C-76/70

2. Agriculture — Common organization of the markets — Cereals — Common wheat, barley, maize and rye — Threshold price — Calculation — Mistake by national authorities — Powers of the Commission — Limits (Regulation No 19 of the Council, Article 4)

1. Article 4 of Regulation No 19 of the by the Member States in fixing the Council of the European Economic threshold price does not depend on Community, on the progressive the view taken thereof by the Com­ establishment of a common organiza­ mission but on their objective con­ tion of the market in cereals must be formity with requirements of the interpreted as meaning that in calcula­ regulation, the second paragraph of ting the threshold price of cereals the Article 4 of that regulation cannot be basic target price must be reduced interpreted as conferring on the inter alia by a fixed amount corres­ Commission power to validate by its ponding to the incidence of internal conduct errors which the national taxation levied in respect of imports, authorities may commit in implement­ such as the turnover equalization tax. ing the tasks laid down in that 2. Since the validity of decisions taken article.

In Case 76/70

Reference to the Court under Article 177 of the EEC Treaty by the Finanz­ gericht Rheinland-Pfalz for a preliminary ruling in the action pending before that court between

1 — Language of the Case : German.

JUDGMENT OF 12. 5. 1971 — CASE 76/70

Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Summary of the facts Article 4 of Regulation No 19 is as and course of the pro­ follows: cedure 'With regard to common wheat and barley . . . the threshold price shall The facts and procedure may be sum­ be fixed annually by the Member marized as follows: States for an identical standard of Under Article 2 (1) of Regulation No 19: quality in such a way that the selling 'The amount of the intra-Community price of the imported product in the levy shall be equal to the difference marketing centre of the zone having between the free-at-frontier price the largest deficit, shall, after taking of the product from the exporting account of the standard amount laid Member State . . . and the threshold down in Article 2 (1) and the co­ price of the importing Member State, efficient of equivalence laid down in fixed in accordance with the provis­ Article 12, be level with the basic ions of Article 4 or Article 8, such target price provided for in Article difference being reduced by a fixed 5 below. amount determined in accordance with Each Member State shall, before 1 Article 9'. March in each year, notify the other

WÜNSCHE v HAUPTZOLLAMT LUDWIGSHAFEN

gericht Rheinland-Pfalz. Pursuant to the said Article 4, the With regard more particularly to the Federal Republic of Germany, by a rate of the levy imposed the plaintiff second order in implementation of the complains that the threshold price—one Law implementing Regulation No 19/ of the determining factors in fixing such 62/EEC, on 30 July 1962 fixed the rates—was fixed without taking account threshold prices for the Federal Repub of the levying of the abovementioned lic of Germany (Bundesgesetzblatt, 62, turnover equalization tax.

It observed that brewery quality for breweries' must also the Bundesfinanzhof based itself in par apply to barley of brewery quality be ticular on the fact that, contrary to para cause paragraph (1) of Article 4 of Regu graph (1) of Regulation No 13/64 1 lation No 19 only empowered Member Regulation No 19 did not provide that States to fix the threshold prices for account should be taken of the turnover identical standards of quality. equalization tax in calculating the By an order of 27 December 1962 threshold price.

duced the amount of each of the of Germany. threshold prices by DM 4, with effect Against this case-law of the Bundes from 1 January 1963, because the levy finanzhof the plaintiff argued before the ing of the turnover equalization tax had Finanzgericht Rheinland-Pfalz that this resulted in imposing an additional charge case-law in particular disregards the fact on imported cereals. that it is for the Court of Justice and On 1, 3 and 7 December 1962 the not the Commission or the Bundes undertaking Ludwig Wünsche & Co. finanzhof to provide an authoritative in (hereinafter referred to as 'the plaintiff') terpretation of the provisions applicable imported from France in three consign

