EEE Energy Co., Ltd. (Law Firm Rate, Attorneys Lee Jong-soo et al., Counsel for the plaintiff-appellant)

Head of Ulsan Customs Office

June 26, 2009

Ulsan District Court Decision 2008Guhap1782 Decided January 7, 2009

1. The part of the judgment of the first instance against the plaintiff shall be revoked.

2. The Defendant’s imposition of KRW 68,259,960 out of KRW 12,302,950 among the customs duties of KRW 12,481,980 on September 19, 207 against the Plaintiff, and of KRW 10,239,99 out of the amount of KRW 19,431,010 on education tax, and the imposition of KRW 134,516,620 out of the amount of KRW 227,60,070 on November 13, 2007, and the imposition of KRW 134,516,620 out of the amount of customs duties of KRW 3,024,420,420,350 on KRW 1,785,293,470 on KRW 470 on education tax, 453,662,60 on education tax, and each disposition of imposition of KRW 267,870 on KRW

3. The defendant's appeal is dismissed.

4. All costs of the lawsuit shall be borne by the defendant.

1. Purport of claim

The Defendant’s imposition of customs duties of KRW 12,302,950 on September 19, 2007 against the Plaintiff and KRW 129,540,150 on traffic tax, KRW 19,431,010 on education tax, and KRW 227,60,070 on November 13, 2007, KRW 3,024,420,350 on traffic tax, KRW 3,024,420,350 on traffic tax, and KRW 453,662,660 on education tax, shall be revoked.

2. Purport of appeal

A. The plaintiff is entitled to paragraphs (1) and (2) of this Article.

B. Defendant: The part against the Defendant in the judgment of the first instance is revoked, and the Plaintiff’s claim corresponding thereto is dismissed.

1. Details of the disposition;

The following facts are not disputed between the parties, or may be acknowledged by taking into account the whole purport of the arguments in each of the statements in Gap evidence 1 to 3, Gap evidence 4, Eul evidence 1 to 3, Eul evidence 2 and 3, Eul evidence 1 to 3, Eul evidence 2 and 2.

A. On April 11, 2007, the company engaged in the import, export, manufacture, sale, etc. of petroleum products, whose trade name was changed to the EXEW service company, and was merged with the Plaintiff on January 11, 2008.

B. The Plaintiff Co., Ltd. (hereinafter “Plaintiff”) entered into an oil supply contract with Norway Co., Ltd., the intermediary (one life twiter or with Laor), and entered into a maritime oil supply service contract with Emphan Co., Ltd., Ltd., for the supply of oil to an overseas navigation vessel requested by Norway.

On the other hand, the court below concluded a charter contract with the non-party 1 corporation, the vessel oil supplier, to supply oil for the vessel supplied by the plaintiff to an overseas ship. The court below concluded a charter contract with the non-party 1 corporation, the vessel oil supplier, and the ship useful for maritime supply.

Accordingly, the Plaintiff supplied oil for ships to overseas navigation vessels at the request of Norway Co., Ltd. was originally responsible for the oil supply of oil for ships to overseas navigation vessels. However, in fact, Nonparty 1 Co., Ltd. supplied oil to overseas navigation vessels through the above charter contract.

C. However, during the period from September 25, 2002 to June 7, 2004, Nonparty 2 supplied oil more than the actual supplying volume to an overseas navigation vessel by the Plaintiff and sold the remainder (hereinafter “instant oil”), Nonparty 2, the Plaintiff, including the instant oil, illegally shipped out of Korea. However, Nonparty 2 forged the Plaintiff’s oil for the Plaintiff’s ship, including the instant oil, under the name of the captain of the relevant overseas navigation vessel or the head of the relevant agency, and submitted to the Plaintiff a written confirmation of carrying-in goods (loading) subject to refund, stating that the Plaintiff’s oil for the Plaintiff’s ship, including the instant oil, was supplied to an overseas navigation vessel by the head of Busan customs office, with the entire oil supplied by the Plaintiff, as if all of the oil for the ship was ordinarily supplied to the overseas navigation vessel.

D. The Plaintiff submitted the above certificate of carrying-in (loading) export goods subject to refund to the Defendant, and received refund of KRW 140,99,600, traffic tax of KRW 1,853,53,430, education tax of KRW 278,032,320, which was paid when the Plaintiff imported oil for the first time between October 15, 2002 and June 14, 2004.

