(Reference for a preliminary ruling from the Tribunale di Trento)

«(Directive 92/12/EEC – Article 20 – Export to non-member countries of products under duty-suspension arrangements – Products having to be considered not to have arrived at their destination by reason of the falsification of the accompanying document – Place of the offence or irregularity unknown – Determination of the Member State in which excise duty is chargeable)»

Opinion of Advocate General Mischo delivered on 21 March 2002

Judgment of the Court, 12 December 2002

Summary of the Judgment

Tax provisions – Harmonisation of laws – Excise duty – Directive 92/12 – Products moving under duty-suspension arrangements intended for export to non-member countries but not arriving at their destination – Offence deemed to have been committed in the Member State of departure – Possibility of the operator who has guaranteed the payment of excise duty's providing evidence to the contrary – Subject to a time-limit of four months from the date of dispatch – Not permissible if insufficient to safeguard rights of defence – Relative invalidity of the corresponding provision (Council Directive 92/12, Art. 20(3))

Where, in connection with the rules laid down by Directive 92/12 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products, products subject to excise duty and moving under duty-suspension arrangements do not arrive at their destination and it is impossible to determine where the offence or irregularity was committed, Article 20(3) of the Directive provides, on the one hand, that the offence or irregularity is deemed to have been committed in the Member State of departure, which is therefore entitled to collect the excise duty and, on the other, that within a period of four months of the date of dispatch of the products, the persons concerned may provide evidence of the correctness of the transaction or of the place where the offence or irregularity was actually committed. That provision is invalid in so far as the period of four months is relied on against a trader who has guaranteed the payment of excise duty but was not in a position to know, at the appropriate time, that an offence, consisting of failure to discharge the duty-suspension arrangement, had been committed. In such circumstances, the application of that period of four months from the date of dispatch of the products at issue does not satisfy the principle of respect for the rights of defence. see paras 47-48, 53-54, operative part

JUDGMENT OF THE COURT 12 December 2002 (1)

((Directive 92/12/EEC – Article 20 – Export to non-member countries of products under duty-suspension arrangements – Products having to be considered not to have arrived at their destination by reason of the falsification of the accompanying document – Place of the offence or irregularity unknown – Determination of the Member State in which excise duty is chargeable))

In Case C-395/00, REFERENCE to the Court under Article 234 EC by the Tribunale di Trento (Italy) for a preliminary ruling in the proceedings pending before that court between

and

Ministero delle Finanze,

on the interpretation of Article 20(2) and (3) of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (OJ 1992 L 76, p. 1),

THE COURT,

composed of: J.-P. Puissochet, President of the Sixth Chamber, acting for the President, M. Wathelet, R. Schintgen and C.W.A. Timmermans (Presidents of Chambers), C. Gulmann, D.A.O. Edward, A. La Pergola, P. Jann, V. Skouris, F. Macken (Rapporteur) and N. Colneric, Judges, Advocate General: J. Mischo, Registrar: H.A. Rühl, Principal Administrator,

after considering the written observations submitted on behalf of:

─ Distillerie Fratelli Cipriani SpA, by N. Tonolli, W. Valentini and W. Wielander, avvocati,

─ the Portuguese Government, by L. Fernandes and C. Pimentel Coelho, acting as Agents,

─ the Commission of the European Communities, by E. Traversa, acting as Agent,

having regard to the Report for the Hearing,

after hearing the oral observations of Distillerie Fratelli Cipriani SpA and the Commission at the hearing on 29 January 2002,

after hearing the Opinion of the Advocate General at the sitting on 21 March 2002,

gives the following

By order of 20 October 2000, received at the Court on 26 October 2000, the Tribunale di Trento (District Court, Trento) referred to the Court for a preliminary ruling under Article 234 EC three questions on the interpretation of Article 20(2) and (3) of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (OJ 1992 L 76, p. 1, the Directive).

Those questions were raised in proceedings between Distillerie Fratelli Cipriani (Cipriani) and the Ministero delle Finanze (Ministry of Finance) concerning various notices served by the Ministry on Cipriani for the payment of excise duty on certain consignments of alcohol moving under the duty-suspension arrangements.

The relevant provisions

In accordance with its Article 3(1), the Directive is applicable to alcohol and alcoholic beverages.

4

Under Article 4(a) of the Directive, an authorised warehousekeeper means a natural or legal person authorised by the competent authorities of a Member State to produce, process, hold, receive and dispatch products subject to excise duty in the course of his business, excise duty being suspended under tax-warehousing arrangement.

According to Article 4(c) of the Directive, suspension arrangement means a tax arrangement applied to the production, processing, holding and movement of products, excise duty being suspended.

6

Under Article 5(1) of the Directive, the products referred to in Article 3(1) are to be subject to excise duty at the time of their production within the territory of the Community or of their importation into that territory.

