[1] Legislative intent and application of Article 26 of the former Petroleum Business Act

[2] Whether Article 26 of the former Petroleum Business Act and Article 30 of the Enforcement Decree of the same Act restrict the appearance of eco-friendly alternative fuels newly created by the development of science and technology by restricting the appearance of environmentally friendly alternative fuels (Article 22(2)) of the Constitution violates Article 26 of the former Petroleum Business Act and Article 30 of the Enforcement Decree of the same Act (negative) and economic order provisions based on the protection of rights of inventors, scientists and engineers (Article 22(2)), environmental rights (Article 35), and economic freedom and respect of individuals and enterprises

[3] Whether the application of Article 26 of the former Petroleum Business Act, which prohibits the manufacture, etc. of pseudo petroleum products, is excluded solely based on the fact that it was determined that it satisfies the manufacturing standards of additives under the Clean Air Conservation Act (negative)

[4] The case affirming the court below's decision that since the defendants' products manufactured by mixing petroleum products and petrochemicals, etc. are premised on being used in mixing them with gasoline at the ratio of "40% of gasoline", they cannot be viewed as "foods" under Article 2 subparagraph 12 of the Clean Air Conservation Act, and they constitute pseudo petroleum products with low quality of gasoline, and the defendants have manufactured and sold them with a view to using them as fuel for automobiles even though they knew that they had no choice to use them as fuel for automobiles in fact as fuel for automobiles

[5] The meaning of pseudo petroleum products under Article 2 subparagraph 1 of the Traffic Tax Act and Article 3 of the Enforcement Decree of the same Act, which provide for the imposition of traffic tax

[1] The legislative purpose of Article 26 of the former Petroleum Business Act (amended by Act No. 7209 of March 22, 2004) is to contribute to the development of the national economy and the improvement of the people's lives by securing the proper quality of petroleum products in addition to the stabilization of supply and demand of petroleum (Article 1) and price stability (Article 26). In light of the fact that Article 26 of the same Act provides for the quality control of petroleum, the legislative purpose of Article 26 of the same Act is to protect consumers ultimately by preventing pseudo petroleum products with low quality from being distributed as fuel for automobiles, etc., thereby ensuring the distribution order of petroleum products, thereby protecting the health and the environment of the people by preventing the low quality of low exhaust gas harmful to human body and the environment from being emitted from pseudo petroleum products. Thus, the above provision is applicable to the production and sale of pseudo petroleum products with low quality of gasoline or light oil among those produced and sold for the purpose of using or using them as fuel for automobiles, etc.

[2] Article 26 of the former Petroleum Business Act (amended by Act No. 7209 of March 22, 2004) does not necessarily mean that the above provision infringes on the right to equality under the Constitution. Moreover, Article 30 of the former Enforcement Decree of the Petroleum Business Act (amended by Presidential Decree No. 18473 of July 20, 2004) provides that the energy which the Minister of Commerce, Industry and Energy deems necessary to expand the use of alternative energy under Article 2 of the Alternative Energy Development and Use and Diffusion Promotion Act and the energy which the Minister of Commerce, Industry and Energy announces to expand the use of alternative energy in order to improve the efficiency of energy use shall not be deemed as pseudo petroleum products. Thus, Article 26 of the former Petroleum Business Act and Article 30 of the Enforcement Decree of the same Act limit the appearance of eco-friendly alternative fuels newly created by the development of science and development of technology, thereby restricting the protection of rights of inventors, scientists and engineers (Article 22(2) of the former Petroleum Business Act), environmental rights (Article 35(1) of the basic economic order).

[3] Article 30 of the former Petroleum Business Act (amended by Act No. 7209 of March 22, 2004) and the Clean Air Conservation Act shall not be readily concluded that a law preferentially applies to all other laws. Article 26 of the former Enforcement Decree of the former Petroleum Business Act (amended by Presidential Decree No. 18473 of July 20, 2004) provides that "pseudo petroleum products under Article 26 of the former Enforcement Decree of the Petroleum Business Act may be used as fuel for automobiles, etc. regardless of their terms, such as combustion, additives, etc.," and Article 26 of the former Petroleum Business Act provides that "pseudo petroleum products under Article 41 of the Clean Air Conservation Act and Article 103 (1) of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Environment No. 144 of August 5, 2003) shall not be subject to Article 26 of the former Petroleum Business Act.

