Plaintiff 1 and one other (Law Firm Aion, Attorneys Lee Jon-hun et al., Counsel for the plaintiff-appellant)

Head of Jeonju Customs Office

February 8, 2018

1. Of the instant lawsuits, each “tax amount for additional collection” in [Attachment 1 List 3-3 through 3-6, 4-1, 4-3 through 4-13, 5-3 through 5-9, and 5-13 through 5-17 shall be dismissed for each portion exceeding the amount indicated in the column for the “amount of additional collection” in the annexed Schedule 2 of the Customs Adjustment Disposition.

2. On April 8, 2015, the part of KRW 36,042,90 out of the rectification of customs duties of KRW 146,342,310 listed in Attached Table 1-7, which the Defendant issued against Plaintiff 1, as against Plaintiff 1, is revoked.

3. The remaining claims of the plaintiff 1 and the plaintiff 2 are dismissed, respectively.

4. Of the costs of lawsuit, the portion arising between the plaintiff 1 and the defendant is borne by the plaintiff 1; the remainder is borne by the defendant; and the part arising between the plaintiff 2 and the defendant is borne by the plaintiff 2.

A disposition to correct customs duties as stated in the attached Table 1 that the defendant issued against the plaintiffs shall be revoked.

1. Details of the disposition;

A. The Plaintiff 1 is the trade name of “○○○○○○○○○,” and Plaintiff 2 is the trade name of “△△△△△△,” and is the people engaged in the wholesale, retail, and export-import business of each agricultural product.

B. From March 6, 2014 to September 13, 2015, Plaintiff 1 imported New Ship (hereinafter “New Daily”) from China’sN QIU XINN COD CO (hereinafter “new food”), and QIU CHG CHG FOD CO (hereinafter “original food”; hereinafter “exporter”) as indicated in [Attachment 1-1-7] to 1-7, 3-1 through 5-18, with the importation of New Ship (341 ton of small river and 691 ton) as the total amount of KRW 330 to 610 per ton (hereinafter “the reported price of Plaintiff 1”).

C. Plaintiff 2: (a) was transferred 96 tons from Plaintiff 1 to Plaintiff 1 for import from new food; (b) was imported from May 25, 2014 to June 24, 2014 on a total of four occasions; and (c) was imported from Plaintiff 2 as USD 550 per ton (hereinafter “the reported price of Plaintiff 2”); and (c) was reported as the reported price of Plaintiff 1 and the reported price of Plaintiff 2, hereinafter “the reported price of this case”).

D. As to this, the Defendant requested the Gwangju Customs Office to conduct a customs investigation as to whether the declared price of this case is appropriate, and the head of Gwangju Customs Office denied the declared price of this case on the grounds that the declared price of this case is substantially different from the transaction price of similar goods and the mountainous district qualification investigated by the Korea Agricultural and Fishery Products Food Distribution Corporation, but did not explain the reason that the declared price was not particularly lower, and notified the Plaintiffs of the dutiable value by the method prescribed in Articles 32 and 35 of the Customs Act. The Defendant denied the declared price of this case from March 13, 2015 to January 11, 2016 according to the above notification, and then re-calculated the declared price of this case and notified the Plaintiffs of the dutiable value by the method prescribed in Articles 32 and 35 of the Customs Act (hereinafter “each disposition of this case”).

E. The Plaintiffs were dissatisfied with the request for adjudication as stated in the separate sheet No. 1 in the Tax Tribunal. However, the Tax Tribunal dismissed the Plaintiffs’ respective claims on the disposition as stated in the separate sheet No. 1-1 or No. 2-4 on May 16, 2016. As to the disposition as stated in the separate sheet No. 3-1 or No. 5-18, the decision was made even at the time of the instant lawsuit, even though each request for adjudication was filed 90 days prior to the date of the instant lawsuit.

F. Meanwhile, on February 2, 2018 in the course of the instant lawsuit, the Defendant issued a corrective disposition to reduce the sum of 290,953,370 won for the portion in excess of the amount stated in the column of the customs duty” as stated in the separate sheet No. 1 attached hereto, which is part of the disposition against Plaintiff 1, among each of the instant dispositions, by 3-3 through 3-6, 4-1, 4-3 through 4-13, 5-3 through 5-9, 5-13 through 5-17.

