Jinmoulong Company Customs Penalty Smuggling Administrative Dispute Case
'Creating something out of nothing' suggests the phenomenon of corruption in public power
'Knocking on the Mountain and Shocking the Tiger' to Solve Difficulties' Jin Moulong Smuggling Case '
Case Recap:
As is well known, the early rapid development of the Shenzhen Special Economic Zone was inseparable from the thriving processing trade with supplied materials, which relied on Hong Kong's unique geographical and human资源优势 and the pioneering policies of reform and opening up.
Previously, processing trade was a new form of attracting foreign investment and developing an outward oriented economy. Specifically, it means that foreign companies provide all raw materials, auxiliary materials, components, electronic parts, supporting parts, and packaging materials, and if necessary, provide equipment; The processing and assembly shall be carried out by the processing unit of the undertaking party according to the requirements of the foreign party. The finished products shall be sold to the foreign party, and the undertaking party shall collect labor fees. The equipment price provided by the foreign party shall be reimbursed by the undertaking party's labor fees. For the commissioning party, this is the use of the labor services of the receiving party to reduce product costs, while for the receiving party, it is a form of labor export based on goods.
Due to the cumbersome and complex operational procedures of "contract filing - bonded import of materials - processing and production - re export - verification" in the processing trade of incoming materials, this field is prone to smuggling crimes. In addition to the general characteristics of smuggling, smuggling crimes in this field often exhibit significant features of "moving forward and backward" in smuggling time: smuggling behavior can occur before import and export behavior, such as the filing process; It can also occur after import and export, such as contract verification, which leads to various smuggling methods such as false reporting, false verification, and unauthorized sale of bonded goods.
Since 2008, due to the market weakness caused by the US subprime mortgage and the impact of domestic macroeconomic regulation, the profit margins of processing and trading enterprises have significantly decreased. In the difficult operating environment, many processing enterprises have been reselling bonded raw materials and production equipment, and even absconding with funds after selling equipment, resulting in a significant loss of national tax revenue and disrupting the normal social and economic order. It can be said that currently, the field of material processing and trade has become a major area for smuggling crimes, accounting for nearly 80-90% of the total number of smuggling cases, and presenting characteristics such as a large number of unit crime cases, diverse criminal methods, and large amounts of tax evasion and evasion.
In response, customs in various regions of Guangdong Province have strengthened measures to prevent and control smuggling crimes in the processing and trade of incoming materials.
For example, strict investigation and punishment should be imposed on "three processing and one compensation" enterprises that use processing trade contract manuals to import bonded raw materials duty-free and resell them domestically, or process them into semi-finished or finished products and resell them, and then use fake factory transfers, fake exports and other means to balance the contract manuals, in order to deceive customs verification.
In addition, the act of falsely reporting the nature of trade by using the name of processing trade enterprises and processing manuals to falsely declare goods that are actually general trade as bonded goods for processing, in order to achieve smuggling purposes; Establish a "three processing and one compensation" enterprise, specifically engaged in illegal activities such as "backdoor" smuggling by reselling contract manuals and indicators for illegal gains, and strictly prevent and punish them
To be honest, the smuggling activities of most processing and trading enterprises cannot be separated from the indulgence and even cooperation of individual customs officers suspected of corruption who take advantage of their positions.
Therefore, there are some customs officials who are blinded by personal gain. Due to the "lack of understanding of human relationships" and "failure to actively cooperate with investigations" of enterprise operators, they use the name of "strict investigation and severe punishment" to artificially label some processing and trading enterprises that are engaged in normal production and operation as "suspected of smuggling", seize imported materials, and impose economic penalties beyond the capacity of the enterprises, causing difficulties in their production and operation, and even almost bankruptcy!
In July 2010, Shenzhen JinMouLong Technology Co., Ltd. (hereinafter referred to as "JinMouLong Company") unfortunately suffered severe punishment from a certain customs in the province (hereinafter referred to as "Customs"):
A certain customs first seized a batch of IC chips imported by Jin Moulong Company, and then determined that the company was suspected of smuggling and tax evasion on the grounds that Jin Moulong Company had been falsifying prices.
In order to maintain normal production and operation, Jin Moulong Company had to pay a deposit of RMB 500000 to a certain customs under the guidance of relevant investigators, intending to exchange and release 88215 ICs that were detained due to incorrect model reporting. Unexpectedly, the deposit was paid and the 88215 ICs that could be detained were still refused to be refunded by the customs!
Although Jin Moulong Company continuously submitted appeal materials, requested hearings, made statements, and repeatedly negotiated with a certain customs from mid July 2010 to early April 2014, it has not been effectively resolved.
On April 22, 2014, a certain customs issued the "Administrative Penalty Decision Letter [2014] A03XX" to Jin Moulong Company, deciding to confiscate 88215 ICs suspected of smuggling and recover the equivalent value of smuggled goods in the amount of RMB 890844.23!
This is like putting Jin Moulong Company to death.
In September 2014, as a last resort, Mr. Wang, the legal representative of Jin Moulong Company, came to Guangdong Zhiming Law Firm to seek help from the Wang Tengfeng legal team. He hoped that Zhiming lawyers could provide strong legal assistance to their company and that they would protect their rights in accordance with the law!