JUDGMENT OF 12. 5. 1971 — CASE 76/70

ing Regulation No 122/62, the Com culating the levy there should be mission had intended to approve the deducted from the threshold price method of calculating the threshold an amount equal to the turnover price originally adopted by the Federal equalization tax levied in respect of Republic of Germany, such approval imports, or should this tax not have can in no way exclude the proper re view of either the national courts or been taken into consideration? the Court of Justice. (2) If it is considered necessary to take The request of the Finanzgericht was into account the domestic charges received at the Court Registry on 17 levied in respect of imports:

quality but did not at the same The Commission of the European Com time require the turnover equaliza tion tax to be taken into considera munities was represented by its Legal Adviser, Mr Kalbe. tion as regards the threshold price be considered as such a measure of assent? II — Summary of the obser In its order of reference the Finanz vations of the parties gericht takes the view in particular that differences in the wording of Regula The observations of the parties may be tions Nos 19/62 and 13/64 are irrele summarized as follows: vant regarding the deduction of internal charges from the rate of the respective A — The first question

WÜNSCHE v HAUPTZOLLAMT LUDWIGSHAFEN

other agricultural products, such as milk ing State on the price of imported products and olive oil. cereals, it follows that this must be Finally, the Commission dismisses the done when the threshold prices are argument that the taking into account fixed by the Member States and not of the turnover equalization tax is a through a deduction of the amount of matter for the complete discretion of the levy in each particular case. Con the national legislature. In fact, since sequently, the question raised by the this tax is of necessity passed on to the German court is whether, in fixing the selling price the application of this argu threshold prices, the Member States are ment amounts to allowing the national bound to take into account taxes such authorities at their discretion to increase as the German tax in question. the selling price of imported products to The Commission recalls that under a higher level than that of the basic Article 4 of Regulation No 19, the target price.

With regard to the concept of 'marketing costs' the 2. Observations of the plaintiff Commission considers that within the framework of a 'general' system of levies The plaintiff too considers that the turn such as that established by Regulation over equalization tax forms part of the No 19, there are to be considered as marketing costs which should be taken such not the costs which each individual into account in fixing the levy to be importer has actually incurred in each imposed. However, unlike the Commis particular case, but on the contrary the sion, it asserts that the taking into con costs, calculated on a flat-rate basis, sideration of the marketing costs must which each importer must unavoidably not always be effected in the abstract bear in effecting imports and which and on a flat-rate basis at the time of furthermore are included in calculating fixing the threshold price but may be the selling price properly so-called and effected with regard to variable or in are not compensated and passed on cidental expenses through a reduction

JUDGMENT OF 12. 5. 1971 — CASE 76/70

each particular case. Furthermore, even B — The second question supposing that a lump sum must be 1. Observations of the Commission adopted, the average of the actual amount of this tax is higher than the The Commission observes first that al­ amount of DM 4 per metric ton adopted though Article 4 of Regulation No 19 by the German order of 27 December confers upon it an independent power 1962. From this the plaintiff concludes of revision, it is nowhere provided that that even this amending order did not fixing of the threshold price depends on bring the German provisions into con­ its agreement and this cannot be pre­ formity with provisions of Regulation sumed by implication. Even supposing No 19. that the Commission had given its ap­ In the course of the oral procedure the proval to the turnover equalization tax's plaintiff asserted in particular that if it not being set off against the threshold is conceded that in addition to the agri­ price, which it disputes, such approval cultural levies an equalization tax in could not cover infringements of the respect of imports should be levied, then, provisions of Regulation No 19, provis­ in order not to distort the system of ions which are binding on the Commis­ stabilizing agricultural prices on the sion and on the Member States. Community market, this must either be calculated on a flat-rate basis or else 2. Observations of the plaintiff set off in accordance with its actual With regard to the second question, the amount in each particular case. plaintiff concurs with the Commission.

equalization tax on the prices of imported products. Since the importer had thereby had to pay both an intra-Community levy based on the difference between the threshold price and the free-at-frontier price fixed by the Com­ mission and the turnover equalization tax, it brought the matters before the Finanzgericht as it considered that this multiple taxation was incompatible with the provisions of Regulation No 19.