[Ground of recognition] Facts without dispute, Gap's entry in Gap's 7, 9 through 13, 18 through 31 (including branch numbers), the purport of the whole pleadings

2. Whether the part recorded in the attached list 2 among the plaintiff 1's claims in the lawsuit in this case is legitimate

ex officio, as seen earlier, the Defendant issued a correction disposition that reduces the sum of 290,953,370 won in excess of the amount indicated in the column for column for “the amount of additional collection” in attached Table 2 as to the part of the instant disposition on February 2, 2018, as seen earlier, and thus, the Plaintiff 1’s claim on the reduced portion has no interest in the lawsuit as a lawsuit seeking revocation of the non-existent disposition, and thus, is unlawful.

3. Whether the disposition imposing customs duties is legitimate, except for the above paragraph (2) among the dispositions of this case

A. Summary of the plaintiffs' assertion

1) At the time of each import declaration, the Plaintiffs reported the price actually paid to exporters at the time of each import declaration. The Plaintiffs’ living lectures that the price was lower than that of the Maddong acid was lower than that of the Maddong acid, part of which was not the Madsan, and the price was lower upon entering into a blanket contract (a single dry field contract) with exporters on November 2013 and November 2014. Although the Defendant sufficiently explained this to the Defendant, it was unlawful to deny the Plaintiffs’ reported price on the grounds that there was a difference between the reported price of similar goods at the time of each import declaration.

2) Even if the reported price of this case does not fall under the actual transaction price, similar goods, which the Defendant used as the basis of calculating the dutiable value, are different from the goods of this case, the place of production, variety, transaction terms, etc., and thus, the instant disposition was deemed as similar goods, and thus, the instant disposition was unlawful.

(b) Related statutes;

Attached Form 3 shall be as listed in attached Table 3.

C. Determination

1) Whether the setting aside of reported prices of the instant case is lawful

According to Article 30 of the Customs Act, the customs value of imported goods shall, in principle, be the transaction price adjusted by adding the amount determined by the Customs Act to the price actually paid or to be paid by a buyer for the goods sold for export to Korea (paragraph (1)); however, in cases prescribed by Presidential Decree where a person liable for duty payment files a dutiable value declaration based on a transaction price pursuant to paragraph (1) and where it is difficult to recognize such dutiable value as a dutiable value because the relevant dutiable value is substantially different from the transaction price of the goods of the same kind and quality or similar goods, etc., the person liable for duty payment may request the person liable for duty payment to submit materials proving that the reported price is the same as the fact (paragraph (4)), and where the person liable for duty payment fails to submit materials requested by the person liable for duty payment or it is difficult to recognize a dutiable value only by the submitted materials,

In addition, Article 24(1)1 of the former Enforcement Decree of the Customs Act (amended by Presidential Decree No. 26957, Feb. 5, 2016; hereinafter the same) provides for “where the head of a customs office is able to request the submission of data, where the reported price of a taxpayer is significantly different from the price of the goods of the same kind and quality or similar goods” under Article 3(2) of the former Enforcement Decree of the Customs Act provides for “where the reported price is the goods whose international market price is not published such as crude oil, minerals, grain, etc. and the mountainous district of the imported goods investigated by the Commissioner of the Korea Customs Service or by a person designated by the Commissioner of the Korea Customs Service, where the reported price is substantially different from the investigated price,” and Article 24(3) of the Enforcement Decree of the Customs Act provides for “where it is difficult to recognize the declared price as the dutiable value, where there is a reasonable ground to suspect the accuracy or truth of the declared price, such as where the person liable for duty payment cannot verify the factual relations with other materials submitted.”

Meanwhile, as long as Article 30(1) of the Customs Act provides for the price actually paid or payable as the dutiable value in principle, it is necessary to strictly interpret the requirements as much as possible to determine the dutiable value by the method as stipulated in Articles 31 through 35 of the Customs Act. In light of the fact that Article 24(1)2 through 4 of the former Enforcement Decree of the Customs Act provides for the cases where a taxpayer may deny the dutiable value, and that the specific description of the characteristics of the goods and the type of transaction is limited in detail, the term “price of similar goods” under Article 24(1)1 of the former Enforcement Decree of the Customs Act refers to not only the price acknowledged by the tax authority through the investigation of customs offense cases concerning similar goods or the ex post facto examination of the amount of customs duties, but also the price accepted by the tax authority as the price of similar goods (see, e.g., Supreme Court Decision 2005Du17188, Dec. 27, 2007).

In full view of the following circumstances as to the instant case, the instant declaration price is difficult to be recognized as a dutiable value because the instant declaration price falls under the case where there is a substantial difference from the transaction price of similar goods and there is a reasonable reason to suspect the accuracy or truth of the reported price, and thus, the Defendant’s assertion that the instant declaration price was unlawful for denying the instant declaration price is without merit.

