C-8/65

JUDGMENT OF THE COURT 8 FEBRUARY 19661

Acciaierie e Ferriere Pugliesi SpA v High Authority of the European Coal and Steel Community

Case 8/65

Summary

Basis of assessment — Estimated assessment — Statement of reasons

When an estimated assessment is made, When an undertaking supplies explanations which, by briefly setting forth the essential which are not irrelevant, the High Author­ factor on which it is based, is sufficient in ity, as defendant, may not restrict itself to a law, the administration is not bound to mere assertion that these explanations are explain such assessment in detail or repro­ not entirely conclusive and abstain from duce the accounting documents and tech­ stating the reasons for its decision. nical analyses on which it is based.

Application for the annulment of the decision of the High Authority of the European Coal and Steel Community of 13 November 1964, relating to the applicant's financial obligations under the scheme for the equalization of imported ferrous scrap and scrap treated as such,

1 — Language of the Case: Italian.

JUDGMENT OF 8. 2. 1966 — CASE 8/65

THE COURT

composed of: Ch. L. Hammes, President, L. Delvaux, President of Chamber, A. M. Donner (Rapporteur), R. Lecourt and R. Monaco, Judges,

Advocate-General: J. Gand

I — Facts account was sent to the applicant by registered letter of 8 April 1963, showing a The company Acciaierie e Ferriere Pugliesi, balance of 39 329 539 lire due to the which has two steelworks, one at Bari and equalization scheme. the other at Giovinazzo, contests the indi­ After the applicant company had raised vidual Decision of 13 November 1964, objections, the High Authority adopted the whereby the High Authority ordered it to Decision of 13 November 1964 the sub- pay 39 329 539 lire by way of contributions stance of which was identical with the letter due under the imported ferrous scrap of 8 April 1963. equalization scheme. In it, the corrections to the declarations of During the period when the compulsory purchases of ferrous scrap were stated as scheme for the equalization of ferrous scrap follows: was in operation, that is to say from April 'Whereas the undertaking has, by registered 1954 to November 1958, the applicant letter of 18 June 1963, raised objections company declared purchases of ferrous with regard to the basis ofassessment to con­ scrap totalling 129 614 metric tons. After tribution, claiming that the High Authority two checks made on the spot by the agents has wrongly included certain quantities of of the Société Fiduciaire Suisse (in April ferrous scrap, namely, 3 655 metric tons, in 1957 for the period from 1 April 1954 to the tonnage liable to the contribution; 13 January 1957, and in April 1960 for the Whereas with regard to the 3 655 metric period from 1 February 1957 to 30 tons in dispute the following should be November 1958) the High Authority indi­ borne in mind: cated, by letter of 29 March 1961, that the By letter of 19 December 1961, the depart­ assessed total of purchases of scrap appear­ ments of the High Authority communicated ed higher than the declared amount of to the undertaking a table summarizing the 25 372 metric tons. basic tonnages subject to contribution The applicant supplied fresh documents broken down into the different accounting and after a third check had been carried periods; out on the spot, the High Authority on Whereas the 10 520 metric tons of ferrous 19 December 1961 notified the applicant of scrap shown in column (b) were noted in a more favourable assessment fixing the the accounts presented during the checks difference between the quantity declared carried out at the undertaking's premises and the quantity as checked at 10 520 in April 1957, April 1960 and July 1961; metric tons. In accordance with Article 6 Whereas these checks confirmed that the of Decision No 7/63, a statement of undertaking had not correctly drawn up its

