The case holding that, in the tariff classification under the Customs Act, since it is not clear how to determine the main function of a professional projector with computer data projector with video projector's function and video projector's function together, it should be classified as a video projector in accordance with the principle of final classification under subparagraph 3(c) of the General Rules on the Interpretation of Tax Rates

The case holding that, in the tariff classification under the Customs Act, since it is not clear how to determine the main function of a professional projector with computer data projector with video projector's function and video projector's function together, it should be classified as a video projector in accordance with the principle of final classification under subparagraph 3(c) of the General Rules on the Interpretation of Tax Rates.

No. 1 and 3 of the Customs Act, Articles 50, 85, 87, and General Rules on Interpretation of Tariff Schedules

CPEM Co., Ltd. (Law Firm Sejong, Attorneys Cho Jong-sk et al., Counsel for the plaintiff-appellant)

Head of Seoul Customs Office

Seoul Criminal Administration Act (Law No. 2003Guhap39900 delivered on September 2, 2004)

october 12, 2005

1. Revocation of the first instance judgment.

2. The plaintiff's claim is dismissed.

3. The total costs of the lawsuit shall be borne by the plaintiff.

1. Purport of claim

The Defendant’s revocation of the disposition rejecting the reduction or correction of customs duties of KRW 192,567,330 against the Plaintiff on January 22, 2002.

2. Purport of appeal

The same shall apply to the order.

1. Details of the disposition;

A. In the year 2000 and 2001, the Plaintiff imported industrial projectors 91 parts (the model name ECP9700DLV-53 parts, ECP9700DLV-CR 27 parts, DLVV 11 parts, and the following hereinafter referred to as “instant projectors”) on 16 occasions, and filed an import declaration as falling under the video projectors (rate 8%) set forth in No. 8528.30-000 of the HS in accordance with the Tariff Schedules, and paid customs duties of KRW 192,567,30.

B. Thereafter, the Plaintiff asserted that the instant projector constituted a data projector (0%) set forth in subparagraph 2 of Article 8471.60-2022 of the HS, not a video projector as set forth in Article 8528.30.30-000 of the HS according to the Tariff Schedules, and thus, the payment of customs duties was erroneous, and requested for correction of the amount of customs duties of KRW 192,567,330 already paid. However, on January 22, 2002, the Plaintiff was subject to the instant disposition of rejection from the Defendant.

[Reasons for Recognition] 1 to 32, A3, and 4

2. Whether the instant disposition is lawful

A. Summary of the parties' assertion

(1) Won high

The projector of this case has the projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector's projector

(2) Sheetion;

Inasmuch as the main function of the instant projector is not to be readily concluded as a computer projector, inasmuch as the main function is not to be determined as a computer projector, in accordance with the principle of final classification set out in the General Rules on the Interpretation of Tariff Schedules, it should be classified as a video projector of HS No. 8528.30.-000 in accordance with the tariff schedule in accordance with the principle of final classification set forth in the General Rules on the Interpretation of Tariff Schedules.

B. Relevant provisions

Customs Act

Article 50 (Priority Order of Tariff Rate) (1) The basic tariff rate and provisional tariff rate shall be based on the attached Schedules of Tariff Rates and the provisional tariff rate shall prevail over the basic tariff rate

Article 85 (Standards, etc. for Applying Tariff Classification) (1) The Commissioner of the Korea Customs Service may set standards for the application of tariff classification under the conditions as prescribed by the Presidential Decree.

Article 87 (Modification of Tariff Classification Applied to Specific Goods) (1) The Commissioner of the Korea Customs Service may, when it is necessary to modify a tariff classification examined under Article 86 or unavoidable grounds arise for him to modify a tariff classification ex officio, modify such tariff classification to be applied to the relevant goods.

General Rules on Interpretation of Tariff Schedules

1. The Schedules, Chapters, and Section 1 of this Schedule are solely set up for the convenience of reference, and tariff classification for legal purposes shall be determined by the terms of each number of each category (hereinafter referred to as “the head”) and the relevant parts or Notes, and if not otherwise provided in each of these subparagraphs or Notes, it shall be subject to the provisions of sub-paragraphs 2 through 6 of this Rule.