After accepting the commission of Mr. Wang, the legal representative of Jin Moulong Company, we first had our assistant lawyer do the basic work of collecting evidence, and then represented Jin Moulong Company in filing an administrative lawsuit against a certain customs in accordance with the law, and went to court to seek justice!
To be honest, from the surface evidence, the conclusion subjectively determined by a certain customs based on these pieces of evidence is not arbitrary, which is very unfavorable for Jin Moulong Company. But based on our years of experience dealing with various functional departments, we can judge that the reason why a certain customs tightly held onto a small customs declaration error made by Jin Moulong Company, and even made a small judgment that Jin Moulong Company was suspected of smuggling and tax evasion, is not solely for the sake of safeguarding national interests, as it appears to be fair on the surface. The deeper reason for this heavier punishment may not rule out the possibility that Jin Moulong Company has been producing and operating in a standardized and honest manner, without allowing any individual personnel of a certain customs to benefit, right?
So, during the trial of this case, our lawyer did not argue too much about the error of a certain customs in determining that Jin Moulong Company was suspected of smuggling and tax evasion. Instead, they listed individual cases of customs corruption reported or disclosed by the media, pointing out that customs staff occasionally neglect their duties and responsibilities. Combined with the handling method of a certain customs in this case, which detained Jin Moulong Company's processing and export goods for nearly 4 years, repeatedly detained the security deposit, refused to return the goods, and punished the recovery of huge amounts of money, it is obvious that some administrative law enforcement officers of a certain customs may be suspected of abusing human emotions and law enforcement against the plaintiff, causing the plaintiff to suffer huge losses, but turning it into a so-called "tax evasion" case. Therefore, we request the People's Court to issue a judicial recommendation to a certain customs regarding the possible law enforcement misconduct, dereliction of duty, and responsibility of certain customs personnel, and to hold them seriously accountable!
Our request of creating something out of nothing has had a shocking effect, and the relevant customs staff are well aware that if this lawsuit continues, there will be no good or bad luck. If this case is not handled properly, it is likely to implicate the insider information behind the dispute, and may even lead to other administrative problems and legal accountability.
So, under the coordination of the presiding judge, a certain customs department finally had to agree to an out of court settlement with Jin Moulong Company, ensuring a dignified ending for both parties.
The original story of the case is that in the late 1980s, Mr. Wang, who specialized in science and engineering at a university in Shandong and became a mechanical and electrical engineer after graduation, applied to work in a Hong Kong funded enterprise in Shenzhen to engage in technical management and service work.
This Hong Kong funded enterprise has been cooperating with some internationally renowned clients such as the US company Di Mouni for a long time, producing and processing various electronic toys for them. During the work process, Mr. Wang established friendly personal relationships with several foreign clients.
In the 2008 global financial crisis, many companies were forced to cease production and operations. Countless corporate and technical talents can only forge a bloody path with their own strength.
The Hong Kong funded enterprise where Mr. Wang worked was also forced to shut down due to the financial crisis. However, considering his professional technical expertise and accumulated customer resources over the years, Mr. Wang decided to establish his own enterprise to continue the business of his existing clients and embark on his difficult entrepreneurial journey.
In September 2009, after more than half a year of preparation work, Mr. Wang's self founded Shenzhen JinMouLong Technology Co., Ltd. was finally born.
Jin Moulong Company mainly produces music boxes with pictures for children's voice production for PIL Company in the United States. The IC (integrated circuit) used in the production of this music box product is purchased by the American company from Taiwanese manufacturers and directly supplied to Jin Moulong Company. Jin Moulong Company then processes or assembles them into sound music box products for export.
As soon as Jin Moulong Company was established, in order to facilitate the development of material processing business, it immediately submitted an application for the "Customs Processing Trade Manual" to a certain customs. But it was not until November 2010 that Jin Moulong Company obtained the first "Customs Processing Trade Manual". During the waiting time of more than a year from application to approval of the "Customs Processing Trade Manual", Jin Moulong Company could only declare imported IC chip parts in a general trade form at a certain customs.
On July 9, 2010, when Jin Moulong Company was declaring the 16th batch of imported ICs, the customs officer mistakenly wrote the model "MX25L8006EM11-12G" as "MX25L8006EM11-12G" ("I" was mistakenly written as "1"). The customs officer immediately seized Jin Moulong Company's batch of IC chips, and then determined that Jin Moulong Company was suspected of smuggling and tax evasion on the grounds that Jin Moulong Company had been falsely reporting IC chip prices.
Afterwards, although Jin Moulong Company repeatedly negotiated and appealed to a certain customs, they have not received fair treatment.
During the nearly four-year period from July 2010 to late April 2014, when a certain customs made a penalty decision, Jin Moulong Company repeatedly negotiated with the customs by submitting appeals, requesting hearings, and stating the company's business situation, hoping to recover the 88215 IC chips that were seized as soon as possible, in order to avoid delaying the delivery date of foreign customers and causing breach of contract. Therefore, at the suggestion of relevant personnel from the customs, Jin Moulong Company also paid RMB 500000 as a deposit to replace the 16th batch of exported IC chips to the customs, but the customs ignored it all along!
