(a) The starting point of reckoning the extinctive prescription of customs duties, etc. to be inferred due to the revocation of foreign investment authorization or cancellation of registration;

B. Whether the provisions of Article 33(2) of the Customs Act on the Reduction of Customs Duties in a case where reduced or exempted customs duties are collected additionally (negative)

A. The Minister of Finance and Economy becomes aware of the fact that a foreign investor failed to pay the object of the investment within the period stipulated in Article 11 of the Foreign Capital Inducement Act, and thus falls under Article 18 subparagraph 1 of the same Act, the extinctive prescription of customs duties, special consumption tax, and value added tax, which have been reduced or exempted by the head of the tax office or customs office pursuant to Article 15 of the same Act, shall not be imposed until the approval of foreign investment is revoked or the registration is revoked under the same provision. Thus, the extinctive prescription of customs duties, etc. to be additionally collected shall be deemed to run from the date when the Minister of Finance and Economy revokes

(b) The provisions of Article 33(2) of the Customs Act on the Reduction of Customs Duties in the case of the collection of reduced or exempted customs duties apply to goods whose customs duties have been reduced or exempted, including Articles 27 through 32 of the Customs Act and Article 37-2 of the Customs Act, and do not apply to cases where customs duties, special consumption tax and value added tax have been reduced or exempted under the provisions of the Foreign Capital Inducement Act until "where taxes, special consumption tax and value added tax are collected by foreign legislation" (the grounds for such collection are different from the Customs Act).

(a) Articles 15 and 18 of the Foreign Capital Inducement Act;

Supreme Court Decision 90Nu2581 Delivered on June 22, 1990

[Defendant-Appellee] Kokdo Hotel, Inc., Counsel for defendant-appellant-appellee

Head of Busan Customs Office

Busan High Court Decision 89Gu732 delivered on February 23, 1990

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

1. Judgment on the ground of appeal No. 1 by the Plaintiff’s attorney

According to Article 17 (2) 1 of the Foreign Capital Inducement Act, the head of a tax office or customs office may promote the duty, special consumption tax and value-added tax reduced or exempted pursuant to Article 15 in a case where the approval of foreign investment is revoked or registration is cancelled pursuant to Article 18. Thus, even if a foreign investor failed to pay the object of investment within the period provided for in Article 11 and became aware of such fact, even if he did not pay it within the period provided for in Article 11, the Minister of Finance and Economy may not estimate the duty, special consumption tax and value-added tax reduced or exempted pursuant to Article 15 before the Minister of Finance and Economy revokes the approval or registration of foreign investment pursuant to Article 18. Accordingly, the extinctive prescription of customs duties, etc. to be collected shall be deemed to run from the date when the Minister of Finance and Economy revokes the approval or registration of foreign investment pursuant to Article 18.

As such, the judgment of the court below with the same opinion cannot be deemed to have erred by misapprehending the legal principles on the initial date of extinctive prescription or by misapprehending the facts.

In contrast to these conflicting views, the Minister of Finance and Economy is not able to criticize the judgment of the court below on the premise that the extinctive prescription is in progress from the date on which he became aware that there is a reason for revoking the authorization of foreign investment under the provisions of Article 18.

2. Determination on the ground of appeal No. 2

Article 33 (2) of the Customs Act provides that "if customs duties are additionally imposed on goods whose customs duties have been reduced or exempted under this Act or any other Act, if such goods are deteriorated or damaged, or their use has reduced their value, such customs duties may be reduced under the conditions as prescribed by the Presidential Decree." This provision applies to goods whose customs duties have been reduced or exempted under the conditions as prescribed by the Presidential Decree, including Articles 27 through 32 and 37-2 of the Customs Act." This case is interpreted as not applying to "where customs duties, special consumption tax and value-added tax are collected under the Foreign Capital Inducement Act" (the grounds for additional collection are different from the Customs Act) as in the case of this case, so there is no error of law by misunderstanding the legal principles as to Article 33 (2) of the Customs Act, such as theory of lawsuit, or failing to properly examine such goods.

3. Therefore, the plaintiff's appeal is dismissed, and the costs of appeal are assessed against the plaintiff who has lost. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Jae-sung (Presiding Justice)