E. After the investigation by the investigative agency, the fact that Nonparty 2 illegally carried out and sold the oil of this case among the oil used for the ship supplied by the Plaintiff to the Republic of Korea without supplying it to an overseas navigation ship was discovered, and that there was a forgery of a receipt of oil supply. Nonparty 2 was indicted in violation of the Punishment of Tax Evaders Act, fabrication of private documents, or display of a falsified investigation document at the Busan District Court, and the first instance court [ Busan District Court Decision 2006Da2737, 3032(consolidated), Busan District Court 206.9. 11. 2006. In the second instance court ( Busan District Court Decision 2006No2607) the sentence became final and conclusive as it was sentenced to a suspended sentence of 3 years on November 29, 2006.

F. Accordingly, on September 19, 207, the Defendant issued the Plaintiff each disposition of imposition of customs duties, traffic tax, and education tax (hereinafter “customs duties, etc.”) of KRW 12,302,950 (including additional dues of KRW 5,820,970), traffic tax of KRW 129,540,150 (including additional dues of KRW 61,280,190), education tax of KRW 19,431,010 (including additional dues of KRW 9,191,020), and on November 13, 207, additionally imposed customs duties of KRW 227,60,070 (including additional dues of KRW 93,083,450), traffic tax of KRW 3,024,420,350 (including additional dues of KRW 129,286,286,3686,686,686,686, etc. (including additional dues of KRW 196,66866,6666,205).

G. On December 14, 2007, the Plaintiff dissatisfied with each of the dispositions of this case and filed a request for a trial with the Tax Tribunal on December 14, 2007, but the request for a trial was dismissed on April 25, 2008, the Plaintiff filed the instant lawsuit on July 25, 2008.

2. Whether each of the dispositions of this case is legitimate

A. The plaintiff's assertion

Each disposition of this case shall be revoked on the following grounds.

(1) Each disposition of this case was made after the lapse of the two-year exclusion period stipulated in Article 21(1) of the Customs Act, and thus is null and void.

(2) In order for oil to be supplied to an overseas ship within a bonded area, the oil refineries company registered with the ship oil supply business is bound to take charge of the ship oil supplier in the bonded area. As to the trading order within the bonded area, the head of the competent customs office has exclusive control and supervision right to exclusively supply and control the oil supplied by the Plaintiff, and as to whether the oil supplied by the Plaintiff is ordinarily supplied to an overseas ship by the Plaintiff, the Plaintiff is not in a position to manage and supervise the oil supplier. Thus, Nonparty 1’s representative was not involved in the illegal outflow of the oil in the instant case, which was left by Nonparty 2’s sole-principal, and was not known to the Plaintiff.

In addition, a certificate of bringing-in (loading) of exported goods subject to refund is issued by the head of the competent customs office, and the authority and the responsibility for verifying whether the oil for the ship was normally supplied to an overseas navigation vessel as stated above is the head of the competent customs office. Thus, even if the certificate of bringing-in (loading) of the export goods subject to refund of the instant oil was issued with a false oil supply receipt forged by Nonparty 2 by Nonparty 2, as long as the head of the Busan customs office who is in the position to verify and issue the contents thereof issues the above certificate of bringing-in (loading) of the export goods subject to refund to the Plaintiff, the Plaintiff’

Therefore, it is against the principle of self-responsibility under the Constitution to collect customs duties, etc. whose responsibility is cancelled and collected even though the Plaintiff did not participate in the illegal outflow of the oil of this case and did not know that it was not liable to the Plaintiff for the refund of the customs duties, etc. of the oil of this case by trust in the contents of the certificate of bringing-in (loading) export goods issued by the head of Busan Customs Office.

(3) Even if not, the Plaintiff’s failure to know the fact that the instant oil was illegally leaked to the Republic of Korea and believed the content of the certificate of loading (inbound) goods for export issued by the head of Busan Customs Office and received customs duties accordingly. Thus, it is unlawful to collect customs duties, etc. refunded and impose additional duties (additional charges).

B. Relevant statutes

It is as shown in the attached Form.

C. Determination as to the expiration of the exclusion period

(1) A taxation disposition that was made after the exclusion period of the imposition of tax has expired is null and void (see Supreme Court Decision 2003Du1752 delivered on June 10, 2004).

In addition, under the principle of no taxation without law, the elements of taxation or non-taxation should be avoided, and the interpretation of tax laws should be strict, and the expanded interpretation or analogical interpretation is not allowed (see Supreme Court Decision 2002Du5955 delivered on March 12, 2004).

(2) According to Article 21(1)1 of the Customs Act and Article 6 subparag. 4 of the Enforcement Decree of the Customs Act, the exclusion period of imposition of customs duties shall, in principle, be two years, and five years from the day following the date of refund where customs duties have been refunded by unlawful means.

