Plaintiff (Attorney Na-jin et al., Counsel for the plaintiff-appellant)

Republic of Korea (Law Firm Han-soo, Attorneys Gyeong-young, Counsel for defendant-appellant)

January 8, 2008

Seoul Central District Court Decision 2006Gahap79044 Decided April 10, 2007

1. The judgment of the first instance is revoked, and the plaintiff's claim is dismissed.

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

1. Purport of claim

The defendant shall pay to the plaintiff 214,578,130 won with 20% interest per annum from the day after the delivery of the complaint to the day of complete payment.

2. Purport of appeal

The same shall apply to the order.

1. Facts of recognition;

A. The Dongjin Trade Co., Ltd. (hereinafter referred to as the “Dongjin Trade”) imported from the Chinese exporter from March 199 to July 199, and paid customs duties on November 3 and 4, 199 to the head of Incheon Customs Office under the Defendant’s control.

Afterwards, on October 3, 200, Dongjin-in filed a claim for correction of the amount of customs duties on the grounds that the tariffs of KRW 32,491,257 were unfairly included in the customs value declared by the head of the Incheon Customs office, and the tariffs of KRW 169,09,00 were overpaid, but the head of the Incheon Customs office rejected the above claim on October 11, 200.

Therefore, Dongjin Trade filed a lawsuit seeking revocation of the above rejection disposition against the Incheon District Court Decision 2001Gu3535, and won the judgment on April 9, 2002. The head of Incheon Customs Office appealed against the above judgment (Seoul High Court 2002Nu6516) and filed an appeal (Supreme Court 2003Du55566). However, the above judgment was all dismissed, and the above judgment became final and conclusive on September 29, 2003.

B. Around December 11, 2002, the head of the Incheon Customs Office issued a disposition of correcting the amount of customs duties on the 56 imported items from November 26, 2001 to May 9, 2002 as of May 26, 2002, and notified the correction of the amount of customs duties. The final amount of customs duties determined at the time was KRW 1,043,066,440 (the same amount of customs duties was KRW 1,04,000, Incheon District Court 2004Guhap1753 for the above disposition, and the above action was withdrawn on January 24, 2005).

C. On the other hand, on January 17, 2003, Dongjin Trade prepared to the Plaintiff a certificate of promissory notes with a face value of KRW 250 million at KRW 56,000,000 (the Plaintiff is the representative director of Dongjin Trade and the relative relationship, and the Plaintiff was given the above certificate in order to receive the money borrowed from Dongjin Trade with business funds) with a notary public’s certificate of Jungjin General Law Firm No. 2003, May 10, 2003. Accordingly, on May 10, 2003, the Plaintiff received the attachment and assignment order of claims until it reaches the amount of KRW 250,000,000 from the Incheon District Court’s 2003TT No. 1702 (the refund bond of this case) and the above order became final and conclusive on May 16, 2003 (the above order became final and conclusive to the Defendant on June 16, 2003.

D. After the judgment of the above Supreme Court became final and conclusive, on October 13, 2003, the head of Incheon Customs Office calculated the amount of refund tax for the Eastjin Trade as KRW 214,578,130 (hereinafter the refund in this case) by adding the additional dues up to the date of approval for the amount of refund tax for the Eastjin Trade to the amount of refund tax for the Eastjin Trade, and notified that the amount of refund in this case was in arrears until the entire amount of the refund in this case was in arrears at the time, and notified that the amount of refund in this case should be appropriated for the total amount of the amount of refund in this case (the amount of additional dues up to that time became KRW 1,239,487,40). On October 28, 2003, the total amount of refund in this case appropriated for part of the above amount of refund in arrears, and notified the fact of appropriation

[Ground of Recognition] Facts without dispute, Gap evidence 1 through 6, Eul evidence 1 through 3, Eul evidence 10-1 through 3, Eul evidence 12-1 through 3, Eul evidence 13-1 through 3, Eul evidence 14-1 through 3, Eul evidence 14-3, the purport of the whole pleadings

2. The assertion and judgment

A. Both claims

(1) On or before May 16, 2003, the Plaintiff asserted that, inasmuch as the Defendant did not seize the instant refund claim based on the disposition on default, etc. on or before the issuance of the instant attachment and assignment order to the Defendant, the instant refund claim was already finally and conclusively transferred to the Plaintiff on May 16, 2003, and the Defendant’s above appropriation made thereafter became effective only in the future, and thus, the Defendant should pay to the Plaintiff the entire refund amount KRW 214,578,130, and delay damages therefrom.