In this way, Jin Moulong Company sought justice through various channels, but did not receive fair treatment from a certain customs.
In the end, on April 22, 2014, a certain customs issued an administrative penalty decision with the number of Customs Decision [2014] A03XX, deciding to confiscate IC88215 from Jin Moulong Company and recover the equivalent price of smuggled goods in the amount of RMB 890144.23.
In fact, as an enterprise engaged in processing and trading of incoming materials, Jin Moulong Company has already fully used the 15 batches of imported IC chip parts for processing and assembling finished products and exported them all (a certain customs has confirmed this fact in the "Administrative Reconsideration Reply"). In theory, Jin Moulong Company can obtain tax refunds in accordance with the law, and there is no subjective motivation or objective basis for using low prices to evade taxes.
At the same time, as a trading enterprise engaged in contract processing, Jin Moulong Company is unable to accurately obtain the true transaction price of the involved model IC provided by foreign companies that belong to trade secrets. In the long absence of approval for the tax-free "Customs Processing Trade Manual", in order to minimize the accumulation of operating funds, it will naturally declare to customs with the insured amount of express delivery or a lower market valuation. This is a helpless act and obviously not a subjective intentional smuggling behavior. In addition, the bureaucratic style and suspected favoritism of a certain customs staff member deliberately delayed the approval of the "Customs Processing Trade Manual", which ultimately led to Jin Moulong Company declaring and importing IC chips needed for production and operation in a general trade form at a certain customs.
It is precisely the poor work style and mentality of the relevant staff of a certain customs that has led to the difficult situation of Jin Moulong Company being in a passive but actually unjust position on the surface.
Jin Moulong Company, upon receiving the Administrative Penalty Decision No. A03XX issued by a certain customs on April 22, 2014, and seeing the decision to confiscate Jin Moulong Company's IC88215 and recover the equivalent price of smuggled goods in RMB 890144.23, could no longer bear it and decided to take up legal weapons to seek justice from a certain customs.
In September 2014, Mr. Wang, the legal representative of Jin Moulong Company, personally visited Guangdong Zhiming Law Firm and requested legal assistance from Wang Tengfeng's team of lawyers! After accepting Mr. Wang's commission, Lawyer Zhiming filed an administrative lawsuit against a certain customs in accordance with the law!
Based on the trust and requirements of the party Mr. Wang, Lawyer Wang Tengfeng promises to personally appear in court to assist Jin Moulong Company in the trial and litigation work.
During the court hearing, our lawyer not only emphasized the factual errors in the case provided by a certain customs and the injustice of the client Jin Moulong Company and its legal representative Mr. Wang, but also pointed out the intentional errors and persistent violations in the customs' enforcement actions. These intentional errors and persistent illegal enforcement actions have caused great operational difficulties for legitimate private enterprises that operate in compliance with laws and regulations, which is greatly contradictory to the role of customs in "safeguarding" the development of foreign trade enterprises as required by the Party Central Committee and provincial and municipal governments.
During the trial, our side emphasized that the delay in approving the "Customs Processing Trade Manual" applied by Jin Moulong Company by a certain customs lasted for more than a year; Just because of a small mistake where "I" was mistakenly written as "1", 88215 ICs urgently needed to be assembled and exported were seized without defense or explanation. Even when Jin Moulong Company paid a deposit of RMB 500000 to replace these IC products according to the advice of a customs officer, the customs still impounded these ICs in bad faith and have not returned them until now; Furthermore, disregarding the facts and objectively determining that Jin Moulong Company is suspected of smuggling and tax evasion, an "Administrative Penalty Decision" was issued to confiscate Jin Moulong Company's IC88215 and recover the equivalent price of smuggled goods in the amount of RMB 890144.23. Such a severe punishment clearly intends to put Jin Moulong Company to death
From these enforcement actions, it can be seen that the relevant personnel of a certain customs are no longer normal law enforcement, and are almost suspected of malicious law enforcement influenced by human factors. Considering the occasional exposure of customs officers' abuse of human relationships and even corruption related behaviors in society, we believe that some individual law enforcement officers of a certain customs cannot rule out the suspicion of human relationships and deliberate harassment towards Jin Moulong Company's law enforcement actions
Our lawyer's reasonable and legal arguments were accepted by the court, and a customs officer who appeared in court also felt pressure. Finally, under the diligent coordination of the presiding judge, a certain customs was forced to agree to an out of court settlement.
Finally, a certain customs revoked the erroneous penalty decision against Jin Moulong Company and returned all 88215 confiscated ICs and a deposit of 500000 RMB; And our company Jin Moulong and its legal representative Mr. Wang also promptly withdrew the administrative lawsuit against a certain customs. Both parties reached a substantive out of court settlement, thus successfully closing the case!
After the out of court settlement of this case, Mr. Wang, the legal representative of the party Jin Moulong Company, specially customized a super sized giant banner to express his gratitude. He came to Guangdong Zhiming Law Firm to present the banner to Wang Tengfeng's legal team as a token of appreciation. The banner read "Brave warriors who are not afraid of administrative litigation and exemplary in upholding justice through law", which undoubtedly comes from his heart.
