shall be levied, assessed and collected on
every importation of goods a value-added tax equivalent to ten percent
(10%) based on the total value used by the Bureau of Customs in
determining
tariff and customs duties, plus customs duties, excise taxes, if any,
and
other charges, such tax to be paid by the importer prior to the
release
of such goods from customs custody: Provided, That where the customs
duties
are determined on the basis of the quantity or volume of the goods, the
value-added tax shall be based on the landed cost plus excise taxes, if
any.
(B) Transfer of Goods by Tax-exempt Persons.—In the case of
tax-free
importation of goods into the Philippines by persons, entities or
agencies
exempt from tax where such goods are subsequently sold, transferred or
exchanged in the Philippines to non-exempt persons or entities, the
purchasers,
transferees or recipients shall be considered the importers thereof,
who
shall be liable for any internal revenue tax on such importation.
The tax due on such importation shall constitute a lien on the goods
superior
to all charges or liens on the goods, irrespective of the possessor
thereof.
[16]
Rollo, p. 11.
[17]
Sec. 105. Persons Liable.—Any person who, in the course of trade or
business,
sells, barters, exchanges, leases goods or properties, renders
services,
and any person who imports goods shall be subject to the value-added
tax
(VAT) imposed in Sections 106 to 108 of this Code.
The value-added tax is an indirect tax and the amount of tax may be
shifted
or passed on to the buyer, transferee or lessee of the goods,
properties
or services. This rule shall likewise apply to existing contracts
of sale or lease of goods, properties or services at the time of the
effectivity
of Republic Act No. 7716.
The phrase ‘in the course of trade or business’ means the regular
conduct
or pursuit of a commercial or an economic activity, including
transactions
incidental thereto, by any person regardless of whether or not the
person
engaged therein is a nonstock, nonprofit private organization
(irrespective
of the disposition of its net income and whether or not it sells
exclusively
to members or their guests), or government entity.
The rule of regularity, to the contrary notwithstanding, services as
defined
in this Code rendered in the Philippines by nonresident foreign persons
shall be considered as being rendered in the course of trade or
business.
[18]
Deoferio, Jr. and Mamalateo, THE VALUE ADDED TAX IN THE PHILIPPINES
35-36
(1st ed. 2000).
[19]
Deoferio, Jr. and Mamalateo, op. cit. 117.
[20]
BIR Revenue Regulations No. 7-95, Section 4.103-1.
[21]
Ibid.
[22]
Id. at Section 4.100-2.
[23]
Vitug and Acosta. TAX LAW AND JURISPRUDENCE 241 (2nd ed. 2000).
[24]
BIR Revenue Regulations No. 1-95, or the “Rules and Regulations to
Implement
the Tax Incentives Provisions under Paragraphs (b) and (c) of Section
12,
Republic Act No. 7227 Otherwise Known as the Bases Conversion and
Development
Act of 1992.”
“Section 4. Exemptions and Incentives.-
A.
All SBMA registered enterprises doing business within the Secured Area
in the Zone shall enjoy the following:chanroblesvirtuallawlibrary
a.
Exemption from customs and import duties and national internal revenue
taxes on importations of raw materials for manufacture into finished
products
and capital goods and equipment needed for their business operation
within
the Secured Area.
x
x x
e.
Purchases of raw materials, capital goods and equipment and services by
the SBMA and SBF accredited enterprises from enterprises in the Customs
Territory shall be considered effectively zero-rated for VAT purposes”
[25]
Rollo, p. 49. |