3.If the same product can be considered to be classified in more than one category for reasons of subparagraph 2(b) or for other reasons, the classification shall be subject to the following provisions:

(a) The heading expressed in the most consultation generally shall prevail, except that if two or more headings provide that only part of the goods in the set for the purpose of making them a mixture of materials or a combination of materials or for the purpose of retailing part or any part of the materials or substances contained therein, if one of them appears completely or clearly to be another heading, they shall be deemed to have been expressed equally in consultation with respect to the good;

(b)a mixture, a combination made of different materials, or a combination made of different components, and a combination made of sets for retail purposes, which cannot be classified under the provisions of subparagraph (a) shall, as far as possible, be treated as being composed of the materials or components giving the essential characteristics to those goods;

(c)the goods that cannot be classified under the provisions of subparagraph (a) or (b) shall be classified in the final subparagraph in the order of the same classification among the headings that can be equally classified;

Schedules

○ Class 84: Nuclear reactor, boiler, machinery and parts thereof

Item No. 8471: Machines which are transferred in the form of code to the automatic data processing machine and its unit apparatus and data processing machine not classified into other units, or luminous reading machine and data processing machine, and the machines which are transferred in the form of code to the data media;

8471.60 : Reference apparatus or output apparatus, regardless of whether or not they have loaded the same niverse memory apparatus

8471.60-20 : Printed device

8471.60-2022: Data projector

Notes 5. (a) The term “Automatic Data Processing Machinery” in Section 8471 means:

(i) digital automatic data processing machines;

(a)facilitate the program to be or processed in the course of processing and the data required directly for the implementation of the program at least; and

(B) freely prepare programs according to the needs of the employer.

(c) can carry out the repair account designated by the employer; and

(D) A person’s own modification without a person’s intervention in a process that requires a change in a logical judgment during the process.

(b) Alday-type automatic data processing machine: a product that can apply a repair model and that has at least an Aalday-based element, control factor, and programming element.

(c) Hybrid type automatic data processing machines: A day-to-day type automatic data processing machines or digital elements which have the elements of Aday; and

(b)Automatic data processing machines are in the form of a system composed of several independent apparatuses, except that they are in the following, and are part of the completed system:

(1) The primary use in the automatic data processing system is

(ii) can be connected directly to, or through one or more other unit devices; and

(iii) can receive or transmit data in the form of code or code used in the system;

(c)where unit devices of automatic data processing machines are separated and presented, they are classified in heading 8471.

(d) Trackers, keyboards, X-Y Clorate inputs and disks that meet the conditions of paragraphs (b)(2) and (3) above are classified in no case in heading 8471.

(e) machinery that performs a specific function other than data processing, that is combined with or linked to automatic data processing machinery, shall be classified into that sub-paragraph in accordance with its own function and, in the absence of any heading classified by that function, shall be classified into other sub-paragraphs;

Notes 7.7.For classification of machinery used for not less than two purposes, its main use shall be treated as the sole use and classified. Machines whose main use is not set out in any subparagraph, or whose main use is unclear shall be classified in accordance with Note 2 to this Chapter or Note 3 to Part 16, and except as otherwise classified by interpretation in the context, it shall be classified in subparagraph 8479. In addition, heading 8479 shall include machinery maps which manufacture lines or cables mixed with metal lines, textile materials, fibers, and other materials or these materials (e.g., seeding, tamping, cableing).

○ 85: Electric machinery and tools and parts thereof, tape recorderss and sound reproducingers, and video and sound images and parts and accessories of them

product number 8528: Televisions (whether or not combined with a radio receiver, voice or video recording or reproducing device), video monitors, and video projector

8528.30 : 3. Image projector

Part 16: Machines and tools and parts thereof, tape recorderss and sound reproducings, and video and sound image of television, and parts and accessories of them

Note:3.2 Machines consisting of more than one complete machine and machines consisting of more than two assistive or selective functions, except as the context otherwise requires, shall be classified into a single machine consisting of these elements, or classified into a single machine carrying out its principal functions.

C. Facts of recognition

(1) The characteristics and functions of the projector of this case

① The horizontal frequencies are 15 - 120 KH, screen value is 1280 x 1024 x 1024, data signal (VG), video signal (NTSC, PAL, SECM, Common Ppool) and audio signal, etc.

② Not only has the function of expanding and dumping large Scream by directly receiving data signals from the central processing device (CPU) of computers, but also may also be input and administered by inputting television and video signals (NTS and PAL) directly distinguishable from data signals from the reproduction apparatus, such as VTS and DVD reproduction apparatus, without going through the central processing device of computers.

③ The instant projector’s act of separating a compliance image from an ste-Vides (S-Vides) and an se-deo (S-Vides) signal from among video signals, in which the instant projector’s basic pattern or selective pattern is installed, performs the function of separating a ste-line image from a ste-line image to a steroma signal, and recent digital broadcasting equipment, high quality television, highest class DVD, etc. can be operated without a separate device.

