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  • Interpretation
  • No.641
  • Date
  • 2008/04/18
  • Issue
    • Is the uniform fine provision set forth in Article 21 of the Cigarette and Alcohol Tax Law unconstitutional?
  • Holding
    •        Article 21 of the Cigarette and Alcohol Tax Law provides that: “Rice wine sold exclusively by the Cigarette and Alcohol Public Distribution Bureau before this Law came into effect shall be sold according to the original sales price. Anyone who sells rice wine at a price higher than the original sales price shall be fined NT $2000 per bottle of rice wine sold.” While legislators have taken sales quantities into consideration when they enacted different levels of penalty, the Cigarette and Alcohol Tax Law nevertheless does not provide any adjustment measure when the fine imposed upon certain individual cases in accordance with the uniform fine provision set forth in Article 21 of the Cigarette and Alcohol Tax Law is patently severe. The heavy restriction imposed by the uniform fine provision set forth in Article 21 of the said Law on the citizen’s property right guaranteed under Article 15 of the Constitution is improper and inconsistent with the proportionality principle under Article 23 of the Constitution. Therefore, the competent authority shall immediately revise the uniform fine provision set forth in Article 21 of the Cigarette and Alcohol Tax Law and shall cease to apply the uniform fine provision one year after the announcement of this judicial interpretation. 
      
    •        Before the uniform fine provision at issue is revised, all of the fines imposed upon individual cases that were patently severe in accordance with the uniform fine provision set forth in Article 21 of the Cigarette and Alcohol Tax Law shall be modified pursuant to the legislative intent of Article 21 of the said Law and substantive due process. The competent authority shall consider the sales price, sales quantity, actual profits earned from selling rice wine at a higher price, negative impact on the market stability and other relevant factors in these individual cases for the purpose of deciding the adequate amount of fine that should be imposed in each case.
      
  • Reasoning
    •        When it is possible and necessary to differentiate levels of administrative penalty imposed upon an individual who violates obligations set forth in the administrative law, the competent authority shall impose penalty based on the seriousness of violation. To effectively enforce the law, legislators have specifically enacted different levels of penalty to punish an individual who violates obligations set forth in Article 21 of the Cigarette and Alcohol Tax Law. While legislators are not prohibited under the Constitution from enacting different levels of penalty without giving the competent authority the discretion to decide the amount of fine imposed, legislators nonetheless shall provide adjustment measures to the competent authority pursuant to the proportionality principle under Article 23 of the Constitution to avoid imposing fines that are too severe in certain individual cases.
      
    •        Ever since rice wine was sold exclusively by the Cigarette and Alcohol Public Distribution Bureau at a uniform price, it has been one of the most popular consumer goods in this country. Because cigarettes and alcohol are now available on the free market and also because of the ongoing trade negotiations with the World Trade Organization, retailers and the general public have stocked up on rice wine in anticipation of price hikes and shortage of supply, resulting in market disruptions and harm to the general consumer. Article 21 of the Cigarette and Alcohol Tax Law, which was promulgated on April 19th, 2000, and came into effect on January 1, 2002, provides that: “Rice wine sold exclusively by the Cigarette and Alcohol Public Distribution Bureau before this Law came into effect shall be sold according to the original sales price. Anyone who sells rice wine at a price higher than the original sales price shall be fined NT $2000 per bottle of rice wine sold.” The objective of Article 21 of the said Law was to prevent price hikes and maintain the rice wine supply by imposing an administrative duty on anyone who sells rice wine to sell it at the original sales price and by penalizing violators with a fine of NT $2000 per bottle of rice wine sold. Article 21 of the Cigarette and Alcohol Tax Law was an economic control measure adopted by legislators to maintain the market stability. The legislative intent of Article 21 of the said Law was legitimate in light of the shortage of rice wine and market disruptions after cigarettes and alcohol were made available on the free market. In addition, penalizing violators with a fine of NT $2000 per bottle of rice wine sold is not only an effective method to enforce the administrative duty set forth in Article 21 of the Cigarette and Alcohol Tax Law, but also a proper method to achieve the administrative objective. 
      
    •        To determine the proper penalty for those who violate the administrative duty set forth in Article 21 of the Cigarette and Alcohol Tax Law, legislators shall take the culpability of violators, and the significance and imminence of protecting the public interests into consideration. Article 21 of the said Law provides that anyone who sells rice wine at a price higher than the original sales price shall be fined NT $2000 per bottle of rice wine sold. Except in the case of those who were qualified for exemption of penalty under the administrative law, the competent authority or court did not have any discretion to modify the penalty based on the totality of the circumstances in a given case. While the penalty prescribed in Article 21 of the Cigarette and Alcohol Tax Law was harsh, it was a necessary measure when there were no other effective methods to prevent price hikes and maintain the rice wine supply. In addition, with clear specification of the prohibitive act and the penalty of violation, Article 21 of the said Law was effective and reasonable in deterring individuals from committing the prohibited act. Nonetheless, the uniform fine provision set forth in Article 21 of the said Law has led to unfair results of excessive fines in certain individual cases, and has violated the substantive due process because there is no limit on the amount of fine. This could result in a severe penalty and thereby infringe the citizens’ property right. In addition, legislators did not provide any adequate adjustment measure in Article 21 of the said Law. Specifically, there was no limit on the amount of fine that could be levied to protect the citizens’ property right guaranteed under Article 15 of the Constitution. The uniform fine provision set forth in Article 21 of the Cigarette and Alcohol Tax Law is therefore improper and inconsistent with the proportionality principle under Article 23 of the Constitution. Therefore, the competent authority shall immediately revise the uniform fine provision set forth in Article 21 of the Cigarette and Alcohol Tax Law and shall cease to apply the uniform fine provision one year after the announcement of this judicial interpretation. 
      
    •        Before the uniform fine provision at issue is revised, all those fines imposed upon individual cases that were patently severe in accordance with the uniform fine provision set forth in Article 21 of the Cigarette and Alcohol Tax Law shall be modified pursuant to the legislative intent of Article 21 of the said Law and substantive due process. The competent authority shall consider the sales price, sales quantity, actual profits earned from selling rice wine at a higher price, negative impact on the market stability and other relevant factors in these individual cases for the purpose of deciding the adequate amount of fine that should be imposed in each case. 
      
    • *Translated by Li-Chih Lin, Esq., J.D
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