7

Article 6 of the Directive provides:

Excise duty shall become chargeable at the time of release for consumption or when shortages are recorded which must be subject to excise duty in accordance with Article 14(3). Release for consumption of products subject to excise duty shall mean:

(a) any departure, including irregular departure, from a suspension arrangement;

(b) any manufacture, including irregular manufacture, of those products outside a suspension arrangement;

(c) any importation of those products, including irregular importation, where those products have not been placed under a suspension arrangement.

The chargeability conditions and rate of excise duty to be adopted shall be those in force on the date on which duty becomes chargeable in the Member State where release for consumption takes place or shortages are recorded. Excise duty shall be levied and collected according to the procedure laid down by each Member State, it being understood that Member States shall apply the same procedures for levying and collection to national products and to those from other Member States.

8

Under Article 13(a) of the Directive, an authorised warehousekeeper is required to provide a guarantee, if necessary, to cover production, processing and holding and a compulsory guarantee to cover movement, the conditions for which shall be set by the tax authorities of the Member States where the tax warehouse is authorised.

In accordance with Article 15(3): The risks inherent in intra-Community movement shall be covered by the guarantee provided by the authorised warehousekeeper of dispatch, as provided for in Article 13, or if need be, by a guarantee jointly and severally binding both the consignor and the transporter. If appropriate, Member States may require the consignee to provide a guarantee. The detailed rules for the guarantee shall be laid down by the Member States. The guarantee must be valid throughout the Community.

10

By virtue of Article 18(1) of the Directive, notwithstanding the possible use of computerised procedures, all products subject to excise duty moving under duty-suspension arrangements between Member States are to be accompanied by a document drawn up by the consignor. This document may be either an administrative document or a commercial document. The form and content of this document are to be established in accordance with the procedure laid down in Article 24 of the Directive.

11

Article 19(4) of the Directive provides that, where the products subject to excise duty which are moving under the duty-suspension arrangement as defined in Article 4(c) are exported, this arrangement is to be discharged by an attestation drawn up by the customs office of departure from the Community confirming that the product has indeed left the Community. That office must send back to the consignor the certified copy of the accompanying document intended for him.

In accordance with Article 19(5), if there is no discharge, the consignor is to inform the tax authorities of his Member State within a time-limit to be fixed by those tax authorities. The time-limit may not, however, exceed three months from the date of dispatch of the goods.

13

Article 20 of the Directive provides: (1) Where an irregularity or offence has been committed in the course of a movement involving the chargeability of excise duty, the excise duty shall be due in the Member State where the offence or irregularity was committed from the natural or legal person who guaranteed payment of the excise duties in accordance with Article 15(3), without prejudice to the bringing of criminal proceedings. Where the excise duty is collected in a Member State other than that of departure, the Member State collecting the duty shall inform the competent authorities of the country of departure. (2) When, in the course of movement, an offence or irregularity has been detected without it being possible to determine where it was committed, it shall be deemed to have been committed in the Member State where it was detected. (3) Without prejudice to the provision of Article 6(2), when products subject to excise duty do not arrive at their destination and it is not possible to determine where the offence or irregularity was committed, that offence or irregularity shall be deemed to have been committed in the Member State of departure, which shall collect the excise duties at the rate in force on the date when the products were dispatched unless within a period of four months of the date of dispatch of the products evidence is provided which is considered satisfactory by the competent authorities of the correctness of the transaction or of the place where the offence or irregularity was actually committed. (4) If, before the expiry of a period of three years from the date on which the accompanying document was drawn up, the Member State where the offence or irregularity was actually committed is ascertained, that Member State shall collect the excise duty at the rate in force on the date when the goods were dispatched. In this case, as soon as evidence of collection has been provided, the excise duty originally levied shall be refunded.

14

The Directive was transposed into Italian law by Legislative Decree No 504 of 26 October 1995 (Consolidated Law on production and consumption taxes and related criminal and administrative penalties, GURI No 279 of 29 November 1995, Ordinary Supplement No 143, p. 5), Article 7 of which corresponds to Article 20 of the Directive.

The dispute in the main proceedings and the questions referred

15

Cipriani has been active in the alcohol distilling business for several years.

16

As an authorised warehousekeeper of dispatch within the meaning of Article 15(3) of the Directive, between December 1996 and November 1997 Cipriani performed various operations involving the movement under duty-suspension arrangements of alcohol products intended for export to non-member countries via one or more Member States.

17

Those products were dispatched under cover of the accompanying administrative documents (AADs) provided for in Article 18(1) of the Directive.

18

The Italian tax authorities asked the German authorities to investigate a number of AADs under the arrangements for administrative cooperation in matters of excise duties. As a result of those investigations, it came to light that the stamps affixed to those AADs attesting to the products' having left the territory of the Community had been falsified.