④ The projectors of this case are fixed and installed at a specific place in and out of 40 kilograms of weight. The price is approximately KRW 30 million, and are currently used in military units, police, power plants, industrial research institutes, traffic, telecommunications, power situation room, key industrial enterprises, etc.

(2) Development history and production status of projectors

① Data projector has been developed as data of network computers and equipment for traffic management in the Seo-gu 1970 through 1980s, which are calculated in the control situation of national security, public security, public industry (road, traffic, airport, communication, resource management, etc.), management and control systems, etc.

② At the same time, a video projector is fixed at 15.6 or 15.7 KH as an electronic device developed by all subsidiaries in Japan in order to substantially expand and play video screen on television or video, etc. in connection with television or video, and the horizontal frequency is fixed at 15.6 or 15.7 KH. The screen sea is at 640 x 480 x 480, and can be carried by himself/herself because of small and medium, weight.

③ The development of computer science and technology leads to the development of data projector with a device, such as a “video camera,” which could only process the initial computer data, connected to the existing data projector in the form of an internal or external package, so that data projector can process television and video signals as well as computer data.

④ Data projector who processes only computer data does not produce almost little, and can process video image signals through video cameras. In particular, compliance video signals in the case of the instant projector can be processed through internal signal processing process, if they are connected to the relevant cross-party installed behind without any such separate device.

(iii)the HS Convention and the HS Tariff Schedule Understanding;

① The World Customs Organization (WCO) was established on January 1, 1952 as an international organization in order to unify different systems for each country in relation to the customs system and contribute to world trade by developing customs technology, and Korea has subscribed to three Convention on October 2, 1968 (WCO Establishment Treaty, Tariff Classification Convention, and Evaluation Convention) through the National Assembly approval procedure, and the World Customs Organization (WCO) requires a new international unification classification system that can be commonly used in the field of trade-related affairs, such as trade statistics, transportation, insurance, as well as customs duties, as it requires a new international unification classification system.

② The HS Convention consists of its full text and twenty parts, and its Annex (the objectives of the HS). Article 7 (Duties of the Committee under the World Customs Organization (WT) of the HS Convention provides that “to prepare explanatory notes, classification opinions, or other advice as guidelines for the interpretation of the unification system,” and “to prepare recommendations to secure uniformity in the interpretation and application of the unification system.”

3. Accordingly, in order to ensure the uniformity of the classification of the HS items for exported and imported goods traded between international markets, the World Customs Organization (WCO) has taken place attached publications such as HS official tariff lists and the statement of tariff classification for the HS items periodically or at any time, and the member countries of the World Customs Organization (WCO) have used these publications as the working guidelines for the tariff classification after undergoing the procedures for accepting domestic laws.

④ As an official explanation on the HS tariff classification approved by the World Customs Organization (WT), Korea is accepted and applied as an announcement of the Korea Customs Service in accordance with Article 85(1) of the Customs Act in accordance with Article 85(1) of the Customs Act, and each addition or modification of the explanation is reflected in the notification of the Korea Customs Service.

⑤ The HS tariff classification statement is also being issued after examination and decision by the WTO Committee under the World Customs Organization (WCO) of the opinion on the classification of specific goods submitted by each customs authority for the purpose of attracting attention to the classification of specific goods and uniform classification. This also is also accepted in the notification of the Korea Customs Service in accordance with the provisions of Article 85(1) of the Customs Act, and is applied (to be stated in the order of the HS classification for the relevant goods and to add the explanation of the goods).

(iv) the explanation of the relevant Tariff Schedules No. 8471 of the HS and the opinion of the HS Committee (OPINON);

(1) In the relevant part of the HS No. 8471 of the current HS Tariff Schedule No. 8471, which was accepted as a notice by the Korea Customs Service, it provides that “dilate equipment of automatic data processing machines may only be transmitted from the central processing system of the automatic processing machine, and the knife image shall not be reproduced using video compliance signal in conformity with marc standards (e.g., NTSC, SECM, PAL, D-MAC, etc.).”

② At the 19th meeting (25 March 25, 1997) with respect to computer data and video projector (a comparison with model VPH-1292/ QM, the instant projector) capable of embodying both the data signals and video signals of computers, the HS Committee classified them as a data projector under Article 8471 of the HS by applying the main function classification principle (Common Rule 1). However, at the 23th meeting (23rd meeting from October 8, 1998), the opinion was finalized in HS by applying the General Rule 3(c) to the final classification principle (Common Rule 3(c).

