Cho High-2016-China-0081 (2016.08)

Simple mixture of oil and light oil constitutes an act of manufacturing fake petroleum products.

The mixture of oil and light oil in an oil storage tank installed in a vehicle for the purpose of using the vehicle as fuel at the same time shall constitute an act of manufacturing fake petroleum products prescribed by the Petroleum Business Act.

Article 2 Taxation and Tax Rate of Traffic, Energy and Environment Tax

Article 3 of the Enforcement Decree of the Traffic, Energy and Environment Tax Act

2016Guhap5035 Traffic, Energy and Environment Tax, etc. to revoke the disposition of imposition.

AA

BB Director of the Tax Office

November 10, 2016

November 24, 2016

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

[Attachment 1] The imposition of each traffic, energy, environment tax and education tax (including each additional tax) against the plaintiff on the date of each disposition indicated in the disposition list shall be revoked by the defendant.

1. Details of the disposition;

A. On May 21, 2014, the Plaintiff, who runs a cargo transport business and manufactures fake petroleum products by mixing them with light oil (hereinafter “instant criminal act”), was prosecuted as a violation of the Petroleum and Petroleum Substitute Fuel Business Act, and was convicted of having been sentenced to a fine of 5 million won on the grounds that the instant criminal act was committed, and thus became final and conclusive around that time.

B. On July 3, 2015 and July 6, 2015, the Defendant calculated an amount equivalent to 40/100 of the tax amount payable without filing a tax return under Article 47-2(2) of the Framework Act on National Taxes as additional tax ("additional tax without filing a tax return") on the ground that the Plaintiff failed to file a tax base return by the statutory due date of return due to unlawful acts, etc. against the Plaintiff, and imposed an amount equivalent to 40/10 of the tax amount without filing a tax return by the statutory due date of return. [Attachment 2] As to each act of manufacturing fake petroleum products on the list of crimes (hereinafter "traffic tax, etc.") on each taxable period, each disposition imposing an amount of 51,585,950 won in total and education tax (including each additional tax) and 7,737,800 won in total.

C. On December 31, 2015, the Plaintiff filed an objection and filed a request for a trial with the Tax Tribunal. On April 8, 2016, the Tax Tribunal corrected the amount of tax equivalent to 20/100 of the amount of tax payable without filing a tax return under Article 47-2(1) of the Framework Act on National Taxes as additional tax (hereinafter “additional tax for filing a tax return”) on the ground that the said disposition does not constitute a case where the Plaintiff did not file a tax return due to an unlawful act, and made a decision to dismiss the remainder of the appeal.

D. Accordingly, the defendant issued a disposition to correct the previous disposition against the plaintiff to the sum of 45,178,620 won including traffic tax, and the total amount of education tax of 6,776,730 won (including additional tax), such as the traffic tax, etc. for each taxable period (hereinafter "each of the original dispositions") (hereinafter "each of the parts remaining after the reduction as above") as stated in the disposition list.

Grounds for Recognition

Gap evidence 1, Gap evidence 2-1 through 16, Gap evidence 3, Eul evidence 2-1 through 16, and the purport of the whole pleadings

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

A. Summary of the plaintiff's assertion

① The Plaintiff is merely a mixture of purchasing light oil and oil to use it as fuel for the instant vehicle, and it does not constitute an act of manufacturing fake petroleum products, since it does not undergo a special physical and chemical process.

② Although the 2,00-liter and 1,000-liter are not capable of drinking petroleum exceeding 3,00-liter per time, part of the crime sight table listed in the relevant criminal judgment (attached Form 2) is calculated mistakenly as manufacturing fake petroleum products exceeding a total of 3,000-liter per time by the Plaintiff, each of the dispositions of this case, which is calculated based on the amount of oil usage, such as the crime sight table, is unlawful. In addition, each of the dispositions of this case, which is calculated on the basis of the amount of oil usage, including the above crime sight table, is unlawful. In addition, the portion that the Plaintiff manufactured fake petroleum products on July 20, 201 and September 3, 2012, the Plaintiff did not directly purchase fake petroleum products around October 2012, the volume of diesel oil storage tank installed, the volume of fake petroleum products purchased on the relevant date, and the ratio of fake petroleum products purchased on the same date, and the Plaintiff purchased it on the 2016-201.

③ Since the Plaintiff did not know that there was a tax liability even when he consumes fake petroleum products, it was unlawful to impose penalty tax on the Plaintiff even though there was a justifiable reason for neglecting the duty to report.

(b) Related statutes;

[Attachment 3] The entry of relevant Acts and subordinate statutes are as follows.

C. Determination

(1) As to the argument

According to Article 2 subparagraph 10 of the Petroleum and Petroleum Substitute Fuel Business Act (hereinafter referred to as the "petroleum Business Act"), fake petroleum products are manufactured by any of the following methods, such as combustion, additives, and any other name, and are manufactured for the purpose of using or using as fuel for automobiles under Article 2 subparagraph 1 of the Automobile Management Act and vehicles and machinery (referring to using gasoline or light oil as fuel) prescribed by Presidential Decree, and Article 2 subparagraph 10 (a) of the same Act provides for "the method of mixing other petroleum products (including other petroleum products whose grade is different) with petroleum products" as one of the manufacturing methods.According to Article 29 (1) subparagraph 1 and Article 44 subparagraph 3 of the Petroleum Business Act, anyone is prohibited from manufacturing, importing, storing, transporting, keeping, or selling fake petroleum products, and anyone who violates this provision provides for criminal punishment.