1 055 metric tons of ferrous scrap pur­ chased which the undertaking states were intended for its integrated 1/ 4/54—31/ 3/55 29 841 1 583 28 258 foundry (an activity not subject to 1/ 4/55—21/ 1/57 69 653 2 862 66 791 the Treaty), without however sup­ 1/ 2/57—30/ 4/57 6 534 344 6 190 plying any definite proof of this; 1/ 5/57—31/ 7/57 6 532 320 6 212 1/ 8/57—31/10/57 7 789 364 7 425 9 200 metric tons of ferrous scrap, which 1/11/57—31/ 1/58 5 394 280 5 114 the undertaking considered as 1/ 2/58—30/ 4/58 4 142 380 3 762 return scrap without however show­ 1/ 5/58—31/ 7/58 6 846 441 6 405 ing that it had used these quantities 1/ 8/58—30/11/58 3 403 291 3 112 for this purpose; on the other hand, 140 134 6 865 133 269 that quantity must be considered as equivalent to an increase in the Whereas the 3 655 metric tons of ferrous stocks of ferrous scrap, as is clear scrap in dispute were calculated by the from the general statement of undertaking by subtracting from the movements of ferrous scrap; 133 269 metric tons (the tonnage on which 364 metric tons of ferrous scrap sold, the assessment was based, after deduction originating from the integrated of the exemption for steel castings) the foundry's stocks of ferrous scrap 129 614 metric tons declared without (not subject to contribution) which taking account of the fact that as a result the undertaking wrongly deducted; of the abovementioned checks the basic

JUDGMENT OF 8.2.1966 — CASE 8/65

Failure to observe that the Community whereas the undertaking did not dispute provisions concerning equalization do the material accuracy of the statement;'. not apply to the quantities of ferrous scrap used in the foundry (infringement The present application, lodged on 29 of Decision No 2/57); January 1965, is against this decision, which 3. Alternatively, failure to observe that the reached the applicant company on 20 Community rules concerning equaliza December 1964.

costs; tons) stated at the time of the said checks and the applicant reserves all rights in and consequently the basic tonnage subject cluding, if necessary, the right to put to contribution fixed at 140 134 metric tons forward fresh submissions'. must be upheld' constitute a reversal of the The defendant contends that the Court burden of proof. Since the applicant had should: supplied all the necessary documents, it 'notwithstanding all other conclusions and was for the High Authority to prove that objections to the contrary, dismiss as un the quantities of purchased scrap used in founded the application made on 25 the steelworks were higher than those January 1965 by the company Acciaierie e declared. Ferriere Pugliesi against the individual In its second submission the applicant Decision of 13 November 1964, and order seeks to prove that the quantities of ferrous

scrap used in the foundry were higher than but is to be explained by the retrieval of those acknowledged by the defendant. It ferrous scrap returned to stock without has produced extracts from its books of being checked or declared. invoices in order to establish the total of The defendant replies that no documentary the iron products sold and properly in evidence on the foundry pig-iron had ever voiced during the period in question. A been produced so that it was impossible to quantity of 3 444 metric tons was concern check the allocations of ferrous scrap ed, increased by 200 metric tons of iron purchased and consumed among the

Conse for each melt, the figures did not agree. quently the defendant wrongly included From this it must be concluded that the only 1 552 metric tons, subtracting 1 055 undertaking used in its steelworks material metric tons (regarded in the decision as which it did not declare. The deductions scrap purchased) and 1 347 metric tons which the applicant claims to be able to (regarded in the decision as used in the make from the calculation of quantities of steelworks in the absence of any definite ferrous scrap sold or re-used are valueless, proof to the contrary). in view of the fact that the question does In its third submission the applicant seeks not concern the operation of works which to prove that the quantities of ferrous might have been able to obtain ferrous scrap re-used or for forging and therefore scrap by any means but concerns the not liable to contribution, were higher than surplus stocks in the steelworks. those acknowledged by the defendant. The The defendant denies that it is reversing the applicant states that it declared a total of burden of proof, arguing that it is for the 20 227 metric tons of ferrous scrap intended applicant to give reasons for having in for re-sale or for use for forgings. The stock a larger quantity than that appearing defendant only agreed a quantity of 11 027 from its declarations, and to explain why

ment of movements of ferrous scrap' pro was no evidence of use in the foundry or duced by the defendant at the request of re-use, and in absence of that evidence the the Court, the applicant relies on a report defendant assumed that the ferrous scrap by Campsider which assesses the average was used by the steelworks or to increase percentage of retrievals effected by the stocks. However the argument in the state Italian iron and steel industries at 28%. ment of defence differs from and contra The retrievals declared by the applicant dicts the decision, since the defendant constitute only 9.1 % of its total production. claims that the evidence for re-use or use It follows that the increase in stocks was in the foundry was of no avail because the not caused by purchases of ferrous scrap basic factor was the increase in stocks, so

