2015du39453, revocation, etc. of revocation of the refund of petroleum import charges

KS Energy Co., Ltd.

The Korea National Oil Corporation

Seoul High Court Decision 2014Du42003 Decided January 22, 2015

October 27, 2016

The appeal is dismissed.

The costs of appeal are assessed against the Defendant.

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

1. As to the third ground for appeal

A. The so-called administrative rules, which are issued by a superior administrative agency to a subordinate administrative agency, are generally effective only within the administrative organization, and do not have external binding force. However, if the provisions of statutes are not specified in the form of administrative rules in which the delegated administrative agency grants the authority to determine the specific matters of the statutes and does not specify the procedure or method of exercising the authority to determine the specific matters of the statutes, such administrative rules are not the general effect of the administrative rules as seen above, but have the function to supplement the contents of the statutes in accordance with the validity of the provisions of the statutes that grant the authority to supplement the specific matters of the statutes to the administrative agency. Accordingly, such administrative rules have the effect of an external binding law order in combination with those of the administrative rules so far as they do not go beyond the bounds delegated by the statutes in question (see Supreme Court Decision 2006Du3742, 3759, Mar. 27, 2008).

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).

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

Accordingly, 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 where a person who has paid a charge falls under any of the following subparagraphs, the person who has paid the charge shall refund all or part of the charge paid. subparagraph 1 provides that “Where a petroleum refiner or petroleum exporter exports 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 (hereinafter “reasons”) 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 industry as prescribed by the Ordinance of the Ministry of Commerce, Industry and Energy (including where the product is supplied as fuel to manufacture industrial raw materials among by-products), and Article 27(4) and (4) of the same Act provides for the amount of the charge to be refunded and publicly notified by the Minister of Knowledge Economy.

Article 21 (1) 1 of the former Public Notice on the Collection, Deferment of Collection, and Refund of Petroleum and Petroleum Substitute Fuel (amended by the Ministry of Commerce, Industry and Energy No. 2007-154 of Dec. 28, 2007 and enforced January 1, 2008; hereinafter referred to as the "former Public Notice on the Forest Labour") which was prepared by delegation of the former Petroleum Business Decree, one of the "reasons under the Foreign Trade Act" (Article 21 (1) 1 of the former Public Notice on the Import and Petroleum Substitute Fuel. Paragraph (2) 1 of the former Public Notice on the Import and Petroleum Business Act refers to "in the case of exporting under the Foreign Trade Act", and Paragraph (2) 2 of the same Article refers to "in the case of supplying Nata (including alternative petroleum products) as a raw material for petroleum chemical or fertilizer manufacturing."

In addition, the main sentence of Article 23 (1) of the former Public Notice shall be calculated by applying the formula of "(the amount of petroleum used as a raw material for the production of petroleum products subject to refund" x (the unit price of surcharges for the preceding month) X (the unit price of surcharges for the preceding month) x (the unit price of surcharges for the preceding month) the formula (hereinafter referred to as "in sequence 10 and 20)," and Article 24 (1) 1 and 1 of the Enforcement Decree of the Act on Special Cases concerning the Refund of Customs Duties shall be calculated by applying the formula of Article 26 to "the amount of petroleum used as a raw material for the production of petroleum products subject to refund" (Article 24 (2) 1 and 2 of the Enforcement Decree of the Act on Special Cases concerning the Refund of Customs Duties) and the quantity of petroleum used as a raw material for the production of petroleum products subject to refund shall be calculated by applying the formula of Article 26 of the Enforcement Decree of the Korea Customs Service, and the quantity of petroleum used as a raw material for the purpose of refund shall be calculated by applying the formula 2.

Meanwhile, Article 2 subparagraph 4 of the Act on the Special Cases concerning the Refund of Customs Duties defines "the amount of raw materials required for the production of export goods " shall include the amount of normal loss (the amount of loss and wear) generated in the production process." Article 10 (1) provides that an applicant for refund shall prepare a document stating that the amount of the raw materials required for the export goods shall be calculated on the basis of the statement of accounts for the amount required (the "statement of accounts for the amount required" hereinafter) as prescribed by Presidential Decree. Article 11 (1) of the Enforcement Decree of the Act on the Special Cases concerning the Refund of Customs Duties provides that the person who intends to prepare the statement of accounts for the amount required shall report to the head of the competent customs office and calculate the amount required under the conditions as reported by the Commissioner of the Korea Customs Service.

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 process of normally producing export goods (excluding the quantity of raw materials used in the process of producing export goods) and "by-products" means the total quantity of raw materials generated in addition to the production process of export goods and are sold or used for private use; "the total quantity of raw materials" means the total quantity of goods generated in the process of producing the goods for a specific period of time divided by Article 10 (1) of the Act and Article 11 of the Decree; and "the total quantity of raw materials generated in the process of producing the goods for a specific period of time" by Article 1-2 of the former Act; "the total quantity of raw materials generated in the process of producing the goods for a specific period of time by type" and Article 11 of the Decree.

Furthermore, 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, by-products shall be deemed to have generated by-products. Paragraph (2) provides that "the deduction rate by-products" shall be "the deduction rate 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 by-products: Provided, That where it is difficult to calculate the price A; (b) if it is difficult to calculate the price of the raw materials by-products, the deduction rate by-products in paragraph (4) shall be applied to the deduction rate by-products; and (d) provides that "the refund rate by-products" shall be calculated in total by-products (1 - (1) the deduction rate by-products).

C. Comprehensively taking account of the contents, form, purport, etc. of the relevant laws and regulations as seen earlier, each provision of the former Notice and the former Notice of the Korea Customs Service is based on delegation of the former Petroleum Business Act that provides that the Minister shall determine and publicly notify “B, such as the refund standards or the subject, size, method, etc. of refund,” and thus, it shall be deemed that the same has the effect as an external binding legal order when supplementing the content of the relevant laws and regulations and combining them.