Proxy Art:
When representing the case of illegal administrative penalties for smuggling and tax evasion by Jin Moulong Company, the reason why we were able to force a peace with the always strong national administrative agency - a certain customs is because as the agent of the plaintiff Jin Moulong Company, our lawyer emphasized and strongly argued in the trial that Jin Moulong Company did not actually have subjective intentions or objective behaviors of smuggling.
We first analyze that since its establishment, Jin Moulong Company has been positioned as a processing and trading enterprise for incoming materials. Raw materials are processed into finished products and exported back to the United States without leaving the customs supervision zone. Therefore, objectively speaking, it does not have the prerequisite for smuggling. In addition, as the trading enterprises engaged in processing materials are not involved in paying import and export taxes in accordance with the law, Jin Moulong Company subjectively does not need to evade or evade customs duties.
The reason why Jin Moulong Company was severely punished by a certain customs on suspicion of smuggling and tax evasion is entirely due to the bureaucratic style of certain customs staff, who delayed the approval of their application for the "Customs Processing Trade Manual" for a long time. It cannot be ruled out that some law enforcement personnel may have ulterior motives.
Secondly, we explicitly point out that Jin Moulong Company applied for the "Customs Processing Trade Manual" when it was established, but was delayed by a certain customs for a year without approval, forcing Jin Moulong Company to temporarily declare imports through general trade methods and apply for tax refunds after the manual is approved. So, a company that should not have paid any customs import and export taxes was forced to temporarily pay the customs duties without justice.
According to the confirmed facts, Jin Moulong Company's 15 batches of imported ICs before being investigated have been used for production and export processing, and export tax refunds have been carried out in accordance with the law based on the tax paid. Jin Moulong Company has been declaring in general trade form before obtaining the Customs Processing Trade Manual, which precisely indicates that Jin Moulong Company has been accepting customs supervision and reporting taxes according to the declared price, without any subjective intention of suspected smuggling and tax evasion!
A certain customs did not reflect on their own work mistakes, but instead unfairly punished Jin Moulong Company on suspicion of smuggling, false and underpaid import and export tariffs, and suspected evasion of some tariffs! This is a typical man-made injustice! This wrongful case led to Jin Moulong Company falling into production and operation difficulties, almost going bankrupt!
Individual law enforcement officers of a certain customs have intentionally violated the law, making it impossible for a law-abiding processing and trading enterprise to survive. This is the unscrupulous and dereliction of duty of the customs. The deep root of this may be closely related to the repeated exposure of customs corruption scandals in society. Some customs law enforcement officers, suspected of attempted personal gain, deliberately made things difficult and delayed the approval of legal documents for Jin Moulong Company, resulting in the occurrence of wrongful smuggling cases!
Although there are doubts about the conclusion of a certain customs office's judgment that "Jin Moulong Company is suspected of smuggling and tax evasion" and the inference that "some customs law enforcement officers are suspected of attempted personal gain, deliberately making things difficult and delaying the approval of Jin Moulong Company's legal documents", this is not ironclad evidence. During the court debate, it is not enough to directly convince the presiding judge. Therefore, our side fully "brewed" the court's defense strategy before the trial. Based on the occasional occurrence of a large number of customs corruption cases in society, combined with the obvious and typical abnormal behavior in this case, it is determined that some customs personnel passively enforce the law and intentionally delay the approval of the "Customs Processing and Trade Manual", resulting in the innocent suffering of the plaintiff in the "suspected smuggling and tax evasion" case. Although based on the strategy of "making something out of nothing", based on this logical fact, it is suggested that the court should issue a judicial recommendation and review and hold individual customs personnel accountable for subjective dereliction of duty errors in the enforcement process as an administrative agency!
This shocking proxy opinion, based on objective facts and logical reasoning that are reasonable, ultimately convinced the trial judge from the bottom of their hearts and even shocked a certain customs officer who appeared in court! In this situation, right and wrong, legality and illegality, as well as fairness and justice without judgment, have already been revealed to the world! Therefore, it is inconvenient for the court to have any intention of favoritism again. At this point, a certain customs department is already aware that in this situation, if we insist on holding on, the chances of success are low and the chances of defeat are high. Finally, a certain customs authority had to agree to a private out of court settlement with Jin Moulong Company under the coordination of the judge. Both parties shook hands and made peace in a timely manner, and the settlement ended with dignity. The defendant, a customs officer, made self correction and finally cleared the name of Jin Moulong Company's innocent accusation of "suspected smuggling and tax evasion".
Case conclusion insights:
Whenever it is an administrative litigation case, it is common to see various flaws or errors in the administrative actions of administrative agencies, as well as non-standard law enforcement.
