C-159/73

JUDGMENT OF THE COURT 30 JANUARY 1974 1

Hannoversche Zucker AG Rethen-Weetzen

v Hauptzollamt Hannover (preliminary ruling requested by the Finanzgericht Hamburg)

'Sugar production levy'

Case 159/73

Summary

1 — Language of the Case: German.

JUDGMENT OF 30. 1. 1974 — CASE 159/73

HANNOVERSCHE ZUCKER AG RETHEN-WEETZEN,

and

HAUPTZOLLAMT HANNOVER,

on the interpretation of Regulation No 1009/67/EEC of the Council of 18 December 1967, on the common organization of the market in sugar (OJ L 308/67, p. 1) and of Regulation (EEC) No 142/69 of the Commission of 25 January 1969, laying down certain detailed rules for the application of the quota system for sugar (OJ L 20/69, p. 1),

A — The facts of the case, the subject market in sugar for the 1967/68 matter of the reference and the views of marketing year. the parties may be summarized as Regulation No 1009/67 comprises inter follows: alia the establishment of an interim system applicable until 1975, the main feature of which is a limitation on Community responsibility for products I — Facts and procedure coming within the scope of the 1. The common organization of the regulation. market in sugar was set up by Under this transitional system each Regulation No 1009/67 of 18 December Member State has a basic quantity fixed 1967, which replaced Regulation No by Article 23 (1). Each undertaking 44/67 of the Council of 21 February producing sugar is allotted a basic quota 1967 (OJ of 3 March 1967, p. 597) under the terms of the same provisions. which had introduced certain measures Apart from this basic quota, each for a common organization of the undertaking has a maximum quota. The

HANNOVERSCHE ZUCKER v HAUPTZOLLAMT HANNOVER

the Council. Any quantity of sugar 3. The plaintiff appealed against this which exceeds the maximum quota of decision and two earlier decisions to the the undertaking does not benefit from Hamburg Finanzgericht. By order of 24 any of the intervention measures. July 1973 the latter decided to stay the Moreover it may not be disposed of on proceedings under Article 177 of the the internal Community market. EEC Treaty and refer the following Subject to certain conditions, undertak questions to the Court of Justice for a ings may carry forward that part of their preliminary ruling: production which is outside the basic

affirmative: the 1968/69 marketing year (OJ L 273, P-11). Were surpluses arising before 1 July 1968 liable to production levy in the 2. The plaintiff is an undertaking 1968/69 sugar marketing year, or in producing sugar. Two successive the year in which the stocktaking stocktakings were made on 5 October occurred?' 1966 and 30 September 1970. On the second stocktaking, there was found an In the order for a preliminary ruling the excess of 310 973 kg of white sugar in Finanzgericht makes the following relation to the figures in the sugar tax observations in particular regarding the register ('Zuckersteuerbuch'), which is questions put: required to be maintained under German On the one hand it would be in law. accordance with the evident object of the The defendant decided to claim payment regulation in question, namely, the of an additional production levy discouragement of overproduction corresponding to the additional amount. within the Community in the most The problem arose whether — and if so practicable way, to consider as part of how — this quantity should be the basic quota that quantity of sugar apportioned over the years which could which is on hand during a particular

