2014du12413 The revocation of the revocation of the receipt of a refund for petroleum import charges

Zskex Inc.

The Korea National Oil Corporation

Seoul High Court Decision 2013Nu28567 Decided August 19, 2014

October 27, 2016

The judgment below is reversed, and the case is remanded to Seoul High Court.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the grounds of appeal Nos. 3, 4, and 5

A. (1) The so-called administrative rules, which are issued by a superior administrative agency to a subordinate administrative agency on the business process guidelines or the criteria for the interpretation and application of statutes, generally have effect only within the administrative organization and do not have external binding force. However, if the provisions of statutes are not specified in the procedure or method for the exercise of authority to a specific administrative agency while granting the authority to determine the specific matters of the statutes, and the delegated administrative agency specifically provides for the matters that can be the contents of the statutes in the form of administrative rules, such administrative rules are not a general effect of the above administrative rules, but are not a general effect of the administrative rules, and have the function to supplement the contents of the statutes in accordance with the legal regulations that granted the authority to supplement the specific matters of the statutes to the administrative agency. Accordingly, such administrative rules have the effect of external binding order in combination with those of those regulations unless they go beyond the delegated scope of the pertinent

Court Decision 2006Du3742 decided Mar. 27, 2008 (see, e.g., Supreme Court Decision 2006Du3742).

Furthermore, with respect to the interpretation of the law on taxes and charges, it shall be interpreted as the legal text, unless there are special circumstances, regardless of the requirements for imposition or exemption, and it shall not be permitted to expand or analogically interpret without reasonable grounds (see Supreme Court Decision 2007Du9884, Oct. 26, 2007).

(2) (A) Article 18(1)1 of the former Petroleum and Petroleum Substitute Fuel Business Act (amended by Act No. 8768 of Dec. 21, 2007, which was in force on June 22, 2008; hereinafter “former Petroleum Business Act”) provides that a charge may be collected from petroleum refining business operators, petroleum exporters or importers, or petroleum retailers (hereinafter “petroleum refining business operators, etc.”) who import petroleum or sell petroleum products for the stabilization of supply and demand of petroleum, and Article 19 of the same Act provides that a charge collected may be refunded in cases where the above person subject to surcharges uses or supplies petroleum for the purpose prescribed by the Presidential Decree (Article 18(1)), and the standards and procedures for refund and refund of refund money, and other necessary matters concerning refund shall be prescribed by the Presidential Decree (Article 3).

Article 27(1) of the former Enforcement Decree of the Petroleum and Petroleum Substitute Fuel Business Act (amended by Presidential Decree No. 20840, Jun. 20, 2008; hereinafter “former Enforcement Decree of the Petroleum Business Act”) provides that if a person who has paid dues falls under any of the following subparagraphs, all or part of the dues paid shall be refunded, and subparagraph 1 of the former Enforcement Decree provides that if a petroleum refiner or petroleum exporter exports products prescribed by the Ordinance of the Ministry of Commerce, Industry and Energy from the process of refining petroleum products or petroleum (hereinafter “reasons 1”) and a product prescribed by the Ordinance of the Ministry of Commerce, Industry and Energy, which is produced in the process of refining petroleum products or petroleum, is supplied as raw materials for the industry prescribed by the Ordinance of the Ministry of Commerce, Industry and Energy (including the case of supplying petroleum products as raw materials for industry use among by-products), Article 27(1) of the former Enforcement Decree of the Petroleum Business Act provides that 0.1 of the former Enforcement Decree of the Petroleum Business Act provides for the method of refunding and notifying 20.

Article 23 (1) (main sentence) The amount of charges shall be calculated by multiplying the quantity of petroleum used for the production of petroleum by the Commissioner of the Korea Customs Service for the purpose of subparagraph 1, x (unit price for the preceding month) the amount of charges calculated by subtracting the quantity of petroleum used for the production of petroleum products from the total quantity of petroleum used for the production of the raw materials for the preceding month (hereinafter referred to as "the unit price for the production of petroleum used for the preceding month") x the amount calculated by applying the formula of 10 and 24 (1) 1 and 24 (2) the quantity of petroleum used for the production of petroleum by the method of calculating the total quantity of petroleum used for the manufacture of the raw materials for the preceding month) and the quantity of petroleum used for the manufacture of the petroleum by the method of calculating the quantity of petroleum by the second and the method of calculating the quantity of petroleum used for the manufacture of the raw materials for the preceding year shall be calculated by applying the formula of Article 26 (2) 1 and 2) the quantity of petroleum to be refunded.