In the aforementioned administrative dispute litigation case, as a disadvantaged private enterprise, the ability to win again is also the result of Wang Tengfeng's team of lawyers, as the plaintiff's representative lawyer, appropriately using artistic litigation techniques and court game skills. In court, we strongly criticized the corrupt practices of human relations and law enforcement that everyone is calling for nowadays, awakening the moral conscience of judicial personnel and making them fully realize that the plaintiff Shenzhen Jinmou Long Technology Co., Ltd.'s wrongful punishment in this case is completely innocent. It is the result of individual law enforcement personnel at a certain customs crossing the moral bottom line and illegal law enforcement. This is to awaken the sympathy and sense of justice of the trial judge, and make them agree from the bottom of their hearts that the administrative errors in this case must be corrected and stopped!
Therefore, through the coordination and pressure of the trial judge, the defendant, a certain customs officer, also acknowledged his mistake and agreed to voluntarily correct it privately, reaching an understanding and settlement with the plaintiff.
The case was ultimately settled through an out of court settlement, with a customs voluntarily revoking the erroneous original administrative penalty decision, making appropriate compromise handling opinions, and the plaintiff Shenzhen Jinmou Long Technology Co., Ltd. withdrawing its administrative lawsuit against the customs. Both parties reached a happy conclusion.
Shenzhen JinMouLong Technology Co., Ltd. has gone through hardships and achieved substantial victory. The seemingly logical result is actually the result of military strategy and intelligence
In general, when facing a case, it is possible to use conventional litigation techniques to argue whether the administrative penalty procedure of a certain customs is appropriate, legal, and whether the facts are true and accurate based on the facts. Such thinking in litigation, even if completely rigorous and standardized, is highly likely to result in the plaintiff Jin Moulong Company losing the lawsuit. Because, on the surface, the plaintiff Jin Moulong Company does have a problem of paying less import taxes compared to the statutory general trade.
If artistic litigation techniques are not used in this case, and the focus of the argument is shifted beyond the narrow category of right and wrong on the surface, and is revealed from the true fairness and justice of the situation, it is unlikely that Jin Moulong Company will win against certain customs in court. Judging solely from the superficial evidence of Jin Moulong Company's alleged smuggling and tax evasion, the administrative lawsuit filed by Jin Moulong Company will undoubtedly fail!
In the trial of this case, if we use conventional litigation techniques to entangle with the other party about whether Jin Moulong Company constitutes "smuggling and tax evasion", rather than artistically avoiding the appearance of Jin Moulong Company's suspected smuggling and tax evasion, and vigorously grasping the public illegal and erroneous facts of individual law enforcement officers of a certain customs who are suspected of abusing their power and maliciously enforcing the law artificially - not only seizing imported goods urgently needed for production and operation, but also repeatedly seizing a deposit of 500000 yuan for exchanging goods, thus highlighting the obvious illegal mistake of a customs illegally imposing dual legal responsibility on the plaintiff Shenzhen Jin Moulong Technology Co., Ltd., it will be difficult to exert pressure on the defendant; If the hidden reasons for individual law enforcement personnel's illegal abuse of power and suspected abuse of law are not derived from this, it will be even more difficult to win the recognition of judges.
If we do not boldly and ingeniously link the fact that some individual customs staff artificially delayed the approval of the Customs Processing Trade Manual with the common human law enforcement behavior of the customs authority in society, and then compare it with the plaintiff Shenzhen Jinmou Long Technology Co., Ltd., who has violated the rules on the surface but suffered injustice in essence, and expose the essence of the dispute in this case, then this case will not be able to gain the sympathy and understanding of the judge's heart, nor will it be able to obtain the judge's sincere help to coordinate and force the defendant Shenzhen Jinmou Long Technology Co., Ltd. to voluntarily correct and reconcile.
In today's society, where the ideas of "officials protecting each other", "small mistakes not being corrected", and even "big mistakes difficult to correct" still pervade every corner, in administrative litigation between officials and civilians, and in civil litigation cases in legal games, if the proxy lawyer does not have superb litigation skills, but only uses conventional litigation techniques and debates on case evidence based solely on rigid legal provisions, it is very difficult to win or lose. After all, when it comes to the relationship between administrative agencies and judicial agencies, they are all part of the system and naturally sympathize with each other. Besides, who allowed your plaintiff to be caught and punished by customs for having apparent errors and flaws?!
In this case, Mr. Wang, the legal representative of Jin Moulong Company, sought help from Guangdong Zhiming Law Firm's Zhiming Litigation Art Research Center after a long period of struggle and desperation. He received precise and efficient legal assistance from Wang Tengfeng's legal team, which not only quickly relieved him of his erroneous legal responsibilities and freed him from production and operation difficulties, but also easily resolved the "government civilian conflict", straightened out the production and operation policy environment, and promoted the healthy development of Jin Moulong Company. It can be considered a fortunate experience, or the result of hardship and happiness. Meanwhile, this case has become another classic example of innovative strategic techniques.
Attachment: Relevant materials on the administrative dispute case of Jin Moulong Company
Original administrative penalty decision before litigation
X Customs of the People's Republic of China
Administrative Penalty Decision
Mou Guan Cha Jue Zi [2014] XXXX
Party involved: Shenzhen JinX Long Technology Co., Ltd. Enterprise code: 4453XXX
Address: XXXXXX, Bao'an District, Shenzhen
On July 9, 2010, the party presented the import declaration form (NO.02100XX) and declared a batch of 101117 imported integrated circuits to the customs through general trade. After investigation, the declared model of this batch of integrated circuits is "XXXX8006EM11-12G", but the actual model is "XXX8006EM1I-12G", which does not match the declared model. The other party declared a total of 16 shipments of imported integrated circuits through general trade between May 21, 2010 and July 16, 2010, and provided false prices. After verification, the tax payable for this case is 208304.28 yuan, and the tax evaded is 180049.43 yuan.