In addition, according to Article 4 (1) of the Customs Act, the provisions of the Customs Act, such as the Framework Act on National Taxes, the Traffic, Energy and Environment Tax Act, and the Education Tax Act, shall be applied in preference to the imposition, collection, refund, etc. of traffic tax, education tax, etc. imposed and collected by the head of the customs office on imported goods. Therefore, the exclusion period for imposition of traffic tax and education tax on the oil of this case shall be two

According to Article 26-2(1) of the Framework Act on National Taxes, in principle, the exclusion period of general national taxes shall be five years, and in cases where a taxpayer evades, obtains a refund or deduction of national taxes due to fraud or other unlawful acts, ten years, and in cases of internal taxes such as traffic tax and education tax collected by the head of the relevant customs office on customs duties and imported goods, the purpose of setting the exclusion period of short-term exclusion of imposition is to ensure stability and promotion of trading business by making more rapid than the imposition and collection of customs duties, etc. on imported and exported goods, taking into account the national economic importance and special characteristics

Meanwhile, Article 21(1)1 of the Customs Act provides that the provisions of Article 270(5) of the Customs Act concerning the exclusion period of customs duties are inconsistent with the provisions of Article 270(5) of the Customs Act concerning the crime of evading customs duties, and Article 270(5) of the Customs Act provides that “any person who has received a refund of customs duties in an unlawful manner shall be punished by imprisonment with prison labor for not more than three years or by a fine not exceeding five times the amount of customs duties refunded. In this case, the customs collector shall collect the amount of customs duties

In light of the legislative intent of the provision on the short-term exclusion period of customs duties, etc. and the compliance with the provision on the crime of evading customs duties, etc., the phrase “where customs duties have been refunded by unlawful means” under Article 21(1)1 of the Customs Act can be interpreted the same as “a person who has received a refund of customs duties by unlawful means” under Article 270(5) of the same Act, and such interpretation also seems to conform to the principle of strict interpretation of the tax law.

Article 270(5) of the Customs Act provides, however, the term "unfair means" means any act that enables a taxpayer to evade customs duties as a result, and that is recognized as unlawful by social norms (see Supreme Court Decision 99Do3190, Feb. 8, 2000). The term "an act of unlawfully refunding customs duties, which is established by such unlawful act, means that a taxpayer commits an unlawful act or intends to commit an unlawful act while recognizing the fact that the act constitutes an unlawful act and that the act constitutes an unlawful act and the result of the wrongful refund occurs (see Supreme Court Decision 2004Do817, Jun. 29, 2006). Ultimately, the term "in cases where customs duties are refunded by unlawful means" subject to five years of the exclusion period of imposition as provided in Article 21(1)1 of the Customs Act should be interpreted as the same.

(3) According to the facts acknowledged earlier in this case, Nonparty 2, the representative of Nonparty 1 Co., Ltd., the Plaintiff’s ship oil supplier, illegally shipped the instant oil to Korea, sold it, and forged a false oil supply receipt with the intention of selling the instant oil normally on 42 occasions, and based on this, submitted to the Plaintiff with a certificate issued by the head of Busan Customs Office for bringing-in (loading) the export goods subject to refund. The Plaintiff submitted the above certificate 42 times to the Defendant and received a refund of customs duties, etc. on the ground that the instant oil was supplied to an overseas ship. Thus, it is sufficiently recognized that the customs duties, etc. on the instant oil were illegally refunded.

However, in addition, although the plaintiff knew that the oil of this case was not supplied to an overseas ship by Nonparty 2 and illegally leaked to the Republic of Korea, or that the contents of the oil supply receipt or the certificate of carrying in (loading) the export goods subject to refund of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's oil of this case's case's oil of this case's oil of this case's oil of this case's oil of this case's

Therefore, it is difficult for the Plaintiff to be deemed to have received customs duties, etc. on the instant oil by “illegal means,” and thus, the exclusion period of imposition of customs duties, etc. on the instant oil shall be not five years but two years.

However, each of the dispositions of this case was made only on September 19, 2007 and November 13, 2007, after the two-year exclusion period elapsed from the day following the day when the Plaintiff received the refund of customs duties, etc. on the oil of this case on 42 occasions between October 15, 2002 and June 14, 2004. Thus, each of the dispositions of this case was null and void.

3. Conclusion

Thus, each of the dispositions of this case is invalid without any need to examine the remaining arguments of the plaintiff, and it is also allowed to seek revocation of the invalidation declaration against the invalid disposition. Thus, the plaintiff's claim of this case seeking revocation of each disposition of this case is justified.

However, since the judgment of the first instance court is partially unfair with different conclusions, the part against the plaintiff in the judgment of the first instance is revoked and the corresponding plaintiff's claim is accepted, and the defendant's appeal is dismissed as it is without merit. It is so decided as per Disposition.

[Attachment]

Judges Yoon Jin-man (Presiding Judge) Kim Jong-hee