The legislative intent of the above provision is to protect the health and the environment of the people by preventing the distribution of fake petroleum products with low quality as fuel for automobiles, etc., thereby securing the distribution order of petroleum products, and ultimately protecting consumers, and by preventing the emission of harmful exhaust gases to human body and the environment in fake petroleum products with low quality.

The Plaintiff’s act of mixing oil and light oil in an oil storage tank installed in the vehicle loaded for the purpose of using the instant vehicle as fuel at the same time constitutes an act of manufacturing fake petroleum products prescribed by the Petroleum Business Act and a criminal judgment of conviction against the instant criminal act became final and conclusive. The Plaintiff’s assertion ① has no merit.

(2) As to the argument

(A) Even if the facts acknowledged in the original civil lawsuit or tax lawsuit are not subject to detention, the facts established in the final and conclusive criminal judgment cannot be rejected without permission, unless there are extenuating circumstances that make it difficult to employ them (see, e.g., Supreme Court Decision 2010Du23378, Aug. 17, 2012).

(B) From July 20, 2012 to November 6, 2013, the Plaintiff was subject to criminal punishment for committing the act of manufacturing fake petroleum products by mixing it with 36 litres and 2,513 litres and 36 litres and 2,513 litres and 36 litres and 2,513 litres and 36 litres and 36 litres and 2,513 litres and 9 litres and 9 litres, etc. of the instant vehicle storage tank between July 20, 2012 and November 6, 2013. According to the Plaintiff’s act of manufacturing fake petroleum products, part of the Plaintiff’s act of manufacturing fake petroleum products exceeds 3,00 litres of 3,00 litres from the instant vehicle storage tank’s capacity, and the Plaintiff’s act of mixing it with the Plaintiff’s 201 wres and 2013 wres and 94 wres and

However, the facts acknowledged earlier and the statements in Gap evidence Nos. 5-1, 2, 6, and 7, each of the following circumstances, which can be recognized by comprehensively considering the overall purport of pleadings, namely, (i) the quantity of light oil and light oil generated at the same date by the opposite contractual party based on the oil table and the statement of transactions prepared in connection with the transaction with the plaintiff, is calculated as to the light oil and light oil purchased at the same date; (ii) the plaintiff recognized all of the relevant oil transaction details and the criminal acts of this case in the course of investigation and criminal trial; (iii) the plaintiff purchased two oil storage tanks from the investigative agency on February 2012 and installed them in the instant vehicle; and (iv) the plaintiff requested that a mixture of light oil and light oil had been traded with oil from the relevant gas station at the end of two months after the purchase of oil only from the oil station at the same time; and (v) the transit and light oil have been supplied with the consent of the relevant gas station at the same time; and (v) there is no possibility to exclude them from this case’s a criminal judgment.

(3) As to the assertion

(A) Article 2(1)2 of the Traffic Tax Act provides for "in cases where a taxpayer fails to file a return on tax base of national tax (including preliminary return and interim return, education tax Act, Act on Special Rural Development Tax and Comprehensive Real Estate Holding Tax), and Article 3 subparag. 2(b) of the Enforcement Decree of the Traffic Tax Act stipulating the items and kinds of the taxable goods upon delegation from Article 2(2) provides for "franchising petroleum products similar to light oil under Article 2 subparag. 10 of the Petroleum Business Act" as taxable goods. Pursuant to Article 3 subparag. 1 of the Traffic Tax Act, a person manufacturing and shipping taxable goods is obliged to pay traffic tax. Article 3 subparag. 3 of the Education Tax Act provides that a person liable to pay traffic tax, etc. under the Traffic Tax Act is obliged to pay education tax. Meanwhile, Article 47-2(1) main sentence of the Framework Act on National Taxes provides that if a taxpayer fails to file a return on tax base of national tax pursuant to the tax law by the statutory deadline for filing a return, the amount of additional tax shall not be paid as an amount equivalent to 10%.

(B) In light of the above legal principles, as recognized earlier, the Plaintiff manufactured and removed fake petroleum products similar to diesel products under Article 2 subparag. 10 of the Petroleum Business Act, which correspond to the taxable goods under the Traffic Tax Act. Accordingly, the Plaintiff is obligated to pay the traffic tax, etc. under the Traffic Tax Act and the education tax under the Education Tax Act. Therefore, even if the Plaintiff was unaware of the occurrence of reporting and tax liability by manufacturing and shipping fake petroleum products, it cannot be deemed that the land or mistake under the relevant Acts and subordinate statutes is justifiable grounds for the Plaintiff’s failure to report and tax liability, and there is no other evidence to acknowledge such circumstances.

3. Conclusion

Therefore, the claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.