The above facts are supported by documentary evidence, physical evidence, and statements from the parties involved.
On November 29, 2011, the party concerned applied for a hearing on the "Administrative Penalty Notice" with the number X Guan Cha Guao Zi (2011) XXX that had been delivered by our customs. The Legal Affairs Department of Shenzhen XX Anti Smuggling Bureau accepted the hearing application on December 26, 2011 and held a hearing on January 11, 2012. After the hearing, it was deemed that the illegal facts in this case are clear, the evidence is conclusive, the punishment is appropriate, and the procedure is legal. The plaintiff's punishment decision is upheld.
According to the provisions of Article 7 (2), Article 9 (3), and Article 56 of the Regulations on the Implementation of Customs Administrative Penalties of the People's Republic of China, it is decided that:
1. For the integrated circuits imported on July 9, 2010, confiscated and evaded IC88215 smuggled goods corresponding to the proportion of tax payable;
2. For the 15 smuggled goods that cannot be confiscated, the equivalent price of RMB 890844.23 corresponding to the proportion of tax evaded to the payable tax shall be recovered.
The parties shall, within 15 days from the date of delivery of this penalty decision, comply with the provisions of Article 44, Article 46, and Article 48 of the Administrative Penalty Law of the People's Republic of China and fulfill the above-mentioned penalty decision.
If the party concerned disagrees with this penalty decision, in accordance with Article 9 and Article 12 of the Administrative Reconsideration Law of the People's Republic of China and Article 39 of the Administrative Litigation Law of the People's Republic of China, they may apply for administrative reconsideration to the XX General Administration in Shenzhen within 60 days from the date of service of this penalty decision, or directly file a lawsuit with the XXX People's Court within 3 months from the date of service of this penalty decision.
According to Article 51 of the Administrative Penalty Law of the People's Republic of China, if a fine is not paid on time, an additional fine of 3% of the fine amount may be imposed daily.
According to Article 93 of the Customs Law of the People's Republic of China and Article 60 of the Regulations on the Implementation of Customs Administrative Penalties of the People's Republic of China, if a party fails to fulfill the penalty decision within the prescribed time limit and does not apply for reconsideration or file a lawsuit with the people's court, the customs may change the value of the detained goods, items, or transportation vehicles to offset the payment in accordance with the law, or offset the payment with the guarantee provided by the party; You can also apply to the people's court for compulsory enforcement.
July 4, 2014
written administrative accusation
Plaintiff: Shenzhen JinMouLong Technology Co., Ltd
Legal representative: Wang X
Address: XXXXXX, Bao'an District, Shenzhen
Defendant: XX Customs of the People's Republic of China
Legal representative: XX
Address: XXXXX Joint Inspection Building, Shenzhen
Lawsuit Request:
1. The judgment revokes the defendant's Administrative Penalty Decision (X Guan Cha Jue Zi [2014] A0XXX) made on April 22, 2014;
2. The defendant is ordered to return the 88215 confiscated ICs and the collected deposit of RMB 500000;
3. The defendant is ordered to bear all litigation costs in this case.
Facts and Reasons
The plaintiff Shenzhen JinMouLong Technology Co., Ltd. was established in September 2009, mainly producing children's audio book music boxes for PIL Company in the United States. The IC (integrated circuit) used in the production of music box products was purchased from Taiwanese manufacturers by American companies and directly supplied to the plaintiff. The plaintiff processed the audio music box products on behalf of PIL Company and exported them all. After the establishment of the company, the plaintiff applied to the customs for the "Customs Processing Trade Manual" in order to facilitate the import of materials processing business. However, it was not until November 2010 that the plaintiff obtained the first "Customs Processing Trade Manual". During this period, the plaintiff could only declare the import of IC at XX customs in the form of general trade.
On July 9, 2010, when the plaintiff was declaring the import of the 16th batch of ICs, the defendant seized the plaintiff's batch of ICs due to the customs declarant mistakenly writing the IC model "MX25L8OO6EM11I-12G" as "MX25L8006EM11-12G". The defendant then accused the plaintiff of smuggling and evading taxes on the grounds that the plaintiff had been falsely reporting prices. On April 22, 2014, the plaintiff issued an Administrative Penalty Decision (X Guan Cha Jue Zi [2014] A0312), which decided to confiscate 88215 of the plaintiff's ICs and recover the equivalent price of RMB 890844.23 for smuggled goods. At the suggestion of customs investigators, the plaintiff paid a deposit of RMB 500000 to the defendant in 2010 in order to obtain the release of 88215 ICs seized due to false reporting of models.