[4] The case affirming the court below's decision that since the defendants' products manufactured by mixing petroleum products and petrochemicals, etc. are premised on being used in mixing them with gasoline at the ratio of "40% of gasoline", they cannot be viewed as "foods" under Article 2 subparagraph 12 of the Clean Air Conservation Act, and they constitute pseudo petroleum products with low quality of gasoline, and the defendants have manufactured and sold them with a view to using them as fuel for automobiles with the knowledge that they had no choice but to use them as fuel for automobiles in fact as fuel for gasoline

[5] Article 26 of the former Petroleum Business Act (amended by Act No. 7209 of Mar. 22, 2004) aims to secure financial resources required for the expansion of traffic facilities such as roads and urban railroads. Thus, pseudo petroleum products under Article 2 subparagraph 1 of the Traffic Tax Act and Article 3 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 17973 of May 1, 2003) are limited to the application of Article 26 of the former Petroleum Business Act. Thus, pseudo petroleum products under Article 3 of the former Enforcement Decree of the Traffic Tax Act are pseudo petroleum products under Article 30 of the former Enforcement Decree of the Petroleum Business Act (amended by Presidential Decree No. 18473 of Jul. 20, 2004) and are used as substitute fuel for gasoline. Although the pertinent products can not be used independently, if they are added to gasoline and actually used as substitute fuel, if they play the role of consumption of gasoline.

[1] Article 26 of the former Petroleum Business Act (amended by Act No. 7209, Mar. 22, 2004; see Article 29 of the current Petroleum and Petroleum Substitute Fuel Business Act); Article 33 subparag. 3 (see Article 44 subparag. 3 of the current Petroleum and Petroleum Substitute Fuel Business Act) / [2] Article 26 of the former Petroleum Business Act (amended by Act No. 7209, Mar. 22, 2004; Article 29 of the current Petroleum and Petroleum Substitute Fuel Business Act; Article 30 of the former Enforcement Decree of the Petroleum Business Act (amended by Presidential Decree No. 18473, Jul. 204; see Article 22 subparag. 10 of the current Petroleum and Petroleum Substitute Fuel Business Act); Article 30 of the former Petroleum and Petroleum Substitute Fuel Business Act (amended by Act No. 18479, Mar. 20, 200; see Article 207 of the former Enforcement Decree of the Petroleum Business Act) / [3]

[1] [1] [3] [4] Supreme Court Decision 2004Do5529 decided Dec. 8, 2005 (Gong2006Sang, 136)

Defendant 1 and two others

Defendants

Attorneys Kim Yang-yang et al.

Seoul Central District Court Decision 2003No10866 delivered on August 11, 2004

All appeals are dismissed.

The grounds of appeal are examined.

1. As to the assertion of violation of the Constitution against Article 26 and Article 33 subparag. 3 of the former Petroleum Business Act

Article 26 of the former Petroleum Business Act (amended by Act No. 7209, Mar. 22, 2004; hereinafter the same) prohibits the production, sale, etc. of pseudo petroleum products by mixing petroleum products with other petroleum products or petrochemicals with other petrochemicals. Article 30 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 18473, Jul. 20, 2004; hereinafter the same shall apply) provides that the use of gasoline or light oil as fuel for automobiles under subparagraph 1 of Article 2 of the Automobile Management Act and machinery and vehicles under each subparagraph of Article 2 of the Enforcement Decree of the same Act (hereinafter “automobile, etc.”) shall be used as fuel of pseudo petroleum products (excluding energy prescribed in each subparagraph of the same), and the purpose of the former Petroleum Business Act is to protect the development of the national economy and improve the quality of petroleum products by securing the quality of petroleum products, such as petroleum products, and ultimately, to protect the manufacturing and sale of pseudo petroleum products as fuel for the purpose of protecting the quality of petroleum products and its quality.

In light of the premise of this interpretation, Article 26 of the former Petroleum Business Act and Article 33 subparagraph 3 of the same Article, which are the punishment provision, are not in violation of the principle of no punishment without law, the principle of prohibition of comprehensive delegation legislation, and the principle of excessive prohibition.