19

Since that amounted to an irregularity for the purposes of the Directive and of the applicable national provisions, the Ufficio Tecnico di Finanza di Trento (the Finance Office, Trento) by notice served on Cipriani on 16 March 1998 demanded that the latter which, as authorised warehousekeeper of dispatch, was required to guarantee the payment of excise duties where an irregularity was found to have been committed, should pay the sum of ITL 6 448 296 by way of excise duties on 20 consignments of neutral alcohol of molasses moving under the duty-suspension arrangements.

On 6 April 1998 two other notices were served on Cipriani, demanding payment of ITL 19 044 116 432 and ITL 947 034 352, respectively, by way of excise duty on two further consignments of neutral alcohol of molasses, also moving under the duty-suspension arrangements.

21

Those notices were served after the expiry of the period of four months from the date on which the products were dispatched, set in Article 20(3) of the Directive.

22

It is apparent from the documents in the case in the main proceedings that it was not until the notices demanding payment of excise duty were served by the Italian tax authorities that Cipriani became, or could have become, aware of the falsification of the stamp affixed to the AADs.

23

By summons served on the Ministry of Finance on 30 March 1998, Cipriani brought an action before the national court, arguing, first, that no excise duty was payable because there was no proof that the products had been released for consumption in Italy, second, that the national provision implementing Article 20 of the Directive was not applicable because the excise duties may be demanded only if its liability for the offence or irregularity has been established and, lastly, that the Italian authorities were not entitled to recover the tax, since they had not produced evidence that they had been unable to establish the actual destination of the products.

24

On the same grounds Cipriani also contested the two notices demanding payment served on 6 April 1998.

25

The Ministry of Finance maintains, first, that the fraudulent approval of the AADs was tantamount to release of the products for consumption in Italy, since it was an improper discharge from the duty-suspension arrangements, thus making duty payable.

26

Second, it contends that the obligation to make payment of those duties falls on Cipriani as authorised warehousekeeper and that the Member State of departure, in this case the Italian Republic, has the power to demand the payment of such duties.

27

In addition, the Ministry of Finance argues that the burden of proving the correctness of the transaction or proving where the goods were released for consumption falls upon the consignor, which entitles the Italian Republic to recover the excise duties at the end of the four-month period provided for by Article 20(3) of the Directive, it being the State of departure and the State in which the irregularity or offence is deemed to have been committed. Once that period had expired, the consignor could no longer provide that evidence in order to challenge the power of the Member State concerned to collect those duties.

28

Taking the view that resolution of the dispute before it called for interpretation of Article 20(2) and (3) of the Directive, the Tribunale di Trento decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling:

Where products destined for export via one or more Member States are moved under the suspension arrangement defined in Article 4(c) of Council Directive 92/12/EEC of 25 February 1992 but fail to reach their destination, and it is impossible to ascertain where the irregularity occurred or where the offence took place, is Article 20(3) of that directive to be interpreted as meaning that the Member State of departure may collect the excise duties only if the party that has guaranteed payment has been promptly put in a position to ascertain that there has been no discharge from the suspension arrangement, in such a way as to enable that party to provide, within the four-month period following the date of dispatch of the products, satisfactory evidence of the correctness of the transaction or of the place where the irregularity in fact occurred or where the offence was in fact committed?

In the event that Question 1 is answered in the affirmative, does the same interpretation also hold good, in the same circumstances, where the Member State of departure is also the Member State where the offence was committed or where the irregularity occurred, or, in such a case, does the presumption set out in Article 20(2) of Directive 92/12/EEC apply? If that presumption applies, may evidence be furnished of the correctness of the transaction or of the place where the irregularity in fact occurred or where the offence was in fact committed, and is such evidence subject to the time-limit laid down in Article 20(3)?

In the event that Question 1 is answered in the negative, is Article 20(3) of Council Directive 92/12/EEC of 25 February 1992 to be interpreted, in the same circumstances, as meaning that a party that has guaranteed payment of excise duty and has not been promptly put in a position to ascertain that there has been no discharge from the suspension arrangement is entitled to furnish evidence of the correctness of the transaction or of the place where the irregularity in fact occurred or where the offence was in fact committed even after the expiry of the four-month period following the date of dispatch of the products?

The first and third questions

29

By its first and third questions, which it is appropriate to consider together, the national court in substance asks whether, on a proper construction of Article 20(3), the period of four months allowed by that provision for evidence to be provided of the correctness of the transaction or of the place where the irregularity or offence was actually committed may be relied on against a trader who has guaranteed the payment of the excise duties but was not in a position to know, at the appropriate time, that the duty-suspension arrangements had not been discharged.

Observations submitted to the Court

30

Cipriani maintains that the period of four months provided for by Article 20(3) of the Directive cannot begin to run until the moment when the person concerned has, or could have, become aware of the offence or irregularity and not from the time when the products subject to excise duty were dispatched. If it were otherwise, that person would be deprived of the right to defend himself where irregularities are discovered after that period has expired.

31

According to Cipriani, either the period within which it can put forward its grounds of defence is still running, or the act served on it is vitiated inasmuch as it does not refer to that period.

32