In fact, the plaintiff's mistake in writing "I" as "1" in the IC model is purely a typographical error. The defendant also mistakenly wrote the model of the IC in question as "MXIC25L8OO6EM1I-12G" in the "Administrative Reconsideration Reply", and in the model of the IC in question "MX25L8OO6EM1I-12G", "I" only represents the temperature range of production and working hours. Writing "1" incorrectly will not affect customs supervision and the import tax rate of the goods. On the other hand, regarding the issue of the plaintiff smuggling and evading taxes by falsely reporting prices, the plaintiff's behavior can at best be a problem of "false declaration", rather than intentional price smuggling to evade supervision and evade taxes. The plaintiff, as an enterprise engaged in material processing business, has used the first 15 batches of imported ICs for production and processing for export (the defendant has also confirmed this fact in the "Administrative Reconsideration Reply"). The plaintiff is entitled to a tax refund in accordance with the law, and there is no need or basis for the plaintiff to use underreporting prices to evade taxes. At the same time, as a contract processing enterprise, the plaintiff cannot accurately know the true transaction price of the involved IC, which is a trade secret. Therefore, the plaintiff's use of valuation for customs declaration is a helpless act and not an intentional smuggling behavior.
The plaintiff believes that the administrative penalty decision made by the defendant, X Guan Cha Jue Zi [2014] A0XXX, which found that the plaintiff had engaged in smuggling activities, has no factual basis, and the application of relevant laws to punish the plaintiff is clearly incorrect and must be revoked in accordance with the law. The plaintiff's goods involved in the case and the security deposit collected, which were wrongly detained by the defendant, shall be refunded. As a small enterprise, the plaintiff is already struggling to survive and now faces the risk of bearing huge penalties. In order to safeguard their legitimate rights and interests, the plaintiff applied for a hearing and conducted administrative reconsideration in accordance with the law, but the defendant still insisted on the original punishment decision. Therefore, the plaintiff has filed an administrative lawsuit in accordance with the law and earnestly requests the court to judge all of the plaintiff's claims based on facts and in accordance with the law.
Yours sincerely
Shenzhen XX People's Court
Applicant: Shenzhen XXX Technology Co., Ltd
2014-9-4
Basic Agency Approach
1. The error in the plaintiff's declared price does not constitute a subjective intentional smuggling act under the law, but rather an objective declaration that violates customs supervision regulations. The decision on the case found that the plaintiff's smuggling was an error in the application of the law in determining the facts
The plaintiff does not have a specific form of smuggling behavior. The error in the plaintiff's declared price is due to the objective declaration of false price, rather than intentional falsification of price. Subjectively, there is no intention to evade customs supervision, but objectively, at the time of declaration, the true price of the IC involved in the case could not be known, only the price could be estimated. After the incident, the US company only provided the so-called formal invoice price. The plaintiff is still unclear about the actual transaction price of the IC involved in the case, which belongs to third-party trade secrets.
The plaintiff does not have the subjective purpose of smuggling and evading taxes. According to the confirmed facts, the first 15 batches of imported ICs by the plaintiff were used for production and processing for export. The plaintiff has lawfully applied for export tax refunds based on the amount of taxes already paid. The plaintiff does not have the necessary and objective possibility to use underreporting prices to evade taxes. The plaintiff has been declaring in the form of general trade, which precisely indicates that the plaintiff has been subject to customs supervision and reporting taxes according to the declared price.
2. Regarding the complex reasons for the occurrence of this case:
The delay in issuing the "Customs Processing Trade Manual" to the plaintiff by the customs resulted in the plaintiff's materials belonging to "processing with supplied materials" being declared only in general trade form, and the plaintiff had to pay customs duties that should not have been paid.
The plaintiff, as a small and micro enterprise, strives to engage in international trade. Due to the complexity of international trade, it is impossible for the plaintiff to know the actual transaction price of the IC involved in the case, which belongs to third-party trade secrets. The plaintiff has to pay the estimated price of customs duties that should not have been paid.
The defendant disregards the subjective and malicious distinction between intentional smuggling and tax evasion as stipulated by law and violation of customs supervision regulations. The external manifestation of smuggling behavior certainly violates customs supervision, but not all violations of customs supervision regulations are smuggling behavior. The plaintiff's false declaration of price is a violation of customs supervision regulations that does not constitute smuggling behavior. The defendant's mechanical application of legal provisions for incorrect characterization and punishment violates the legislative intent and purpose of punishing as a crime. Resulting in the plaintiff's long-term and unremitting struggle for rights protection.
3. Regarding the handling of this case:
This case should be handled truthfully in accordance with Article 15 of the Implementation Regulations of Customs Administrative Penalties of the People's Republic of China regarding the situation of "false declaration"; As a struggling small enterprise, the plaintiff cannot bear the pain of huge penalties. The defendant's erroneous penalty decision is revoked, and the plaintiff's repeatedly detained goods and the 500000 yuan exchange deposit already paid are returned. This will reduce the various obstacles that private enterprises face on their development path and benefit the country and the people!