Accordingly, Article 1-2 of the former Act (amended by Presidential Decree No. 2008 - No. 36 of Nov. 3, 2008 and enforced on Nov. 10, 2008; hereinafter referred to as the "former Customs Service Notice") provides for the total quantity of raw materials generated in the normal process of producing export goods (excluding the quantity of raw materials used in the normal process of producing export goods) and "by-products" means goods with economic value generated in addition to export goods during the production process and are sold or used for himself/herself; "the autonomous required quantity" means the total quantity of raw materials generated in the production process of goods calculated by dividing the total quantity of goods by one product for a specific period of time by Article 10 (1) of the Act and Article 11 of the Decree; "the total quantity of raw materials generated in the production process of goods" by two different types; "the total quantity of goods used in the production process of goods for a specific period of time" by two different types; "the total quantity of raw materials required in the production process of goods" by two different types.

In addition, Article 2-14 of the former Customs Service Notice 2-14 provides that where it is difficult to distinguish the raw materials that have caused by-products from the whole raw materials required in the manufacturing process of the product, the deduction rate for by-products shall be deemed to have occurred by-products. Article 2(2) provides that "the deduction rate for by-products" shall be "the deduction rate for by-products: (a) the price of the product produced in the relevant process that produces by-products; (b) the price of the total raw materials required in the process that generates by-products; (c) the price of the relevant raw materials that cause by-products; and (d) the price of the relevant raw materials that cause by-products: Provided, That where it is difficult to calculate the price A; (b) the price of the raw materials that have occurred by-products under paragraph (4) shall be determined by-products at the deduction rate for by-products under paragraph (2) x (1) - the deduction rate for by-products."

B. (1) According to the reasoning of the lower judgment, the Plaintiff paid charges to the Defendant at the time of importing petroleum pursuant to relevant Acts and subordinate statutes, such as the Petroleum Business Act. (1) In the event that petroleum products, etc. obtained by refining petroleum are exported or used for a certain purpose, such as supplying them for industrial raw materials, the Plaintiff has already been refunded charges within the scope equivalent to the amount of petroleum used as raw materials in the production of "petroleum products" or "products for industrial raw materials"; (2) in the process of supplying petroleum by refining crude oil, which produces petroleum products such as ELP, naphtha, gasoline, etc. (hereinafter referred to as "raw oil refining process"), the Plaintiff applied for a refund of surcharges from 0% of the total amount of petroleum generated at the first stage to 1.5% of the total amount of waste gas generated at the 20% of the total amount of petroleum by 20% of the total amount of petroleum generated as raw materials or by 20% of the total amount of petroleum generated as raw materials or by 20% of the total amount of petroleum generated as other petroleum products.

25. Until every month, the amount of refund money has been paid by the Board of Audit and Inspection that it was inappropriate to calculate the above fuel gas and hydrogen with hand, and the defendant regard the fuel gas generated from the above fuel refining process as by-products and calculates the amount required for refund again by including it in the quantity of petroleum products. On the premise that using hydrogen generated from the petroleum chemical process, which is not the petroleum chemical process, as by-products, is sold for fuel or for other purposes, and it is not the subject of refund, the court below determined that the plaintiff's disposal of the above by-products of this case constitutes the amount of refund money by-products of this case (22,705,79,280 won) on the ground that it is difficult to calculate the amount of refund money by-products of this case (2) on the ground that it is excessive to reimburse the amount of refund money by-products of this case from February 2, 2003 to December 2, 207.

C. However, in light of the legal principles as seen earlier, it is difficult to accept the judgment of the court below in the following respect.

(1) In full view of the contents, form, purport, etc. of the pertinent laws and regulations as seen earlier, each of the provisions of the former Public Notice and the former Public Notice of the Korea Customs Service shall be based on delegation of the former Public Notice of the Petroleum Business Act, which provides that “B shall determine and publicly notify the refund standards or the subject, size, method, etc. of refund, etc.” to the Minister, and shall be deemed to have the effect as an external binding legal order when supplementing the content of the relevant laws and regulations.