sugar marketing year, and it therefore production could not subsequently be appears reasonable to require payment again taken into account for the of the production levy also for surpluses collection of the production levy. The actually produced before 1 July 1968. legal view adopted by the defendant is On the other hand the carrying-over of not in accordance with paragraph 3 (1) production from one marketing year to of EEC Regulation No 142/69, which states that the calculation of the the next is subject to certain Community rules which are perhaps of an exclusive production levy is dependent solely upon nature, that is, they may not permit the amount of sugar actually produced by the factory. Surpluses produced additional quantities from a previous before the introduction of the year to be included for consideration in production levy could not, therefore, be the current sugar marketing year. Quantities to be carried forward from attributed to the sugar marketing year the 1967/68 marketing year to the 1970/71. The same position emerges 1968/69 marketing year were fixed by from the wording of Article 2 of EEC Regulation No 1789/68 of 8 November Regulation No 142/69 and from 1968. If the surpluses produced during paragraphs 3 and 4 of the (German) Regulation on the collection of a the 1966/67 and 1967/68 sugar marketing years were included for production levy for sugar, dated 13 May consideration, the resultant increase in 1969. These provisions indicate that the the quantity carried forward would production levy is assessed solely on contravene Regulation No 1789/68. The sugar produced during the current or Finanzgericht also refers to Article 33 (2) preceding sugar marketing year.' of Regulation No 1009/67, according to 4. The order of the Finanzgericht was which the quantities to be carried registered at the Court on 16 August forward from the 1967/68 marketing 1973. year 'shall be treated' as production within the basic quota for the 1968/69 The Government of the Federal Republic marketing year. In the view of the of Germany, represented by Dr Martin Seidel, and the Commission of the Finanzgericht this prompts the conclu­ sion that in principle only sugar European Communities, represented by produced during the current sugar its legal adviser, Dr Peter Gilsdorf, submitted their written observations in marketing year, having regard only to accordance with Article 20 of the those quantities validly carried forward Protocol on the Statute of the Court of under Articles 32 and 33 of Regulation No 1009/67, is to be regarded as the Justice of the EEC. quantity of sugar produced within the After hearing the report of the meaning of Article 27 (1) of Regulation Judge-Rapporteur and the opinion of the No 1009/67 or the quantity of sugar Advocate-General, the Court decided to actually manufactured within the open the oral procedure without any meaning of Article 3 (1) of Regulation preparatory inquiry. No 142/69.

that the contribution of producers, as far principle that the quantity of sugar as stocks existing on 1 July 1968 is actually produced determined the concerned, is governed by Article 33 of calculation of the production levy. This Regulation No. 1009/67 to the extent was why it was necessary as a rule to that quantities of sugar produced during take into account also further quantities the 1967/68 marketing year which of sugar the existence of which was exceed a particular amount are to be subsequently revealed and which until treated as sugar production of the then had not been recorded. 1968/69 marketing year. Since Article 33 Article 1 of Regulation No 142/69 does of Regulation No 1009/67 refers to the not allow a different result. It proceeds transitional system laid down for the from the basis of ascertaining the total 1967/68 marketing year, the measure production of a sugar factory (expressed likewise covers production arising from in white sugar) and then gives an previous marketing years. The quantity exhaustive list (paragraph 2) of the to be carried forward for the 1968/69 quantities of sugar which must be marketing year has been fixed as regards deducted from this production. This list the Federal Republic of Germany by does not mention quantities of sugar Regulation No 1789/68 as 157 001 produced during a previous marketing metric tons. year which have not been taken into The adjusted basic quota attributed to account in the calculation of the the Federal Republic of Germany for the production levy. 1967/68 marketing year has been As a result it appears from this article destributed between the various sugar that additional quantities subsequently factories and the quantity to be carried recorded are to be taken into account, forward and to be treated as within the for the calculation of the production 1968/69 marketing year was equivalent levy, in the year during which their for each factory to the difference existence has been discovered. At the between the production and the basic time of the revision of the provisions for quota in 1967/68. implementing the quota system in the To explain how it was possible that sugar sector this method has been discrepancies in the information expressly defined (Article 2 (3) of originally given to the Commission were Regulation No 700/73, OJ L 67, p. 12). subsequently discovered, the Govern­ Further, additional quantities found after ment refers to the German system of Regulation No 700/73 came into force registration of production for the could not be liable to an additional purpose of levying the tax on sugar. In production levy at no matter what time Germany, for the purpose of assessment these additional quantities were actuelly of the sugar tax each sugar factory is produced, but this was not the case as required to maintain a sugar tax register. regards additional quantities whose Each factory, itself, enters in the register existence was disclosed before 15 March its production and the goods which leave 1973.

production levy. There is no doubt that — Subsequently to allot additional if the information given at the time by quantities to the marketing year of the Federal Republic of Germany had their actual manufacture would included the additional quantities involve moreover very great subsequently found, the quantity to be administrative difficulties. The total carried forward would have been fixed sugar production of the Community at a higher amount. For these reasons it during a particular marketing year is is not possible to proceed on the basis one of the factors in the calculation that the fixing of the quantity to be of the amounts of the production carried forward by Regulation No levy for this marketing year. If the 1789/68 is conclusive. final production figures for an undertaking were subsequently The Commission first of all considers amended, it would necessarily entail Articles 1 to 3 of Regulation No 142/69 the total production of the and concludes that the question of how Community and the calculation of the additional quantities are to be the production levy being likewise treated has not been settled by this amended.