In addition, in the process of manufacturing petroleum products or revising the quality of petroleum products by petroleum refining business operators, the quality correction of the quality of pseudo petroleum products with MT added cannot be deemed as producing pseudo petroleum products for the purpose of using or using them as fuel for automobiles, etc. In addition, since the act of modifying the quality of such petroleum products does not harm the legislative intent of Article 26 of the former Petroleum Business Act, and thus it does not violate the above provision on additives produced by petroleum refining business operators to correct the quality of gasoline quality, it cannot be deemed that the above provision violates the constitutional right of equality. In addition, Article 30 of the former Enforcement Decree of the Petroleum Business Act provides that alternative energy under Article 2 of the Alternative Energy Development and Use and Diffusion Promotion Act and energy used and announced by the Minister of Commerce, Industry and Energy need not be deemed as pseudo petroleum products for the purpose of increasing the use and distribution of energy in order to improve the efficiency of energy use, and thus, it does not constitute a violation of the freedom of the former Petroleum Business Act and Article 26 of the Enforcement Decree of the same Act and Article 30(1) of the Environmental Act (2) and Article 9(1) of the Act.

The allegation in the grounds of appeal that the lower court erred by applying the law in violation of the Constitution is not acceptable.

2. As to the assertion of misapprehension of legal principles as to the validity of Article 41 of the Clean Air Conservation Act

The purpose of the former Petroleum Business Act is to stabilize the supply and demand and prices of petroleum and to improve the people's lives by securing the proper quality of petroleum (Article 1). The purpose of the Clean Air Conservation Act is to prevent air pollution from causing harm to public health and the environment, and to enable all citizens to live in a healthy and pleasant environment by managing and preserving the atmospheric environment in an appropriate and sustainable manner (Article 1). Thus, it cannot be readily concluded that the former Petroleum Business Act and the Clean Air Conservation Act apply preferentially to any other Act, and Article 30 of the former Enforcement Decree of the former Petroleum Business Act provides that "pseudo petroleum products under Article 26 of the Act may be used as fuel for automobiles, etc. regardless of their terms, such as sunshine, additives, etc." The fact that pseudo petroleum products under Article 26 of the former Petroleum Business Act are not subject to Article 41 of the Clean Air Conservation Act and Article 103(1)6 of the Enforcement Rule of the same Act (amended by Ordinance of the Ministry of Environment No. 5, Aug. 5, 2003).

In the same purport, the court below's decision that found the defendant guilty of the facts charged of this case by applying Article 26 of the former Petroleum Business Act on the ground that the above products fall under pseudo petroleum products manufactured for the purpose of using them or allowing them to use them as fuel for automobiles, etc. for the purpose of manufacturing additives under the Clean Air Conservation Act is proper, and there is no error of law by misapprehending the legal principles as to the effect of Article 26 of the former Petroleum Business Act and Article 41 of the Clean Air Conservation Act.

3. As to the misapprehension of legal principles as to additives under the Clean Air Conservation Act, and the assertion against the rules of evidence

Article 2 subparag. 12 of the Clean Air Conservation Act provides that chemical substances except substances consisting of only carbon and hydrogen, which improve the performance of automobiles or reduce emissions of automobiles by adding small quantity of automobile fuel, and are prescribed by the Ordinance of the Ministry of Environment. According to the records, additives generally used to improve the performance of automobiles and reduce emissions by preventing and improving various problems arising from gasoline incomplete combustion, and most of the additives include an opulon system including toxic substance and sulfur, so if many of them are added, it can be seen that it is inappropriate to use them as fuel such as automobiles in itself because it creates various harmful substances to human body or environment. In addition, the lower court determined that the lower court's determination that the lower court's use of additives as fuel in the Clean Air Conservation Act can not be seen as being 10% of the total quantity of gasoline under the premise that it can not be seen as being 4% of the total quantity of gasoline as fuel in the above Article 2 of the Clean Air Conservation Act because it can not be seen as being able to be used for the same purpose as the “clean Air Conservation Act” in light of the characteristics of the above.