The first submission

The applicant maintains that the contested decision infringes an essential proce­ dural requirement consisting in a failure to state adequately the reasons for the decision. According to the applicant the decision only justifies the corrections made to the declarations supplied by the applicant to fix the assessment of its contri­ butions by the mere assertion that the evidence for the use of the ferrous scrap in dispute elsewhere than in its steelworks was not supplied, although that evidence would have been capable of exempting the ferrous scrap from the equalization charges. In so reversing the burden of proof, the defendant failed to give reasons sufficient in law for the corrections to the declarations, which were properly made by the applicant, of the quantities of ferrous scrap subject to contribution.

In the sixth and seventh recitals in the preamble to the contested decision the differences found, when the checks were carried out, between the tonnages declared and the tonnages in fact subject to equalization contributions, are declared to amount to 10 520 metric tons. In the eighth recital the said decision shows the corrections to be made as follows:

' 1 055 metric tons of ferrous scrap purchased which the undertaking states were

ACCIAIERIE E FERRIERE PUGLIESI v HIGH AUTHORITY

intended for its integrated foundry (an activity not subject to the Treaty), without however supplying any definite proof of this; 9 200 metric tons of ferrous scrap, which the undertaking considered as return scrap without however showing that it had used these quantities for this purpose; on the other hand that quantity must be considered as equivalent to an increase in the stocks of ferrous scrap, as is clear from the general statement of movements of ferrous scrap; 364 metric tons of ferrous scrap sold, originating from the integrated foundry's stocks of ferrous scrap (not subject to contribution) which the undertaking wrongly deducted; 1 347 metric tons of ferrous scrap transferred from the steelworks to the foundry, for which operation no evidence has as yet been supplied.'

In the first place the applicant complains that the contested decision increased the basis of its assessment to contribution by 1 055 and 1 347 metric tons of ferrous scrap which the High Authority wrongly refused to recognize as having been used in the iron foundry. In support of its argument, the applicant has produced extracts from its books of invoices to establish that, during the period in dispute, its sales of iron products increased to quantities incompatible with a consumption of ferrous

JUDGMENT OF 8.2. 1966 — CASE 8/65

scrap of less than 4 000 metric tons, so that the defendant improperly and without sufficient justification limited the consumption of ferrous scrap in the iron foundry to 1 552 metric tons.

The defendant has not given any specific reply to the arguments thus put forward and has limited itself to relying on the absence of complete industrial accounts for the iron foundry. It has also failed to give any precise reasons for the figures adopted. The factors put forward by the applicant have thus not been sufficiently refuted. It is thus apparent that the contested decision contains no basis for applying the rules concerning the High Authority's estimated assessment of contributions to charges under the equalization scheme.

In the second place the applicant complains that the contested decision increased its basis of assessment to contribution by 9200 metric tons of ferrous scrap, which the High Authority considered as corresponding to an increase in stocks subject to equalization charges. It is said that this is in fact return scrap constituting own resources which are not assessable by virtue of Article 4 (2) of Decision No 2/57.

ACCIAIERIE E FERRIERE PUGLIESI v HIGH AUTHORITY

C — Costs

Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs. Since the defendant has failed in its submissions it must be ordered to pay the costs.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Coal and Steel Community, especially Article 33; Having regard to Decisions Nos 2/57 and 13/58 of the High Authority of the European Coal and Steel Community; Having regard to the Protocol on the Statute of the Court of Justice of the European Coal and Steel Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, especially Article 69 (2);

THE COURT

A. Van Houtte Ch. L. Hammes

Registrar President