[1] The purpose of Article 4(1) of the Customs Act concerning the imposition of internal taxes on imported goods and the application of the requirements for substantial taxation of additional taxes on the internal tax

[2] The legislative purport of Article 4(2) of the Customs Act concerning the imposition of additional duties, etc.

[3] The purport of Article 71 (1) of the former Enforcement Decree of the Value-Added Tax Act concerning the collection of value-added tax on the import of goods

[1] In imposing, collecting, refunding, disposing of, or disposing of internal taxes, additional taxes, etc., Article 4(1) of the Customs Act provides that the first application of the provisions of the Customs Act in preference to the procedures, such as imposition, collection, refund, disposal of deficit, etc., may bring about simplification of the procedures. Thus, the first application of the provisions of the Customs Act in order to promote the efficiency of tax administration and the convenience of taxpayers is deemed to have priority in the application of the provisions of the Customs Act to the purport that the provisions of the Customs Act should first apply to substantive taxation requirements such as taxable objects, taxpayers, tax bases, tax rates, etc. Furthermore, when the customs collector imposes and collects internal taxes such as value-added taxes, it is reasonable to say that the provisions of the Customs Act, such as the Value-Added Tax Act, should be applied to the substantive taxation requirements for calculating the imposition or amount of taxes, and as such, the relevant provisions of the Customs Act conflict with those of the Customs Act should be applied to the additional taxes.

[2] Article 4(2) of the Customs Act provides that "the provisions on the imposition, collection, refund, etc. of additional duties, etc. under the provisions of the Customs Act concerning the imposition, collection, refund, etc. of customs duties shall apply to the imposition, collection, refund, etc. of additional duties, etc. under the provisions of the Customs Act", the purport of applying the provisions concerning the imposition, collection, refund, etc. of additional duties, etc., which are the principal tax, to the imposition, collection, refund, etc. of additional duties, etc. concerning customs duties, and the purport of applying the provisions concerning additional

[3] Article 23(3) of the Value-Added Tax Act provides that the head of a customs office shall collect the value-added tax on the import of goods in the same manner as customs duties are collected, and the provision of the Presidential Decree on matters that meet the substantive requirements for taxation, such as the subject of imposition of the additional tax, the method of calculating the amount of tax, or the requirements for reduction or exemption, cannot be permitted under the principle of no taxation without the explicit delegation of the Act. In light of Article 71(1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 17460, Dec. 31, 2001), Article 71(1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 17460, Dec. 31, 2001) provides that Article 42 of the Customs Act

[1] Article 4 (1) of the Customs Act / [2] Article 4 (2) of the Customs Act / [3] Article 23 (3) of the Value-Added Tax Act, Article 71 (1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 17460 of Dec. 31, 2001)

El Deposit Korea Co., Ltd.

Seoul Customs Office (Law Firm Chungcheong, Attorneys Kim Dong-dong et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2004Nu16913 delivered on July 22, 2005

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

The grounds of appeal are examined.

1. As to the method of calculating the additional tax amount of this case

A. Article 4(1) of the former Customs Act (amended by Act No. 7009 of Dec. 30, 2003; hereinafter “former Customs Act”) provides that “When the provisions of the Customs Act conflict with those of the Value-Added Tax Act, the Special Consumption Tax Act, the Education Tax Act, the Education Tax Act, etc. concerning internal taxes, such as value-added tax, special consumption tax, education tax, etc. imposed and collected by the head of the relevant customs office on imported goods, and the imposition, collection, refund, disposal of such additional taxes, etc., the provisions of the

In imposing, collecting, refunding, or disposing of internal taxes, additional taxes, etc., the provisions of the Customs Act on customs duties can first be applied to the procedural matters, such as imposition, collection, refund, disposal of deficit, etc., and the simplification of the procedures may bring about the simplification of the procedures. Thus, it is reasonable to say that the provisions of the Customs Act should first be applied to the purport of promoting the efficiency of tax administration and the convenience of taxpayers, and that the provisions of the Customs Act should not be first applied to the substantive taxation requirements such as taxable objects, taxpayers, tax bases, tax rates, etc.

In other words, when the head of a customs office imposes and collects a principal tax such as value-added tax on imported goods, the relevant provisions of individual tax law such as Value-Added Tax Act should be applied to the subject of imposition or assessment of the amount of tax, and as such, the relevant provisions of the Customs Act conflict with those of the Customs Act, the provisions of the Customs Act should be applied to the additional tax.