4. As to the misapprehension of legal principles as to the application of Article 26 of the former Petroleum Business Act and the assertion of violation of the rules of evidence

Examining the evidence admitted by the lower court in light of the record, the instant melting is prohibited from using Meteph fuel in a case where the engine or parts of the automobile are not manufactured as internal alcohol materials or is not crypized with strong internal alcohol materials as a result of the inspection conducted by the Korea Petroleum Quality Inspection Station, which is a petroleum product, and pseudo petroleum products manufactured by mixing Meluene and Meluth alcohol. In addition, as a result of the inspection conducted by the Korea Petroleum Quality Inspection Station, the instant melting company’s Meteph and Meluth alcohol was somewhat lower than gasoline. In addition, in light of the above circumstances, it can be seen that the Plaintiff’s engine or parts were not manufactured as internal alcohol materials or are not cryped with low quality.

The fact-finding and decision of the court below to the same purport are just and acceptable, and there is no illegality such as misunderstanding of legal principles as to Article 26 of the former Petroleum Business Act and misunderstanding of facts against the rules of evidence, etc.

5. As to the assertion of violation of the rules of evidence concerning the "purpose for use as fuel"

Examining the evidence admitted by the court below in light of the records, it is highly probable that meltes are used as fuel for gasoline in substitution for gasoline because there is no difference in the characteristics of gasoline in composition ingredients. The Defendants are aware of the circumstances that the Defendants advertised that it is superior to gasoline in relation to the performance of melting, it is unnecessary to change the internal combustion engine of existing automobiles, and it is reduced by 340 won per liter. In light of the above circumstances, melts constitute pseudo petroleum products with low quality than gasoline, and the Defendants are aware that melts, which are pseudo petroleum products with low quality, are not used as fuel for automobiles, and they are produced and sold with the intention of using it as fuel for automobiles with the intention of using it or allowing them to use it as fuel for automobiles.

The fact-finding of the court below to the same purport is just and acceptable, and there is no error of law by misconception of facts in violation of the rules of evidence as alleged in the ground of appeal.

6. As to the assertion of misapprehension of legal principles as to the possibility of tax evasion

Article 2 subparag. 1 of the Traffic Tax Act provides that traffic tax shall be imposed on gasoline and substitute oil similar thereto per liter. Article 3 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 17973 of May 1, 2003; hereinafter the same) provides that "pseudo petroleum products under Article 30 of the Enforcement Decree of the Petroleum Business Act" with respect to "alternative petroleum products similar to gasoline" under Article 2 subparag. 1 of the same Act refers to "pseudo petroleum products under Article 30 of the Enforcement Decree of the Petroleum Business Act". Since pseudo petroleum products under Article 3 of the Enforcement Decree of the Traffic Tax Act are different from the legislative intent of Article 26 of the former Petroleum Business Act with the aim of securing funds necessary for expanding traffic facilities, such as roads and urban railroads, the application of Article 36 of the former Enforcement Decree of the Traffic Tax Act is limited to pseudo petroleum products under Article 30 of the former Enforcement Decree of the Petroleum Business Act. Thus, if pseudo petroleum products can be used as alternative fuel, even if they are actually used as substitute fuel, it can not be added to the relevant gasoline.

The lower court erred in misapprehending the legal doctrine regarding traffic tax objects, but it cannot be deemed that this error affected the judgment, and thus, rejected the allegation in the grounds of appeal on this point. It is so decided as per Disposition by the assent of all participating Justices on the ground that the lower court did not err by misapprehending the legal doctrine on traffic tax, thereby affecting the conclusion of the judgment.

7. As to the assertion against the rules of evidence as to the awareness of criminal intent and illegality

Examining the evidence admitted by the court below in light of the records, the defendants received a reply from the inquiry inquiry about the Ministry of Commerce, Industry and Energy on January 2002 that if the alcohol-based fuel can be used as a fuel for automobiles, Article 26 of the former Petroleum Business Act shall apply to the case of a fuel for automobiles. On June 17, 2002, even if the EM is added at a rate of 40% compared to gasoline from the Ministry of Commerce, Industry and Energy on June 17, 2002, if it can be used as a fuel for automobiles, it can be seen that Article 26 of the former Petroleum Business Act shall apply regardless of the name of additives, etc., so it is difficult to accept the defendants' assertion that there was no awareness of criminal intent or illegality in selling the EM of this case.

The fact-finding of the court below to the same purport is just and acceptable, and there is no error of law by misconception of facts in violation of the rules of evidence as alleged in the ground of appeal.

8. Conclusion

Therefore, all appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Jae-sik (Presiding Justice)