Administrative penalty notice reissued after litigation settlement
XX Customs of the People's Republic of China
Administrative Penalty Notice
XXX Zi [2015] A00105
Shenzhen JinMouLong Technology Co., Ltd.:
According to our investigation, your company has engaged in the following illegal activities:
On July 9, 2010, Jin X Long Company declared a batch of 101117 imported integrated circuits through general trade. After customs inspection, the declared model of this batch of integrated circuits is MX25L8006EM11-12G. The inspection report shows that the actual model is MXIC25L8006EM11-12G, which does not match the declared model. The declared import price of this batch of goods to the customs is 0.035 US dollars, but the actual import price is 0.28 US dollars. The declared import price does not match the actual import price, and it is suspected of intentionally falsifying the import price, constituting smuggling behavior of evading customs supervision and evading payable taxes. After customs verification, a total of RMB 32778.64 was evaded in taxes,
In addition, your company smuggled a total of 15 imported goods through general trade from May 21, 2010 to July 9, 2010. The declared import price did not match the actual import price, which is suspected of false price declaration and constitutes an illegal act under customs supervision regulations. According to customs calculations, a total of RMB 151450.06 was missed in tax payments.
The above documents include on-site inspection records, detention decisions and lists, appraisal and evaluation reports on gold, silver, jewelry, and jewelry, customs tax calculation certificates and lists, interrogation records, and records of information (statements) provided by the parties as evidence.
According to Article 82 (1) and Article 86 (3) of the Customs Law of the People's Republic of China, Article 49 of the Regulations on the Implementation of Customs Administrative Penalties of the People's Republic of China, and Articles 27 and 31 of the Administrative Penalty Law of the People's Republic of China, we hereby propose to make the following new handling opinions on your company:
1. Revoke the administrative penalty decision made in the original "XXXX [2014] A0312" Administrative Penalty Decision and refund the deposit of 500000 yuan paid by your company;
2. According to Article 7 (2) and Article 9 (1) (3) of the Implementation Regulations of Customs Administrative Penalties of the People's Republic of China, it is decided to confiscate 101117 integrated circuits smuggled and imported by your company on July 9, 2010;
3. According to Article 62 of the Customs Law of the People's Republic of China, it is decided to pursue the unpaid tax of 151450.06 yuan on the remaining 15 batches of goods.
According to Article 32 of the Administrative Penalty Law of the People's Republic of China, if you (the unit) have any objections to the facts, reasons, and basis disclosed above, you may submit a written defense or statement of opinions to our office within 3 days from the date of delivery of this notice. If overdue, it shall be deemed as a waiver of the right to defend and make statements.
According to Article 42 of the Administrative Penalty Law of the People's Republic of China and Article 49 of the Regulations on the Implementation of Customs Administrative Penalties of the People's Republic of China, if you (the unit) have objections to the facts, reasons, and basis disclosed above, you may request a hearing. If a hearing is requested, a written application should be submitted to our office within 3 days from the date of delivery of this notice. If overdue, it shall be deemed as a waiver of the right to request a hearing.
Shenzhen Customs
February 2, 2015
XX People's Court, Shenzhen City, Guangdong Province
Administrative ruling
(2014) XXX Xingchu Zi No. 52
The plaintiff, Shenzhen JinMouLong Technology Co., Ltd., has its registered address at XXXX, Xinhetongfuyu Industrial Zone, Fuyong Street, Bao'an District, Shenzhen.
The legal representative Wang X is the chairman of the company.
Entrusted agent Cao Guanghui, a lawyer from Guangdong Zhiming Law Firm.
Entrusted agent Wang Tengfeng, a lawyer from Guangdong Zhiming Law Firm.
The defendant, XX Customs of the People's Republic of China, has its domicile at the XXXXX Joint Inspection Building in Shenzhen.
The legal representative Peng X is the director of the customs.
The authorized agent Niu X is a staff member of the relevant department.
The authorized agent Huang X is a staff member of the relevant department.
The plaintiff, Shenzhen JinMouLong Technology Co., Ltd., is dissatisfied with the administrative penalty imposed by the defendant, XX Customs of the People's Republic of China, and has filed a lawsuit with this court. After accepting the case, a collegial panel was formed in accordance with the law to hear it. During the trial, the plaintiff Shenzhen JinMouLong Technology Co., Ltd. voluntarily submitted a withdrawal application to this court on April 9, 2015.
This court believes that the plaintiff Shenzhen JinMouLong Technology Co., Ltd. voluntarily submitted a withdrawal application to this court, which complies with legal provisions. According to Article 51 of the Administrative Litigation Law of the People's Republic of China and Article 63, Paragraph 1, Item (10) of the Interpretation of the Supreme People's Court on Several Issues Concerning the Implementation of the Administrative Litigation Law of the People's Republic of China, the following ruling is made:
Allow the plaintiff Shenzhen JinMouLong Technology Co., Ltd. to withdraw the lawsuit.
The acceptance fee for this case is RMB 50, which will be halved and borne by the plaintiff Shenzhen JinMouLong Technology Co., Ltd.
Chief Judge Zhang X
Judge Wang X
Acting Judge XX
April 9th, 2015
Secretary Yuan X
Excerpt from Wang Tengfeng's book "Lawyer's Wisdom: Analysis of Classic Cases in Literary and Artistic Rights Protection Litigation".
