[1] Method of determining a tariff classification for imported goods under Article 50 (1) of the former Customs Act

[2] In a case where Gap corporation et al. imported Aluminum in the form of "market or sheet" that can be used as a raw material for the purpose of using Aluminum as a raw material, the case affirming the judgment below holding that although Gap corporation et al. intended to use Aluminum as a raw material for Aluminum products, the item number of imported goods according to the tariff schedule is not 7601.10-000 but 7606.11-9000 higher in terms of the nature of the goods

[3] The case affirming the judgment below holding that the above disposition does not violate the principle of trust protection, in case where Gap corporation, etc., filed a return on the import of Aluminium with tariff rate of 1% by tariff rate of 7601.10-000, and the head of Busan customs office accepted it, and later issued a disposition to correct the customs duty omitted due to the product error, etc. since the above goods were deemed to have higher tariff rate of 7606.11-900

[1] Article 16 of the former Customs Act (amended by Act No. 9410 of Feb. 6, 2009; hereinafter “the Act”) provides that customs duties shall be imposed according to the nature and quantity of the goods at the time of filing an import declaration. “General Rules on the Interpretation of the Tariff Schedule” under Article 50(1) of the Act provides that the tariff classification for legal purposes shall be first determined according to the terms of each subparagraph and the relevant parts or the states of the relevant goods. Thus, the tariff classification for imported goods shall be determined according to various objective factors, such as the main characteristics, functions, purposes, ingredients, processing level, etc. of the goods at the time of filing an import declaration. The tariff classification for the relevant goods shall be determined according to the tariff schedule, and the corresponding item number shall be determined according to the subjective use of the person liable for duty payment for the relevant goods or the actual use after importing them, barring special circumstances.

[2] In a case where Gap corporation, etc. imported Aluminum for the purpose of using Aluminum as a raw material and imported it in the form of "market or sheet" which can be used as goods by itself rather than "ing leader" for the exporter's tax convenience, the case affirming the judgment below which held that even if Gap company, etc. had the purpose of using Aluminum as a raw material for Aluminum products, the product number of imported goods pursuant to the tariff schedule pursuant to the attached Table of Article 50 (1) of the former Customs Act (amended by Act No. 9410 of Feb. 6, 2009) is not the "insul of Aluminum which is not mixed" but the "insul of Aluminum" as referred to in Article 7606.11-9000 of the former Customs Act (amended by Act No. 9410 of Feb. 6, 200) with higher tariff rate than the "insulinum of Aluminum."

[3] The case affirming the judgment below holding that the above disposition does not violate the principle of trust protection on the grounds that, in case where Gap corporation's import of Aluminass, etc. reported as an item number 7601.10-000 of the tariff schedule with 1% of the tariff rate, the head of Busan customs office accepted it, and later the above goods were deemed as a item number 7606.11-9000 with higher tariff rate, and later the disposition of rectifying the omitted customs duties, etc. on the ground of item errors, the case affirmed the judgment below holding that the above disposition did not violate the principle of trust protection on the grounds that the Jinsle Bas, which was imported by applying 1% of the tariff rate, had a form entirely different from the above goods, has a form of processing degree and form, and the acceptance of import declaration was merely an act of fact, and it cannot be deemed as a public opinion list, and since Gap corporation, etc. can have been identified in advance as a certain item using the

[1] Articles 16 and 50(1) of the former Customs Act (amended by Act No. 9410 of Feb. 6, 2009) / [2] Articles 16 and 50(1) of the former Customs Act (amended by Act No. 9410 of Feb. 6, 2009) / [3] Article 15 of the former Framework Act on National Taxes (amended by Act No. 9911 of Jan. 1, 2010), Articles 16, 50(1), 38-3, and 84 of the former Customs Act (amended by Act No. 9410 of Feb. 6, 2009), Article 98(1) of the former Enforcement Decree of the Customs Act (amended by Presidential Decree No. 21305 of Feb. 4, 2009)

주식회사 화승네트웍스 외 1인 (소송대리인 법무법인 케이씨엘 담당변호사 고영주 외 2인)

Head of Busan Customs Office

Busan High Court Decision 2010Nu6854 decided May 13, 2011

All appeals are dismissed. The costs of appeal are assessed against the plaintiffs.