D. On the ground that the Defendant: (a) the Framework Act on National Taxes provides that national taxes, surcharges, or expenses for disposition on default shall be collected in preference to other public imposts and other claims; and (b) the Customs Act provides that when the refundee pays customs duties or erroneous payments to the customs office under Article 46(2) of the Customs Act, the amount to be refunded may be appropriated for the refund amount; (c) the Defendant may preferentially collect the refund amount of this case prior to the Plaintiff, who is the creditor of the same trade, from the refund amount of this case; and (d) the head of Incheon Customs Office legitimately appropriated the refund amount of this case to the Plaintiff for the total amount of other customs duties in arrears, so that the refund amount to the Plaintiff

B. Relevant statutes

(i) Customs Act and Enforcement Decree;

Article 26 (Collection of Customs Duties in Case of Absence of Security, etc.)

(1) Except as otherwise provided for in this Act, the collection of customs duties which do not provide security or collect and which fall short of the amount collected shall be governed by the Framework Act on National Taxes

Article 46 (Refund of Customs Duties Overpaid by Mistake)

(1) The head of a customs office shall, when a person liable to pay customs duties, surcharges, additional duties or expenses for disposition on default requests the refund of overpaid or erroneously paid customs duties, surcharges, additional duties or expenses for disposition on default, refund the overpaid or erroneously paid customs duties,

(2) Where the head of a customs office refunds any amount overpaid or erroneously paid under paragraph (1), if there are customs duties, taxes, surcharges, additional duties or disposition fees for arrears payable to the customs office, he/she may appropriate the refund amount therefor.

(3) Any person liable for duty payment may transfer his right to an erroneous payment to a third person under the conditions as prescribed by the Presidential Decree.

Article 52 (Notification on Appropriation of Customs Duties Overpaid by Mistake)

The head of the customhouse shall, when he appropriates any erroneous payment under Article 46 (2) of the Act, notify the right holder of such fact.

Article 53 (Transfer of Erroneous Payments)

A person who intends to transfer his right to the amount overpaid or erroneously paid under the provisions of Article 46 (3) of the Act to a third party shall submit to the customs collector a document stating the following matters along with a certificate of seal imprint attached:

【Basic Act on National Taxes and Enforcement Decree

Article 53 (Transfer of Rights to National Tax Refund)

A taxpayer may transfer to another person the rights to the national tax refund under the conditions as prescribed by the Presidential Decree.

Article 42 (Transfer of National Tax Refund)

(1) A taxpayer who intends to transfer the right to the refund of national tax to another person under Article 53 of the Act shall request the head of the competent district tax office in writing stating the following matters before issuing the notice of refund of national tax:

1. The name and address of the transferor, 2. The name and address of the transferee, and the contents of the rights to be transferred;

(2) In case where the transferor makes a request under paragraph (1), if there are other national taxes, additional dues or disposition fees for arrears to be paid, the head of a tax office shall appropriate the balance for the national taxes, additional dues or disposition fees for arrears, and promptly comply

C. Determination

(1) In light of the above provisions of the Act and subordinate statutes, if a taxpayer requests a transfer of national taxes in arrears by notifying the head of a tax office in writing stating the address and name of the transferor and transferee after transferring his/her claim for refund of national taxes to another person, and the head of a tax office requests a transfer of the tax office, he/she shall immediately appropriate the claim for the payment of national taxes in arrears (in cases of a customs refund, the payment of national taxes shall be first appropriated for other national taxes, additional dues, or disposition fee for arrears to be paid by the transferor as provided in Article 42(2) of the Enforcement Decree of the Framework Act on National Taxes. However, in light of the fact that there is no special circumstance that a taxpayer does not grant the above priority appropriation right unlike other national taxes, the payment of national taxes shall be deemed to have been made in excess of the above provisions of the preferential appropriation right as mentioned above, and the head of a tax office shall pay the balance to the transferee of the national taxes in excess of the requirement that the transfer agent should be appropriated without delay if it becomes effective after the transfer of the taxes in arrears.

D. According to the reasoning of the judgment below, the court below erred by misapprehending the legal principles as to the assignment order of this case, and by misapprehending the legal principles as to the assignment order of this case, the assignment order of this case is identical to the assignment of claims, and since the assignment order of this case is identical to the assignment of claims, the above provisions of the above Acts and subordinate statutes shall apply even if the plaintiff received the assignment of claims for the refund of this case, not to the transfer of claims for the refund of this case. The claim for refund of this case was finalized on October 13, 2003 after the decision of correction of the amount of national tax imposed on the winter Trade by the head of Incheon customs office. The claim for refund of this case was finalized upon the expiration of all or part of the national tax obligation due to the cancellation or correction of the report or disposition of imposition (see Supreme Court Decision 97Da26432, Oct. 10, 1997; Supreme Court Decision 200Da832, Oct. 13, 2008).

Secondly, the defendant's argument on this part is legitimate, and thus the plaintiff's claim cannot be accepted.

3. Conclusion

If so, the plaintiff's claim of this case is dismissed, and the judgment of the court of first instance is unfair, so the judgment of the court of first instance is revoked and the plaintiff's claim is dismissed.

Judges Lee In-bok (Presiding Judge)