A) The case holding that, among the reported prices of this case, the price of raw materials is 12-38% of the mountain district price investigated by the Korea Agriculture and Fisheries Corporation, and the adjusted price of the reported price of this case (CIF conversion price) is merely 24-5% of the weighted average price and 27-78% of the lowest price of similar goods at each time of importation, and the reported price of this case is significantly different from the market price of similar goods at each time of importation (the plaintiffs cannot use the production year as the criteria for distinguishing similar goods, and thus, the case of the Korea Agriculture and Forestry Corporation that imported the 2012 mountain river shall be considered as similar goods. However, in the case of the NIG, although the production year of China can be stored from the soil to the maximum of two years, there may be a drop in number from the soil, and the production year of this case (the production year of similar goods) affects the production year of similar goods, the return price of this case shall not be considered as the price of similar goods in the free trade zone for 2013 years.

B) Some of the goods of this case imported by the Plaintiffs appears to have no big difference in the face value of the gyeast and the gyeast. The Korea Customs Service did not distinguish the gyeast and the gyeast and required to report it to the gyeast, and the similar goods recognized by the Defendant are likely to include the gyeast and the gyeast. Thus, the gyeast may be considered as similar goods of the gyeast.

C) The Plaintiffs asserts that it was imported of the Madsan River compared to the Madsan River. The Plaintiffs asserted that the Madsan River was imported of the Madsan River. The Madsan River was 55 to 63% low compared to the Madsan River. However, in the case of the Madsan River, the number of such rivers is less than that of the Mad delivery and less than that of the Madsan River. However, according to the results of the analysis of the Central Customs Analysis Agency, the number of such rivers imported by the Plaintiffs seems to be similar to that of the Madsan River imported by other importers. (2) In view of the fact that the volume of the plaintiffs imported is much more than the quantity of the Madsan River (787 tons), ③ that the number of the Madsan River (787 tons) imported by the Madsan River and the content of the receipts imported by the Plaintiffs is less than that of the Madsan plant exporters, and that the Plaintiffs were not admitted to the Mansan Forest.

(State4) Results of the analysis of the Central Customs Analysis Agency

A table-type imported companies in the main text shall have an originating water portion (%) subdivision (%) ○○○○○○○○○○○○○○○ Nam-nam 93.30.81 Myung-dong 93.40.89 Soga-dong 91.40 0.96 So-dong 91.10.94

D) The plaintiffs alleged that they were able to import mouth more at low level upon entering into a comprehensive export contract with exporters in November 2013 and November 2014. However, even if the comprehensive export contract was entered into, it is common if the transaction price is determined according to the market price as at the time of the specific transaction. ② The plaintiffs were 50 US dollars per ton, 360 US$350 per ton, 360 or 50 US dollars per ton of 2014, and 10 US dollars 510 or 505 US dollars per ton of 2013. According to the above comprehensive export contract, the plaintiffs alleged that the comprehensive import declaration price per ton of 3 US dollars was no more than 10 U.S. dollars per ton of 2013.

2) Whether the determination of dutiable value of the instant case is lawful

Article 30(5) of the Customs Act provides that if it is difficult to recognize a dutiable value, the dutiable value shall not be determined by the method provided for in Articles 31 through 35 of the Customs Act. Article 31(1) of the Customs Act provides that the dutiable value of the goods shall be determined based on the transaction price of the goods of the same kind and quality as the fact that the dutiable value is recognized. Article 32(1) of the Customs Act provides that “If the dutiable value cannot be determined by the method provided for in Articles 30 and 31 of the Customs Act, the goods shall be produced in the country which intends to determine their dutiable value and shall be imported in the Republic of Korea from the date of shipment or for which there is no change in market conditions or commercial practices that affect the dutiable value of the goods, and Article 31(1) of the former Enforcement Decree provides that “The dutiable value of the goods shall be determined by the same method as the dutiable value of the goods concerned before and after their shipment and shall be determined by the same method as the market price of the goods.”