The grounds of appeal are examined.

1. Regarding ground of appeal No. 1

Article 50(1) of the former Customs Act (amended by Act No. 9410, Feb. 6, 2009; hereinafter “Act”) provides that the tariff rate shall be set in accordance with the attached Schedules of Tariff. Accordingly, the tariff rate shall be set in accordance with the attached Schedules of Tariff. Accordingly, the tariff rate shall be individually prescribed for each item of goods and each item in order to classify imported goods into goods subject to taxation.

Meanwhile, Article 16 of the Act provides that customs duties shall be imposed according to the nature and volume of the goods at the time of filing an import declaration. The "Common Provisions on the Interpretation of Tariff Schedules" in the Tariff Schedules for legal purposes are to be first determined according to the terms in each subparagraph and the relevant parts or the week of the relevant parts or chapters. As such, the tariff classification for imported goods shall be determined according to various objective factors, such as the main characteristics, functions, purposes, ingredients, and processing of the goods at the time of filing an import declaration, and then the corresponding item number shall be determined in accordance with the Tariff Schedules, unless there are special circumstances. The taxpayer's subjective purpose of use or actual use after the import of the goods in question shall not be considered.

According to the reasoning of the lower judgment (including the reasoning of the first instance judgment cited by the original court; hereinafter the same shall apply), the lower court recognized the facts as indicated in its reasoning after compiling the adopted evidence. The lower court determined that the instant goods fall under the item number 7606 of the Tariff Schedules because (i) the two thickness is equal and exceeds 0.2mm and does not exceed 1/10 of the width; (ii) the content of metal and hydrogen is 9.7%, and the content of which does not exceed 1% and is less than 0.1%, and thus, the lower court determined that the instant goods fall under the category 10-10.7mm of the instant tariff schedule, and even if the content of aluminium falls under the category 10-6mm of the instant goods, the tariff classification and 90-10mm of the instant goods does not fall under the category 10-10.6mm of the tariff schedule.

In light of the legal principles of the relevant statutes and tariff classification as seen earlier, the judgment below is just and acceptable, and there is no error in the misapprehension of legal principles as to the interpretation and application of the Tariff Schedules.

2. Regarding ground of appeal No. 2

In general, in order to apply the principle of trust protection to the acts of tax authorities in tax and law relations, the tax authorities must issue a public opinion list that is subject to trust to taxpayers; ② there is no reason attributable to taxpayers for the trust of the tax authorities to believe that the name of the opinion list of the tax authorities is justifiable; ③ the taxpayer must trust the opinion list of the tax authorities; ④ the tax authorities shall impose a disposition contrary to the above opinion list, thereby infringing the taxpayer’s interest (see, e.g., Supreme Court Decision 84Nu593, Apr. 23, 1985).

According to the reasoning of the judgment below, the court below held that, prior to the import of the goods of this case, Jindo, which was imported with 1% rate of 1% applied before the import of the goods of this case, has a form entirely different from the goods of this case, and the thickness and surface were bound to be classified as Aindozinum in terms of the degree and form of Aindominium as Aindominium with no thickness, and there is no evidence to prove that the plaintiffs, after the import of the goods of this case, deemed the goods of this case as Aindoinum price and had been conducted customs procedures by applying 1% of the rate of customs duty, and merely because the acceptance of import declaration is merely a factual act, the acceptance of import declaration of the goods of this case cannot be deemed as a public opinion statement that is trusted in each disposition of this case, and since the plaintiffs are well aware that the goods of this case are treated as neither raw materials nor raw materials in China, it cannot be identified in advance by the plaintiffs, and thus, it does not violate the above principles of trust and protection.

3. Conclusion

Therefore, all appeals are 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 on the bench.

Justices Lee In-bok (Presiding Justice)