Furthermore, when collecting charges from a petroleum refiner, etc., but refunding part of the charges under the former Petroleum Business Act, thereby setting the amount of charges to be finally borne by the 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 Imposition of 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 former Public Notice and Public Notice given by the former Customs Service, which set the basis for calculating refund, shall be interpreted and applied as a matter of principle as the language and text, and shall not be extensively interpreted or analogically interpreted without reasonable grounds.

Fuel gas has gone through the minimum stabilization of waste gas generated in the air through separate processing by the Plaintiff, and it is not possible to sell it to a third party because it is manufactured for sale purposes or actually commercialized for the purpose of sale. Therefore, it is reasonable to view it as by-products “by-products,” rather than “the loss amount of raw materials generated in the process of normally producing export goods” as “the loss amount of raw materials generated in the process of normally producing export goods, which is an incidental economic value other than the export goods during the production process of export goods, and is sold or used by himself.”

However, in addition to the relevant regulations and the language, history, purport, etc. of the notice, ① the former public notice on estimated fuel gas is stipulated as included in by-products, but the former public notice on estimated prices of petroleum products applied during the period subject to the disposition of this case and the former public notice on the Korea Customs Service has not been clearly defined. ② The former public notice on estimated prices of petroleum by-products is stipulated in Article 21, and Article 26(1), with regard to the refund of surcharges, the amount to be refunded is clearly defined in Article 26(1), and the amount to be deducted by-products, which are one of the components of the relevant formula, should be calculated by applying the "self-required quantity of petroleum by-products" in the public notice on the Korea Customs Service. ③ However, the former public notice on estimated prices of by-products under Article 2-14(2) of the former public notice on the basis that the value of the by-products generated by-products is not the same as that of the by-products generated by-products.

D. After recognizing the facts as indicated in its holding, the lower court determined that the instant disposition rejecting the Plaintiff’s application for refund on a different premise is unlawful, on the grounds that arbitrarily calculating the required amount and the amount of petroleum subject to refund, such as the Defendant’s calculation method, without a clear legal basis as to fuel gas, is contrary to the legal principle of surcharges or clarification.

Examining the reasoning of the judgment below in light of the aforementioned legal principles and records, such judgment of the court below is just, and contrary to what is alleged in the grounds of appeal, there is no error of law by misapprehending the legal principles on the interpretation and application of the former Act on Petroleum Business, the former Act on the Protection of Mountain Villages and the former Korea Customs Service’s

2. Examining the ground of appeal No. 2 in light of the legal principles as seen earlier, where the application for refund filed by a petroleum refiner, etc. satisfies the requirements for refund under the former Act and subordinate statutes of the petroleum company and the former Act and the former Act and the Korea Customs Service Notice, the defendant shall refund the amount calculated in accordance with such provision, and shall not refuse such application without justifiable grounds.

In the same purport, the lower court is justifiable to have determined that the Plaintiff’s application for refund satisfies the statutory requirements for refund, and contrary to what is alleged in the grounds of appeal, the lower court did not err by misapprehending the legal doctrine on the legality of rejection disposition against the application for additional refund of dues.

3. Regarding ground of appeal No. 1

A. The reasoning of the judgment is sufficient to indicate the judgment on the party’s assertion and other means of offence and defense to the extent that it can be recognized that the text is justifiable (Article 208(2) of the Civil Procedure Act). Therefore, it is not necessary to determine all allegations by the party or means of offence and defense. Even if the specific and direct judgment on the party’s assertion is not indicated in the reasoning of the judgment, it cannot be deemed an omission of judgment if it is possible to find out that the assertion was quoted or rejected in light of the overall purport of the reasoning of the judgment, and even if the judgment was not actually rendered, it cannot be said that there was an omission of judgment if there was no influence on the conclusion of the judgment (see Supreme Court Decision 2015Da231894, Jan. 14, 2016).

B. Comprehensively taking account of the adopted evidence, the lower court: (i) The Plaintiff from January 1, 2007 to December 2, 2008 to the Defendant.

31. In calculating "voluntary requirements" as set forth in the notification of the Korea Customs Service, when filing an application for refund during the key period (hereinafter "the key period") and calculating "voluntary requirements" as set forth in the notification of the Korea Customs Service, the amount was paid only by applying the amount of petroleum required for the production of petroleum products subject to refund calculated on the basis of the calculation. ② On December 21, 2012, the Plaintiff calculated voluntary requirements because it did not include the 'products produced fuel gas' as before in the total amount of the 'products produced' in the 'by-products' in the 'by-products' in relation to the refund period, and then calculated the rate of refund of surcharges on the ground that it did not include the 'by-products' in the 'by-products' and calculated the amount of petroleum required for the production of petroleum products subject to refund and deducted the amount calculated on the basis of the above 'by-products' from the amount calculated on the basis of the above 'by-products'. However, the Defendant considered the application as unlawful on the ground that it did not violate the legal basis.

C. Examining the reasoning of the lower judgment in light of the aforementioned legal principles, the lower court deemed that the Plaintiff’s application for refund satisfies the requirements for refund as stipulated in the laws and regulations, and determined that the instant disposition rejecting the application for refund on the premise of a different calculation formula was unlawful. Therefore, the lower court’s determination on the party’s assertion and other means of attack and defense should be deemed as indicated in the lower judgment to the extent that

There is no error of omission of judgment on important matters affecting the decision.

4. Conclusion

Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Jo Hee-de

Note Justice Lee Sang-hoon

Justices Kim Jae-tae

Justices Park Sang-ok