2016No580 Violation of the Tobacco Business Act

A

Defendant

The system of refining (prosecution), the system of stay in court (public trial)

Attorney B

Incheon District Court Decision 2014 High Court Decision 4202 Decided January 28, 2016

January 11, 2017:

The lower judgment is reversed. The Defendant is not guilty.

1. Summary of grounds for appeal;

The lower court found the Defendant guilty of the facts charged of this case as follows. In so doing, the lower court erred by misapprehending the legal doctrine.

A. The Defendant is entitled to sell special purpose tobacco within the jurisdiction of the U.S. military under the Tobacco Business Act, the Enforcement Decree of the same Act, and the Enforcement Rule of the same Act, and there is no room to constitute a violation of Articles 27-2(2)1 and 12(2) of the Tobacco Business Act under the principle of no punishment without law, and even if the Defendant sold special purpose tobacco outside the jurisdiction of the U.S. military in Korea, he shall not be punished

B. The Defendant, at the time of investigation by the prosecution, made data on tobacco sales amount of KRW 500 million by the prosecutor, made false confessions without additional collection and submitted data on the amount of fine. Thus, the Defendant’s self-examination report, etc. by the prosecutor against the Defendant was not admissible as a confession by deception or commitment, and the burden of proof was also erroneous.

C. The sales of tobacco of the remaining amount excluding an amount equivalent to 111,879,700 won out of the crime sight table as indicated in the holding of the court below is different from the fact.

2. Determination2)

A. Summary of the facts charged in this case

A person who intends to engage in tobacco retail business shall be designated as a retailer by the head of the Si/Gun/Gu having jurisdiction over the location of the place of business. Nevertheless, on January 1, 2010, the Defendant, without being designated as a retailer, sold tobacco (tax-free tobacco) of KRW 300 to general E by receiving KRW 485,000 from KRW 485,00 in a D-affiliated shop located in Yongsan-gu Seoul, Yongsan-gu, Seoul, and from that time until May 5, 2014 and February 23, 2014, all of the following methods, as shown in the list of crimes in the attached Table, sold the duty-free tobacco of KRW 470,723,80 in total to general E, etc.

B. Relevant statutes

Article 12 (Sales of Tobacco) (1) Tobacco manufacturing business shall be permitted by the Minister of Strategy and Finance, as prescribed by Presidential Decree. Article 12 (Sales of Tobacco) (1) Tobacco manufactured by a manufacturer shall be sold by such manufacturer, and tobacco imported from foreign countries shall be sold by such import and sale business entity to the following persons:

(1) Any person falling under any of the following subparagraphs shall be punished by a fine for negligence not exceeding two million won. 3. The tobacco for special use pursuant to the provisions of Article 19 (2) of the Enforcement Decree of the Tobacco Business Act (hereinafter referred to as the "Enforcement Decree") and Article 7 ( tobacco for special use) (1) of the Act shall be as follows: 8. The scope of the supply of tobacco pursuant to the provisions of paragraph (1) of the tobacco sold within the jurisdiction of foreign military forces in Korea and other necessary matters concerning the supply of tobacco shall be prescribed by Ordinance of the Ministry of Strategy and Finance.

C. Determination

1) The interpretation of penal provisions must be strict, and it is not permitted to expand or analogically interpret the meaning of penal provisions in the direction unfavorable to the defendant, as it is contrary to the principle of no crime without the law.

2) Article 12(2) of the Act provides that no person, other than a retailer, shall sell tobacco to consumers. Article 27-2(2)1 of the Act provides that a person who sells tobacco to consumers without being designated as a retailer, in violation of Article 12(2), shall be punished by imprisonment with prison labor for not more than 6 months or by a fine not exceeding 5 million won. In order to determine that a person engaged in tobacco retail business without being designated as a retailer subject to punishment as above, the tobacco sold pursuant to Article 12 must be considered as “tobaccos sold pursuant to Article 12.” Therefore, this paper examines whether special purpose tobacco under Article 19 corresponds to “tobacco sold pursuant to Article 12.”

(1) In a comprehensive and systematic interpretation of the Tobacco Business Act and related Acts as follows, it is reasonable to view that the tobacco for special use under Article 19 of the Act does not fall under the “tobacco sold under Article 12” because the distribution channel itself differs from that of tobacco wholesalers and tobacco sold to consumers through tobacco retailers, such as supply methods, etc.

i) The Act regulates the manufacture and sale of tobacco by distinguishing tobacco from their manufacture, wholesale and retail, provides that tobacco manufactured by a manufacturer under Article 12(1) shall be sold to wholesalers and retailers designated as retailers who registered for the wholesale business of tobacco, and the provisions of Articles 13 through 18 are applicable to the registration of tobacco wholesale business, the designation of retailers and the selling prices, etc. in relation to the sale of tobacco sold under Article 12.

ii) Article 19 is the title of “tobacco for special use”, and is located after Articles 13 through 18 providing for matters relating to the sale of “tobacco sold under the provisions of Article 12” and, even in view of the location of the article, the tobacco sold under the provisions of Article 12 is defined separately in a different way of supply.