WCO inquiry goods ( Model VPH-1292 Q/ QM) contained in the main sentence of this case ( model VH-1292 Q/ QM) The explanation, weight, price, 40 km and price at approximately KRW 300,000,000 per general video projector, which is more than the general video projector, for explanation, weight, price, and price of approximately 40 km and price of all renewable computer data signals (DLV 1280-DX, etc.) embodied in all renewable signal signals, computer data signals embodied in front of video signals, video signals, the horizontal frequency frequency of 13 through 135kHz 15-120kHz 200 x 1600 x 1600 x 1624 x 1024 x 1024 x

In accordance with the final opinion of the HS Committee, Korea also revised the "Public Notice on the Criteria for Tariff Classification" on December 24, 2001, and publicly notified by the Korea Customs Service No. 2001-62 (from January 1, 2002).

[Basis] Evidence Nos. 3 through 7, evidence No. 1 to 19, evidence No. 10, evidence No. 11, evidence No. 13-1, 2, evidence No. 14, evidence No. 16, evidence No. 17, evidence No. 3-1 to 8, evidence No. 4, evidence No. 5-1, No. 2, No. 6 through 8, evidence No. 9-1 and No. 2, and the purport of the whole pleadings

(d) Markets:

(1) According to the General Rules of Tariff Schedules No. 1, the tariff classification shall be determined by the terms of “each heading”, and by the states of the relevant sections or classes, and, in the event that no separate provisions are provided in each subparagraph or week, the tariff classification shall be governed by the General Rules No. 2 through No. 6. Thus, first of all, the tariff classification in the order of each number, class, and chapter shall be determined.

However, since the projector of this case can perform both the two functions of computer data projector and video projector, it is not applicable to the classification criteria of Section 7. A of Annex 84, which is a “Class” to which the data projector belongs, and the classification criteria of Section 3. A of Annex 16, which is a “B” to which both a data projector and a video projector belong, should be examined as to whether the classification criteria of Section 3. can be applied at a higher level level.

(2) Part 16. Note 3. of the Schedule provides that “The machinery made to enable more than two assistant functions or selective functions shall be classified as a single machinery which consists of these elements or which performs the principal functions, except as the context otherwise requires.”

However, in the following respect, the projector of this case cannot be seen as falling under data projector.

① The projector of this case may directly input image signals from VTR or DVD reproduction apparatus without passing through a computer’s central processing device (CPU). In particular, the compliance video signals, a kind of video signal, were produced so that they can be sufficiently processed without being installed a video tape recorder.

② In the relevant part of HS Regulation 8471, which was published by the World Customs Organization (WCC) HS Committee and accepted as a public notice by the Korea Customs Service, it is interpreted that the knife image cannot be reproduced by a videocom transmission line that conforms to mar broadcast standards (e.g., NTSC, SECAM, PAL, D-MAC) with respect to automatic data processing equipment.

③ At the 23th meeting of the HS Committee, the instant projector had withdrawn the application of the principle of main functions classification under the General Rule 1 with respect to computer data and video projector of the model name VPH-1292 Q/ QM, which cannot be seen as an essential difference with the instant projector, and confirmed the opinion under Rule 8528 of the HS in accordance with the final classification principle under the General Rule 3(c).

(4) If the main functions of Part 16 Note 3. A of the Tariff Schedules are the criteria for classifying the main functions in accordance with General Rule 1 of the Tariff Schedules, the development of a pure image projector and a data projector and a video projector are merely incidental factors, and the production purpose or use (in the country’s security or public security, prevention of disasters, traffic, communications, power control, etc.) of the instant projector cannot be taken into account. Moreover, the actual consideration that the data projector is being produced so that the projector can perform the functions of the video projector cannot intervene in the evaluation of its main functions.

(3) Therefore, the instant protocol projectors cannot be classified as data projectors (0% of the tariff rates) of HS No. 8471.60-2022 according to the Tariff Schedules, since it is not clear how to determine the principal function of the projectors, and therefore, the instant disposition that determined that the instant protocol falls under a video projector of HS No. 8528.30-000 according to the principle of final classification under Rule 3(c) of the Tariff Schedules is legitimate.

3. Conclusion

Therefore, the plaintiff's claim seeking the cancellation of the disposition of this case shall be dismissed as it is without merit, and the judgment of the court of first instance shall be revoked differently and the plaintiff's claim shall be dismissed. It is so decided as per Disposition.

Judges' profit-based (Presiding Judge) Lee Jae-won