In a case where Gap corporation, which is a small and medium enterprise, had Eul corporation, etc. manufacture and process integrated circuits goods by combining Gap corporation's domestic goods and foreign goods of Eul corporation, etc. in a bonded factory; brought them into Korea from the bonded factory; exported goods without undergoing the processing procedure; supplied them again to the domestic manufacturer; and received "simplified fixed amount refund"; and the head of the competent customs office imposed customs duties upon Gap corporation, the case affirming the judgment below that the above disposition was lawful.

Articles 13(1) and (2), and 21(1)4 of the former Act on Special Cases Concerning the Refund of Customs Duties, etc. Levied on Raw Materials for Export (Amended by Act No. 10817, Jul. 14, 201); Article 2 subparag. 1 and Article 188 of the former Customs Act (Amended by Act No. 10424, Dec. 30, 201); Article 3-2 subparag. 1 of the former Customs Act; Article 3-3 subparag. 1 of the Public Notice on the Refund of Customs Duties, etc. Levied on Raw Materials for Export

Eela Co., Ltd. (Law Firm LLC, Attorneys So-young et al., Counsel for the plaintiff-appellant)

Head of Sung-nam Customs Office

Seoul High Court Decision 2012Nu15991 decided January 25, 2013

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

Article 13(1) of the former Act on Special Cases Concerning the Refund of Customs Duties, etc. Levied on Raw Materials for Export (amended by Act No. 10817, Jul. 14, 201; hereinafter “Special Cases Concerning Refund”) provides that “When the Commissioner of the Korea Customs Service deems it necessary to simplify the procedures for refunding customs duties, etc. on export goods of small and medium enterprises, he/she may determine and publicly notify a fixed amount refund rate table for each export goods on the basis of the average refund amount of customs duties, etc. or average tax amount, etc. paid on raw materials for export as prescribed by the Presidential Decree.” Article 21(2) provides that “the amount determined in the fixed amount refund rate table shall be deemed as the customs duties, etc. paid at the time of the import of raw materials for export required for the production of the relevant goods, and Article 21(1)4 provides that “the fixed amount refund rate or excess refund rate shall not be applied to the goods imported from a foreign country to Korea with the fixed amount refund rate of customs duties imposed on such raw materials for export.”

In accordance with the reasoning of the judgment of the court of first instance, the court below affirmed the following facts: ① the Plaintiff, a small and medium enterprise, made ESS Korea Co., Ltd. manufacture and process integrated circuits (hereinafter “instant goods”) by combining wafers, a domestic goods of the Plaintiff’s supply, with wafers, which are foreign goods owned by them in his bonded factory; ② the Plaintiff exported the instant goods from its bonded factory after shipping them into Korea without undergoing separate processing procedures; supplied them again to domestic manufacturers; and subsequently applied for a simplified fixed amount refund pursuant to Article 13 of the Act on Special Cases Concerning Refund, etc.; and subsequently, the instant goods treated as “foreign goods” pursuant to the main sentence of Article 188 of the Customs Act constitute “goods supplied by export, etc. or by local credit, etc.” subject to exclusion from the application of simplified fixed amount refund under Article 3-2-3 subparag. 1 of the Customs Act, the court below determined that the instant disposition of collecting customs duties on the basis of a simplified fixed amount refund rate is lawful.

In light of relevant provisions and legal principles, and records, the judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the exclusion from the application of simplified fixed amount refund under Article 3-2-3 of the Public Notice of the Handling of Refund Affairs Act as

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Min Il-young (Presiding Justice)