Whether the transfer of goods at a successful bid by offering the goods imported as tax-free goods as security under the conditions of export obligation constitutes the transfer of goods

If the goods imported as duty-free goods are provided as security for claims by a person on the condition of export, the goods are sold to another person without approval from the head of the customs office and thus the reason for additional collection of customs duties arises.

Article 28 of the former Customs Act

[Defendant-Appellee] Plaintiff 1 et al.

Head of Busan Customs Office

Daegu High Court Decision 74Gu110 delivered on June 9, 1977

The appeal shall be dismissed. The costs of appeal shall be borne by the plaintiff.

The grounds of appeal are examined.

1. Based on its reasoning, the lower court determined that: (a) the goods at issue in the instant case were exempted from duty on June 4, 1969 and February 4, 1970 by the Nonparty on the condition that they should perform their export obligations for five years from the date of introduction; and (b) the Plaintiff performed its export obligations by taking over them under the Defendant’s approval on October 12, 1970; (c) the Plaintiff offered them as security for a loan obligation to the non-party Korean commercial bank of the non-party New Trade Co., Ltd. on March 20, 1971; (d) thereafter, as a result of the auction conducted on March 28, 1972, the fact that the said goods were acquired by the said Korean Commercial Bank and confirmed, and the Plaintiff’s above so-called was eventually transferred to the Korean Commercial Bank without the approval of the customs collector; and (c) thus, the reason for exemption from duty under Article 28(3)

2. Article 28 (1) of the Customs Act (amended by Act No. 1976 to 2162 of the Act) and Article 28 (2) of the Customs Act at the time of the adjudication above may reduce or exempt customs duties if the goods to be used for the specific purpose from 1 to 10 are imported, and Article 28 (2) of the same Act shall not use or transfer the goods exempted from customs duties for any purpose other than that of each subparagraph of the preceding paragraph within five years from the date of import license: Provided, That the same shall not apply where prior approval is obtained from the customs collector as prescribed by the Presidential Decree, and Article 28 (3) of the same Act provides that if the goods referred to in each subparagraph of paragraph (1) are used for such purpose or are transferred for such purpose, customs duties shall be collected immediately after the import license is granted to the customs collector.

In addition, it is reasonable to interpret that the case where the goods imported as tax-free goods are offered as security to another person by means of an auction without the approval of the customs collector if the goods are sold to the third person by auction due to the exercise of the security right as above, and in such a case, the reason for additional collection of the exempted customs duties arises. Thus, the decision of the court below to this purport is just and there is no charge of additional collection of the exempted customs duties, and there is no ground for additional collection of customs duties only for the portion of the exempted customs duties to be fulfilled. Thus, the theory of the lawsuit cannot be adopted since there

In addition, the judgment of the court below has no evidence that the buyer after the successful bid had fully performed the export duty. However, in light of the previous reasoning, it is unnecessary and the mistake does not affect the judgment.

Therefore, the appeal shall be dismissed and the costs of the lawsuit shall be borne by the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Jeong Tae-won (Presiding Justice)