Avis juridique important

61969J0016

European Court reports 1969 Page 00377 Danish special edition Page 00101 Greek special edition Page 00139 Portuguese special edition Page 00143

Summary

1 . THE TAXATION OF POTABLE SPIRITS IMPORTED FROM ONE MEMBER STATE ON THE BASIS OF A NOTIONAL ALCOHOLIC CONTENT AMOUNTS TO DISCRIMINATION INCOMPATIBLE WITH ARTICLE 95 OF THE EEC TREATY .

2 . AS POTABLE SPIRITS ARE NOT AGRICULTURAL PRODUCTS ( REGULATION NO 7 ) THEY ARE NOT SUBJECT TO THE PROVISIONS OF ARTICLES 39 TO 46 OF THE TREATY .

3 . IN AGRICULTURE THE PERMITTED DEROGATIONS FROM CERTAIN RULES LAID DOWN FOR THE ESTABLISHMENT OF THE COMMON MARKET ARE EXCEPTIONS AND AS SUCH MUST BE STRICTLY INTERPRETED .

Parties

IN CASE 16/69

COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY CESARE MAESTRIPIERI, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICES OF EMILE REUTER, LEGAL ADVISER OF THE COMMISSION, 4 BOULEVARD ROYAL,

APPLICANT,

GOVERNMENT OF THE ITALIAN REPUBLIC, REPRESENTED BY ADOLFO MARCESCA, MINISTER PLENIPOTENTIARY, ACTING AS AGENT, ASSISTED BY PIETRO PERONACI, SOSTITUTO AVVOCATO GENERALE DELLA STATO, ( DEPUTY STATE ADVOCATE-GENERAL ) WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHANCERY OF THE ITALIAN EMBASSY,

DEFENDANT,

Subject of the case

APPLICATION FOR A DECLARATION THAT THE ITALIAN REPUBLIC BY APPLYING A SYSTEM OF TAXATION WHICH IMPOSES A HIGHER TAX BURDEN ON POTABLE SPIRITS IMPORTED FROM OTHER MEMBER STATES THAN ON THE CORRESPONDING NATIONAL PRODUCTS HAS INFRINGED ARTICLE 95 OF THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY,

Grounds

1 BY AN APPLICATION LODGED AT THE REGISTRY ON 31 MARCH 1969 THE COMMISSION APPLIED TO THE COURT UNDER ARTICLE 169 OF THE TREATY FOR A DECLARATION THAT THE ITALIAN REPUBLIC BY APPLYING A SYSTEM OF TAXATION WHICH IMPOSES A HIGHER TAX BURDEN ON POTABLE SPIRITS IMPORTED FROM OTHER MEMBER STATES THAN THAT ON THE CORRESPONDING NATIONAL PRODUCTS HAS INFRINGED ARTICLE 95 OF THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY.

2 IT IS NOT DENIED THAT THE ITALIAN CUSTOMS TARIFF ( SECTION IV, CHAPTER 22, HEADING 22.09, NOTE 3, P.91 ) PROVIDES THAT " IN THE CASE OF POTABLE SPIRITS THE FRONTIER DUES AND ALL OTHER DUTIES WHICH APPLY IN THE NATIONAL TERRITORY TO ETHYL ALCOHOL ( ALCOHOL ), MUST BE CALCULATED ON THE BASIS OF A MINIMUM ALCOHOLIC CONTENT OF 70 PER CENT " AND THAT THIS FLAT RATE IS NOT APPLICABLE IF THE ALCOHOL HAS AN ALCOHOLIC CONTENT EXCEEDING 70 PER CENT.

3 SINCE THE APPLICANT TAKES THE VIEW THAT THE ALCOHOLIC CONTENT OF POTABLE SPIRITS IS USUALLY 40 PER CENT TO 45 PER CENT, IT CONSIDERS THAT IMPORTED PRODUCTS ARE PLACED AT A DISADVANTAGE AS COMPARED WITH NATIONAL PRODUCTS WHICH ARE TAXED ON THEIR ACTUAL ALCOHOLIC CONTENT AND THAT THIS METHOD OF TAXATION IS INCOMPATIBLE WITH ARTICLE 95 OF THE TREATY.

4 THE DEFENDANT, ALTHOUGH IT DOES NOT DISPUTE THE DISCRIMINATORY NATURE OF THE PROVISION IN QUESTION, INVOKES THE EXCEPTIONS TO THE GENERAL RULES OF THE TREATY RELATING TO AGRICULTURE AND IN PARTICULAR TO AGRICULTURAL PRODUCTS WHICH ARE SUBJECT TO A NATIONAL MARKET ORGANIZATION. MORE SPECIFICALLY IT ARGUES THAT POTABLE SPIRITS MUST BE TREATED AS EQUIVALENT TO ALCOHOL, AN AGRICULTURAL PRODUCT WHICH IN ITALY COMES UNDER A NATIONAL MARKET ORGANIZATION, SINCE THE SAME DISTILLATION PROCESS ENABLES POTABLE SPIRITS AS WELL AS ALCOHOL TO BE OBTAINED FROM THE SAME RAW MATERIAL. THEREFORE THE DISTINCTION BETWEEN ALCOHOL AND POTABLE SPIRITS IS ARTIFICIAL AND IN FACT DOES NOT EXIST.