In order to facilitate the exercise of taxation right and the realization of tax claim, additional tax is a kind of administrative sanction imposed on a taxpayer who violates an obligation under the tax law without justifiable reason. Additional tax is to be collected by adding it to the principal tax amount calculated under the relevant tax law. However, it is to ensure the convenience of collection procedure and additional tax is in essence different from that of the principal tax. Therefore, the imposition of additional tax is one of the independent taxation, and it is not different from the other tax.

In addition, Article 4(2) of the former Customs Act provides that "the provisions on the imposition, collection, refund, etc. of additional duties, etc. under the provisions of the Customs Act shall apply to the imposition, collection, refund, etc. of additional duties, etc. under the provisions of the Customs Act", the purport of applying the provisions on the imposition, collection, refund, etc. of additional duties, etc., which are the principal tax, to the imposition, collection, refund, etc. of additional duties, etc. concerning the internal taxes imposed and collected by the head of the customs office, and the purport of applying the provisions on additional duties

In the same purport, the court below is justified in holding that the provision of Article 4 (1) and (2) of the former Customs Act is not applicable in preference to the provisions of the Customs Act or that the provision of Article 4 (1) and (2) of the former Customs Act is not applicable in relation to the substantive taxation requirements, such as the object of imposition of the additional tax or the method of calculating the amount of the tax, when the defendant imposes additional tax on the imported goods of this case on the special consumption tax, education tax, and value-added tax of this case.

The gist of the grounds of appeal in this regard is that since the penalty tax is imposed in relation to the performance of obligations in the procedure, such as imposition and collection of principal tax, all of the matters concerning the penalty tax above should be applied preferentially. However, such grounds of appeal cannot be accepted in light of the legal principles as seen earlier. The court below did not err by misapprehending the legal principles as to the additional tax collected by the customs collector, as otherwise alleged in the grounds of appeal

B. Furthermore, considering the purport of Article 23(3) of the Value-Added Tax Act stipulating that the head of a customs office shall collect the value-added tax on the import of goods in the same manner as customs duties are collected, and the fact that the provision of the Presidential Decree on matters that meet the substantive requirements for taxation, such as the subject of imposition of the additional tax, the method of calculating the amount of tax, or the requirements for reduction or exemption, cannot be permitted under the principle of no taxation without the explicit delegation of the Act, Article 71(1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 17460, Dec. 31, 2001) provides that Article 71(1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 17460, Dec. 31, 2001) provides that Article 42 of the Customs Act shall apply mutatis mutandis to the collection of the value

2. As to the illegality of the instant duty payment notice procedure

The lower court determined that the Defendant’s notice of imposition of the penalty tax as one of the total penalty tax without specifying the individual amount of the penalty tax for each item of tax, such as special consumption tax, value-added tax, education tax, etc., was unlawful on the ground that the procedure for imposing

However, Article 2 of the National Tax Collection Act (amended by Presidential Decree No. 17467 of Dec. 31, 2001) provides that the provisions of the Customs Act prior to the National Tax Collection Act shall apply to the procedures for imposing and collecting internal taxes imposed and collected by the head of the relevant customs office. As such, Article 4(1) of the former Customs Act provides that the provisions of the Customs Act prior to the National Tax Collection Act shall apply to the procedures for the tax payment notice, such as the matters to be stated in the tax payment notice. Article 38(5) of the former Customs Act and Articles 34(2) and (3), and 36 of the former Enforcement Decree of the Customs Act (amended by Presidential Decree No. 17467 of Dec. 31, 200) provide that if a taxpayer fails to pay taxes by self-return, the head of the relevant customs office shall rectify the amount of taxes. In this case, ① the name, standard and quantity of the relevant goods, ② the item, tax base and amount of taxes before correction, ③ the item, tax amount of the relevant goods, etc.

According to the records, the defendant may recognize that he/she issued a notice of correction of duty and a notice of tax payment to the plaintiff in accordance with the form prescribed in the "Public Notice on the Performance of Customs Duties" published by the Korea Customs Service at the time of the instant disposition. If there are circumstances, it is difficult for the court below to determine that there is a defect in the procedure of the assessment and notice of this case even though it is difficult to find any defect in the procedure of the assessment and notice of this case, the court below erred by misapprehending the legal principles

However, as seen earlier, insofar as the grounds for taxation disposition cited by the defendant as the grounds for taxation disposition in this case and the grounds for taxation are not legitimate, the disposition in this case shall not be exempted from being unlawful unless there is any change in the grounds for taxation disposition, and thus, the decision of the court below that ordered the revocation of the disposition of the additional tax in this case is just in its conclusion, and therefore, the above error of the court below does not affect the conclusion of the judgment. Accordingly, the defendant'

3. Conclusion

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 Shin Hyun-chul (Presiding Justice)