4 Under Article 4 of Regulation No 19 the threshold price for the disputed product was fixed annually by the Member States in such a way that the selling price of the imported product in the marketing centre of the zone having the largest deficit in the Member State concerned should be level with the basic target price laid down in Article 5 of that regulation. The basic target price determines the level fixed, bearing in mind the objectives laid down by Article 39 of the Treaty, in accordance with which market prices required to be aligned through the converting machinery of the common organization of the markets in the appropriate sector. In order to prevent price disturbances as a result of cheap imports the threshold price as provided for by Regulation No 19 was intended to fix through levies the level to which the price of the imported product must be increased in order that it should not be offered on the market in question at a price lower than the basic target price. In order to fulfil this condition the price of the imported product after crossing the frontier—increased by the marketing costs up to the place where the basic target price was to be applied—was required to correspond to this price, so that the threshold price was to be equal to the basic target price reduced by the marketing expenses incurred between the frontier and the first stage of wholesale marketing at the place where the basic target price was applied.

constitutes a necessary element in calculating the threshold price. If this were not the case the threshold price and, consequently the levies, would be increased by the amount of the turnover equalization tax, so that the product could not be offered at the level of the basic target price. In this respect it is clear from the provisions of and from the preamble to Regulation No 19 that the basic target price was not intended to perform the role of a minimum domestic price which the national legislature would be free to raise but was intended to act as a stabilizing element on the market. In addition, the further objective set out by the regulation itself was that in order to establish a single market the national target prices should be progressively aligned to a common target price so that the application of this regulation was to make a contribu­ tion so that the difference between the highest and the lowest national target price should not be increased. The right of the Member States to increase the selling price of imported cereals to a higher level through taxes such as the turnover equalization tax would have been incompatible with this objective. As the Finanzgericht itself notes in the grounds of its order, oppos­ ing arguments derived from regulations relating to the common organization of the markets in other sectors cannot invalidate the conclusion to be drawn from the wording of Regulation No 19.

7 The reply should thus be that Article 4 of Regulation No 19 must be inter­ preted as meaning that in calculating the threshold price of cereals the basic target price must be reduced inter alia by a fixed amount corresponding to the incidence of internal taxation levied in respect of imports, such as the turnover equalization tax.

11 Consequently, the reply must be given that the second paragraph of Article 4 cannot be interpreted as conferring upon the Commission the power to vali­ date by its conduct errors which the national authorities may commit in the implementation of the tasks laid down in that article.

Costs

12 The costs incurred by the Commission of the European Communities which submitted its observations to the Court are not recoverable. As these proceed­ ings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the Finanzgericht Rheinland- Pfalz, the decision on costs is consequently a matter for that court.

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 Economic Com­ munity, especially Article 177; Having regard to Regulation No 19 of the Council of the European Economic Community; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities,

JUDGMENT OF 12. 5. 1971 — CASE 76/70

Delivered in open court in Luxembourg on 12 May 1971.

A. Van Houtte R. Lecourt Registrar President

OPINION OF MR ADVOCATE-GENERAL ROEMER

DELIVERED ON 1 APRIL 19711

Mr President, These provisions come into play with Members of the Court, regard to the importation of barley of brewery quality from France into the The reference for a preliminary ruling Federal Republic of Germany which was which was laid before the Court by the effected by the plaintiff in the main Finanzgericht, Rheinland-Pfalz, and with action in December 1962. The com­ which we are concerned, relates to the petent customs office in fact not only interpretation of various provisions of imposed on this importation the full Regulation No 19 (Official Journal 1962, levy in accordance with the common p. 933) on the progressive establishment organization of the market in cereals but of a common organization of the markets also a turnover equalization tax of 1.5% in cereals. of the import value. The Wünsche

1 — Translated from the German.