As seen earlier, insofar as it is legitimate that the dutiable value of the instant goods is not recognized as the dutiable value, the dutiable value of the instant goods ought to be determined by the method prescribed in Articles 31 through 35 of the Customs Act pursuant to Article 30(5) of the Customs Act. However, since the instant goods are agricultural products, there are considerable differences in the characteristics of the instant goods depending on mountain areas, yellow dust, harvest time, storage conditions, and circumstances at the time of production, etc., and there are no data that can confirm all the characteristics that form the basis for the identity of the instant goods. Thus, the dutiable value shall not be determined by the method prescribed in Article 31 of the Customs Act. The dutiable value shall not be determined based on the transaction price of similar goods pursuant to Article 32 of the Customs Act. If there is no transaction price of similar goods, the dutiable value shall be determined based on the domestic sale price pursuant to Article 33 of the Customs Act, and if there is no domestic sale price, it shall be determined by applying Article 35 of the Customs Act.

According to the above evidence, the defendant's import declaration (import declaration No. 1 omitted; hereinafter "1-7 import declaration") listed in the annexed Table 1-7 No. 1-7 (hereinafter "the import declaration No. 1-7 import declaration"), except for the import declaration with respect to five tons in small river, shall be determined based on the river basin for small river and the river basin for small river basin for the production of the goods of this case, on the basis of the heavy river basin for the production of the goods of this case, and on the basis of the comparative river, the fact that the lowest price among the similar goods prices of this case deemed to be the period of 30 days before and after the date of entry into each of the goods of this case, is determined as the dutiable value for the remaining import declaration stated in the annexed Table No. 1 list, except for the part concerning five tons in small river among the import declaration No. 1-7 import declaration) is legitimate.

According to Article 35(2) of the Customs Act, the Defendant determined the dutiable value per ton based on the Chinese mountainous district price for five tons among the declarations of importation. However, according to the evidence submitted by the Defendant, it is only acknowledged that there is no similar goods imported between 30 days before and after the date of entry into the import declaration of 1-7 with respect to small river, and there is no evidence to acknowledge that the dutiable value cannot be determined based on the domestic sale price under Article 3 of the Customs Act or the calculated price under Article 34 of the Customs Act, and even if the dutiable value cannot be determined based on the domestic sale price or calculated price, according to Article 12 of the Enforcement Decree of the Customs Act, the portion of the Plaintiff’s dutiable value can be determined based on Article 35(2)4 of the Customs Act, which is within 90 days after the date of entry into the import declaration of 1-7, 2014 and Article 35(2)5 of the Enforcement Decree of the Customs Act of the former Customs Act.

4. Conclusion

Therefore, among the instant lawsuits, "amount of tax additionally collected" in 3-3 through 3-6, 4-1, 4-3 through 4-13, 5-3 through 5-9, and 5-13 through 5-17 of the attached Table 1 list among the instant lawsuits is unlawful, and thus, the part in excess of the amount indicated in the “amount indicated in the column for the amount of additional collection” as stated in the attached Table 2 among the correction of customs duties is dismissed. The Defendant cited the part in 36,042,310 of the imposition of customs duties of KRW 146,342, and 90 of the attached Table 1-7 as stated in the attached Table 1 list against Plaintiff 1 as of April 8, 2015, which was 36,042, and90 of the imposition of customs duties of KRW 146,310 as stated in the attached Table 1

[Attachment]

Judge Lee Jae-woo (Presiding Judge)

Note 1) Cost, Inc. and rights of interest. Price, including freight and insurance, of the goods.

2) (net weight by Report 】 The average price calculated by dividing the total sum of net weight by Report x unit price by Report x the total sum of net weight by Report :

3) According to the statement in Gap's No. 47 (including each number), the life class reported by the administrator of the dispute resolution committee to bring in shall be the middle class of 2012.

Note 4)

5) The Plaintiff asserts that the www.jiang7.com site sold the Manamsan Myeong, and thus, it does not mean that the Donsan Donsan Donsan Donsan Donsan Donsan Donsan Donsan Donsan Donsan Donsan Donsan Donsan Donsan Donsan. According to the evidence No. 40-5, the Plaintiff appears to have sold the Donsan Donsan Donsan Donsan and most of the Donsan Don

Note 6) The Plaintiff interviewed not only the original food but also the LOUPING JHEG TRAD COTD. on the following grounds: (a) the interview content of the original food, “Issan is not believed in light of the evidence No. 44-2 and No. 3 (Confirmation that the original food is not finitely finite, as seen above)” in the evidence No. 3, but also the original food, which is similar to the original food No. 3, the Plaintiff interviewed not only to the original food but also to the same effect as the Mansung LTD.

Note 7) The dutiable value for the import declaration stated in the Schedule 1 reflected in each reduction decision listed in the Schedule 2 List