HANNOVERSCHE ZUCKER v HAUPTZOLLAMT HANNOVER

Grounds of judgment

1 By Order dated 24 July 1973, filed at the Court on 16 August 1973, the Hamburg Finanzgericht referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Regulations No 1009/67 of the Council of 18 December 1967 on the common organization of the market in sugar and No 142/69 of the Commission of 25 January 1969 laying down certain detailed rules for the application of the quota system for sugar.

JUDGMENT OF 30. 1. 1974 — CASE 159/73

2 The questions refer to the regulations relating to the production quotas laid down in respect of each sugar producer for each sugar marketing year by the national authorities within the framework of the quotas allotted by the Community provisions to each of the Member States.

This quota system provides for the imposition of a levy on quantities produced outside the basic quota but within the maximum quota, subject nevertheless to the liberty for the producer to carry forward that part of his production which is outside the basic quota up to a maximum corresponding to 10 % of the basic quota, to the following marketing year.

Before the common organization of the market in sugar came into force on 1 July 1968, the transitional system established by Regulation No 44/67 of the Council of 21 February 1967 on certain measures for the common organization of the market in sugar for the 1967/68 marketing year, while fixing production quotas, did not provide for the imposition of a production levy on excesses.

It is thus proper to seek a solution in the light of the aims and objectives of the common organization of the market, taking account of considerations of a practical and administrative nature.

5 No general stocktaking was ordered either on the coming into force of the common organization of the market in sugar on 1 July 1968 or subsequently on the transition from one sugar marketing year to the next.

According to the explanations given to the Court, the technical conditions for stocking sugar are such that stocktaking can only take place at intervals of several years.

In practice it would be difficult to determine precisely the effective production year of an excess found in relation to the stocks calculated on the basis of the producer's accounting.

The assignment of an excess to a previous sugar marketing year would entail the necessity of amending the final production figures established for this marketing year not only for the particular undertaking but also for the Member State concerned and the whole of the Community.

Such an amendment, by reason of the consequences which would be entailed retroactively for the calculation of the production quotas and the levies to be imposed on the excess production, would involve, according to the unchallenged explanations of the Commission, administrative complications out of all proportion to the result sought.

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the observations of the Government of the Federal Republic of Germany and the Commission; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Article 177; Having regard to Regulations Nos 44/67 of the Council of 21 February 1967, 1009/67 of the Council of 18 December 1967, 1029/67 of the Commission of 21 December 1967, 1789/68 of the Commission of 8 November 1968, 142/69 of the Commission of 25 January 1969 and 700/73 of the Commission of 12 March 1973; 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;

THE COURT

in answer to the questions referred to it by the Hamburg Finanzgericht, by order of that court dated 24 July 1973, hereby rules:

Sugar excesses which come to light after the expiration of the marketing year in which they were produced must be treated for the purpose of the

HANNOVERSCHE ZUCKER v HAUPTZOLLAMT HANNOVER

production levy as arising in the marketing year in which they were ascertained, even if they have been produced before the coming into force of the common organization of the market in sugar.

DELIVERED ON 17 JANUARY 1974 1

Mr President, are accorded primary importance. In short, the definition of the rule to be Members of the Court, applied necessarily involves an element 1. The questions of interpretation of law-making, which the courts are referred under Article 177 of the EEC usually unwilling to adopt as the basis of Treaty by the Hamburg Finanzgericht their decision. But, as we shall see, this is are concerned with a possibility which one of those cases where a realistic was not expressly covered by appraisal is possible only if the practical Community legislation in force at the requirements are taken into account. time with which the main action is The Commission, moreover, must have concerned, nor is there any precise appreciated the seriousness of the guideline clearly identifiable from the omission, since in Regulation No 700 of objectives of the system. 12 March 1973 (OJ L 67, p. 12), and These objectives may be enough to therefore subsequent to the events on exclude any one of the theoretically which the present reference for a possible solutions but are in themselves preliminary ruling is based, it found it insufficient to single out any one of them necessary to promulgate a rule on the as the correct one. same possibility in connection with A choice between them can be made which we are being called upon to with confidence only if, on the basis of interpret Regulation No 1009/67/EEC of these objectives, practical considerations the Council, which sets out the basic

1 — Translated from the Italian.