Furthermore, when collecting charges from a petroleum refiner, etc., but refunding part of charges under the former Petroleum Business Act, thereby setting the amount of charges to be finally borne by a petroleum refiner, etc.. In light of the substance of imposing and refunding oil refunds, the legal doctrine on the interpretation of the Act on the Interpretation of the Taxes and Charges shall be applied in interpreting the provisions on the basis of calculating refunds, such as the subject, size, and method of refund. Therefore, the provisions on the former Public Notice of the Child Register and the former Public Notice of the Customs Service, which set the basis for calculating refund, shall be interpreted and applied as a matter of principle, and shall not be extensively interpreted or analogically interpreted without reasonable grounds.

(A) As to the method of treating fuel gases, fuel gases were previously produced in the process of crude oil refining to the minimum extent possible for the Plaintiff to burn out the waste gas generated in the atmosphere through separate processing. As such, it is reasonable to view the waste gas as by-products, “by-products,” which have economic value incidental to the export goods, other than the export goods, and are sold or used by himself/herself, since it was manufactured for the purpose of sale or it is not possible to sell it to third parties by means of its actual commercialization.

2) However, in addition to the language, history, purport, etc. of the relevant regulations and notifications, 1 December 29, 2008

The notice of the Ministry of Health and Welfare provides that fuel gas is included in by-products, but the former notice of the Ministry of Health and Welfare and the former notice of the Korea Customs Service, which had been applied to the period subject to the disposition of this case, did not clearly stipulate the method of treating "fuel gas" in calculating the refund amount; ② The former notice of the Minister of Health and Welfare, with regard to the refund of surcharges, Article 21, and Article 23, clearly define the method of calculating the refund amount; and Article 26, Paragraph 1, provides that "the amount of petroleum used as a raw material to manufacture petroleum products subject to the refund" shall be calculated by applying "the autonomous required amount by the notice of the Korea Customs Service; ③ However, Article 2-14 (Management by-products) of the former notice of the Korea Customs Service calculates "the refund amount for raw material from which by-products were generated" [Article 2-14 (Management by-products) of the former notice of the Korea Customs Service].

The method of calculating "by-products" (paragraph 2) and "by-products" (paragraph 3), and the method of determining "the price of by-products necessary for calculating the percentage of by-products" (paragraph 1), and "the price of by-products necessary for calculating the percentage of by-products (paragraph 3), etc. The provisions of Article 2-14 are difficult to be deemed to determine "the autonomous required amount by the public notice of the Korea Customs Service, which is used in the public notice of the former Industrial Community Service," and (4) even if it is necessary to apply by-products of Article 2-14 of the former Public notice of the Korea Customs Service as alleged by the defendant, applying "the by-products generation ratio (the standard of value)" to "the by-products generation ratio (the standard of quantity)" is the same as the "products" itself, and thus, it is not reasonable to apply the provision of Article 2-1 of the former Public Notice of the Korea Customs Service to "the prices of by-products with economic value generated in the process of manufacturing by-products" and thus, it does not conform to the concept of by-1.

(B) In light of the following circumstances: (i) hydrogen generated from the petroleum chemical process that produces a variety of chemical products using naphthas, i.e., various circumstances; (ii) the Plaintiff gains substantial economic benefits by using the above hydrogen for desulfuring purposes in the crude oil refining process; (ii) hydrogen is the product sold in the market; and (iii) hydrogen is incidental to the Nap decomposition process, it is reasonable to grasp it as by-products, not by hand, rather than by hand.

2) However, in light of the fact that the Plaintiff’s 'in-house disposal of raw milk' that is one of the elements of the No. 2 formula for calculating the amount of refund on the ground of subparagraph 2 and the fact that the Plaintiff’s 'in-house disposal of oil by-products' is difficult to apply the refund rate of charges under Article 25(1) of the former Public Notice and Attached Form 4, i.e., that it is difficult to view that the Plaintiff's 'in-house disposal of petroleum by-products' was for the purpose of calculating the amount of refund, and that it is difficult to regard that the Plaintiff's 'in-house disposal of petroleum by-products' was for the purpose of calculating the amount of refund, and that it is difficult to apply the above 'in-house disposal of petroleum by-products' as well as the 'in-house disposal of petroleum by-products' for the purpose of calculating the rate of refund by-products of petroleum by-products, and that it is difficult to regard the above 'in-house sale of petroleum by-products' separately for the purpose of sale.

2. Conclusion

The judgment of the court below is reversed without further proceeding to decide on the remaining grounds of appeal, and the case is remanded to the court below for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Yong-deok

Justices Kim Jae-han

Justices Kim So-young

Justices Lee Dong-won