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A. On January 3, 2011, the Plaintiff (former: Company B) entered into an entrustment contract with C (mutual name: D) (hereinafter “instant contract”) to manufacture and supply cosmetics to C (hereinafter “instant contract”) as a company engaging in the manufacturing business of cosmetics and the retail business of cosmetics.

B. From around November 2014 to November 2015, C requested the Plaintiff to manufacture cosmetics using cosmetics as raw materials (hereinafter “instant raw materials”), and the Plaintiff manufactured cosmetics using the aforementioned raw materials. In particular, according to the third request for manufacture made around November 2015 (hereinafter “instant request for manufacture”), the Plaintiff supplied the 5,461 (hereinafter “instant cosmetics”) with total weight of 810.32km and ex-factory value of 10,568,851 won from November 5, 2015 to April 14, 2016.

C. On May 26, 2016, C requested the Plaintiff to conduct a raw material test of the instant raw material provided by C at the time of the instant request for the manufacture, and notified the Plaintiff that the said raw material was detected by samere, the use of which is prohibited under the Cosmetics Act (hereinafter “instant ingredient”). On the other hand, C recovered parts of inventory products and already sold products and returned them to the Plaintiff.

The Plaintiff, among the instant cosmetics, received 3,531 as of June 21, 2016, 616 as of July 4, 2016, and 42 4,189 as of July 4, 2016, respectively, and discarded them.

E. On August 28, 2017, the Defendant, on the ground that the Plaintiff manufactured the instant cosmetics using raw materials containing the instant ingredients, pursuant to Articles 24(1)1, 8(1), and 15 subparag. 5 of the Cosmetics Act, Article 29(1) [Attachment 7] subparag. 2 of the former Enforcement Rule of the Cosmetics Act (amended by Ordinance of the Prime Minister No. 1297, Jun. 30, 2016; hereinafter the same shall apply).

Sub-paragraph 3.