(iii) Article 7(1) of the Enforcement Decree of the Act defines tobacco as being listed in the list of tobacco for special use, and Article 7(2) of the same Enforcement Decree provides that the scope of the supply of tobacco for special use and other matters necessary for the supply thereof shall be determined by Ordinance of the Ministry of Strategy and Finance, and the method of the supply thereof shall be separately

iv) Article 7 (3) of the Enforcement Decree provides that the tobacco for special use shall be marked separately from the tobacco sold under Article 12, and Article 13 (2) of the Enforcement Rule provides that where the tobacco for special use is manufactured and sold, the "tax exemption and Douty Free" shall be marked on the packaging of the tobacco.

v) Article 26(1)10 of the Value-Added Tax Act provides that the supply of tobacco for special use under Article 19 of the Tobacco Business Act, as prescribed by Presidential Decree, shall be exempted from the value-added tax, and the Local Tax Act also excludes tobacco consumption tax on tobacco for special use under Article 54(1) and handles tobacco for special use under Article 19 of the Act differently from the tobacco sold under Article 12 of the Act.

vi) Article 19(2) of the Act separately provides for prohibited acts related to the sale of tobacco for special use, and the fine for negligence is separately provided for in the case of violation (Article 28(1)3 of the Act). Since Article 19(2) of the Act does not specify the seller, there is no reason to interpret that the said provision shall apply only to cases where a person who is authorized to sell tobacco for special use, sells tobacco for other than the purpose

Therefore, the defendant's act cannot be punished for a violation of Article 12 (2) of the Act, aside from the punishment of a fine for negligence by the rate of violation of Article 19 (2) of the Act.

② If we look at only the text, it may be interpreted that the tobacco for special use in Article 12 of the Act includes tobacco for special use. However, such interpretation cannot be accepted for the following reasons. In other words, since the tobacco for special use itself is a tobacco that cannot be sold to consumers in accordance with the general distribution channel in its definition, it is impossible at all to obtain designation as a tobacco retailer for special use. Nevertheless, punishment for the reason that it was not designated as a retailer in selling tobacco for special use would result in an unreasonable consequence that the law requires it to be impossible, and that it was not implemented.

③ Even if there is a need to punish a person without sales authority as a criminal punishment for selling tobacco for special use, it is not only the legislation but also the interpretation that a "tobacco for special use" under Article 19 of the Act is converted into a "general tobacco for special use" under Article 12 of the Act, depending on whether the seller has the authority to sell the tobacco for the purpose of punishing such act.

3) In the instant case, even if the Defendant purchased tobacco for usfk from the distribution of awards and decorations without being designated as a retailer, and then sold all of 525 pieces of tobacco for usfk, as shown in the attached list of crimes in the judgment below, to general E, etc., the Defendant’s sale of special purpose tobacco equivalent to 470,723,800 won, as shown in the attached list of crimes in the judgment of the court below, it is difficult to deem that the Defendant committed an offense under Article 12(2) of the Act since the tobacco for usfk was not the tobacco sold under Article 12, and there is no other evidence to prove that the Defendant sold the tobacco sold under Article 12 of the Act to consumers without being designated as a retailer.

3. Conclusion

Therefore, the appeal based on the legal principles of the defendant is with merit. Thus, the judgment of the court below is reversed pursuant to Article 364 (6) of the Criminal Procedure Act without examining the remaining arguments, and the appeal is again decided as follows.

【Discretionary Judgment】

The summary of the facts charged in this case against the defendant is the same as the second-A, and as examined in the second-C paragraph, the facts charged in this case constitutes a case where there is no proof of facts constituting a crime, and thus, the defendant is acquitted pursuant to Article 325 of the Criminal Procedure Act

The presiding judge, Park Jae-man

Judges Park Sang-soo

Judicial Residence Support

1) In the statement of grounds for appeal dated February 24, 2016 by defense counsel, “the amount recognized in the attached Table, including KRW 199,00,00, out of Nos. 1, 199,000,”

An opinion of a defense counsel on April 6, 2015 submitted to the court below, although only "the amount indicated as such" is written and the attached table is omitted.

In full view of the contents of the second trial records of the court below (the 80th trial records), the recognized amount seems to be "11,879,700 won".

2) As to the same issue, the Supreme Court dismissed the prosecutor’s appeal against the judgment of the court below that acquitted on November 9, 2016 and made the judgment on the same issue.

A decision became final and conclusive (Supreme Court Decision 2016Do9803 Decided November 9, 2016; Supreme Court Decision 2016Do9803 Decided June 8, 2016, which is the lower court.

20154842)