5 THE QUESTION OF THE NATURE OF THE CRITERIA FOR DISTINGUISHING POTABLE SPIRITS FROM ALCOHOL IS NOT RELEVANT IN THIS CASE. IT IS SUFFICIENT TO NOTE THAT BOTH COMMUNITY LAW AND ITALIAN NATIONAL LAW MAKE SUCH A DISTINCTION. THE PROVISIONS WHICH DEFINE THE COMMON MARKET IN AGRICULTURE, UPON WHICH THE APPLICATION OF THE EXCEPTIONS RELIED ON BY THE DEFENDANT IS BASED, DISTINGUISH BETWEEN POTABLE SPIRITS AND ALCOHOL.

6 IN PARTICULAR REGULATION NO 7(A ) OF THE COUNCIL OF 18 DECEMBER 1959, WHICH ADDS TO THE LIST OF AGRICULTURAL PRODUCTS IN ANNEX II TO THE TREATY ETHYL ALCOHOL, WHETHER OR NOT DENATURED, OBTAINED FROM AGRICULTURAL PRODUCTS LISTED IN THE SAID ANNEX II, STATES UNEQUIVOCALLY THAT " LIQUEURS AND OTHER SPIRITOUS BEVERAGES " ARE EXCLUDED. SINCE, IN THE CASE OF AGRICULTURE, THE PERMITTED DEROGATIONS FROM CERTAIN RULES LAID DOWN FOR THE ESTABLISHMENT OF THE COMMON MARKET ARE EXCEPTIONS WHICH MUST BE CONSTRUED STRICTLY, IT FOLLOWS FROM THIS UNEQUIVOCAL STATEMENT THAT ARTICLES 38 TO 46 OF THE TREATY CANNOT BE APPLIED TO PRODUCTS CLASSIFIED AS POTABLE SPIRITS.

7 THIS CASE REFERS ONLY TO THE FISCAL TREATMENT OF PRODUCTS COMING FROM OTHER MEMBER STATES WHICH THE ITALIAN AUTHORITIES CONSIDER TO BE POTABLE SPIRITS WITHIN THE MEANING OF HEADING 22.09 OF THEIR OWN NATIONAL CUSTOMS TARIFF, WHICH IN THIS RESPECT CORRESPONDS TO THE COMMUNITY CUSTOMS RULES.

8 IT IS TRUE THAT THE DEFENDANT ALLEGES THAT THE CONTESTED PROVISIONS DO NOT REFER TO POTABLE SPIRITS AS SUCH BUT EXCLUSIVELY TO THE ALCOHOL IN IT WHICH IS AN AGRICULTURAL PRODUCT. THIS OBJECTION CONFLICTS WITH THE DISTINCTION EXPRESSLY MADE BY COMMUNITY PROVISIONS BETWEEN POTABLE SPIRITS AND ALCOHOL AND CANNOT IN ANY WAY BE USED TO JUSTIFY DISCRIMINATION AGAINST PRODUCTS COMING FROM OTHER MEMBER STATES AS COMPARED WITH COMPARABLE NATIONAL PRODUCTS.

9 IT IS NOT NECESSARY TO CONSIDER WHETHER THERE IS IN FACT IN ITALY A NATIONAL ORGANIZATION OF THE MARKET IN VINE PRODUCTS OR WHETHER THE EXISTENCE OF SUCH AN ORGANIZATION WOULD BE LIKELY TO JUTIFY THE TREATMENT TO WHICH EXCEPTION IS TAKEN, SINCE IT IS CLEAR FROM THE FOREGOING THAT ARTICLE 95 OF THE TREATY APPLIES TO THIS CASE WITHOUT ANY QUALIFICATION. THEREFORE THE METHOD PROVIDED UNDER ITALIAN LAW TAXING POTABLE SPIRITS IMPORTED FROM OTHER MEMBER STATES MUST BE REGARDED AS BEING COMPATIBLE WITH THE SAID ARTICLE.

Decision on costs

10 UNDER ARTICLE 69(2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS. THE DEFENDANT HAS FAILED IN ITS SUBMISSIONS.

Operative part

THE COURT HEREBY :

1 . DECLARES THAT THE ITALIAN REPUBLIC BY CONTINUING AFTER 1 JANUARY 1962 TO LEVY ON POTABLE SPIRITS IMPORTED FROM OTHER MEMBER STATES FRONTIER DUES AND ALL OTHER DUTIES WHICH APPLY TO ALCOHOL IN ITS NATIONAL TERRITORY ON THE BASIS OF A MINIMUM ALCOHOLIC CONTENT OF 70 PER CENT HAS FAILED TO FULFIL THE OBLIGATIONS IMPOSED UPON IT BY ARTICLE 95 OF THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY;

2 . ORDERS THE DEFENDANT TO BEAR THE COSTS.