C-38/77

In Case 38/77

Reference to the Court under Article 177 of the EEC Treaty by the

Tariefcommissie (an administrative court of last instance in revenue matters),

Amsterdam, for a preliminary ruling in the proceedings pending before that court between

ENKA BV

and

Advocate-General: J.-P. Warner Registrar: A. Van Houtte

gives the following

ENKA v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN

JUDGMENT

Facts and issues

The judgment referring the matter to the with regard to customs legislation for Court and the written observations trade with third countries are to apply submitted under Article 20 of the under the same conditions to trade

accepted as value sent via Rotterdam to Arnhem (the customs purposes if, in particular, 'that Netherlands) where they are stored in a price is adjusted, if necessary, to take customs warehouse under the control of account of circumstances of the sale Enka BV, which is also a member of the which differ from those on which the AKZO group, pending sale and delivery normal price is based'. by Ferenka. In this case a consignment of the goods was sold and delivered to As regards in particular determination of Goodyear SA, Colmar-Berg (Grand the value for customs purposes of goods

Duchy of Luxembourg). placed in a customs warehouse, Article 10 of Council Directive No 69/74/EEC The action before the Tariefcommissie of 4 March 1969 on the harmonization of (an administrative court of last instance provisions laid down by law, regulation in revenue matters) between Enka BV or administrative action relating to and the Inspecteur der Invoerrechten en customs warehousing procedure (OJ Accijnzen te Arnhem (the Inspector of English Special Edition 1969 (I), p. 82) Customs and Excise, Arnhem) arises out provides that as regards the price paid or of the method of calculation of the value payable 'the costs of warehousing and of for customs purposes when the goods are preserving the goods while in warehouses declared for import ex the customs borne by a purchaser shall not be warehouse. included in the value for customs

purposes where the price paid or payable 2. Since the action concerns goods 'new' by that purchaser is taken as the basis for imported in 1973 from a Member valuation'. State to one of the existing Member States, Article 46 of the Act of Accession 3. The import declaration was drawn up applies, by which the provisions in force by Enka on the basis of a 'normal price'

not accept the latter two deductions Article 16 g of the Tariefbesluit 1960 Enka brought an action before the as quoted above adequately reflect

Tariefcommissie against his decision. the wording of Article 10 of the

Before that court the Inspector relied, as previously-mentioned directive? regards the costs of storage in the i. If the Court answers the first question

warehouse, on Article 16 of the in the affirmative and the second in g Tariefbesluit (Customs Order) 1960, the negative, must Article 10 (2) (d) of adapted in the light of Directive No the Council Directive of 4 March 69/74/EEC and which, as amended in 1969 then be interpreted as meaning 1970, provides that: that where the price paid or payable

is the basis for valuation it must be 'For the purpose of determining the reduced by the costs of warehousing value of goods released from bonded the goods while in warehouses or stores?'

warehouses and places of provisional or

Commission of the European Com­

munities in accordance with Article 20 of

According to the Inspector that the Protocol on the Statute of the Court

provision, which, where the costs of of Justice of the EEC.

storing the goods in a warehouse are

included in the price agreed between the

the parties on 31 March 1977 and laid down by law, regulation or

received at the Court Registry on 4 April administrative action relating to customs 1977, the Tariefcommissie asked the warehousing procedure. The disparity

ENKA v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN

between such provisions, in particular as voerrechten en Accijnzen, [1977] ECR regards the fixing of duties and charges 113) the Court of Justice has stated that ex warehouse, affects the common 'it would be incompatible with the

customs arrangements. The directive is binding effect attributed to a directive by intended, by means of harmonization, to Article 189 to exclude, in principle, the

the the it ensure uniform application of possibility that the obligation which

having direct effects on the relations individuals'

The Commission observes that in the between Member States and

context of proceedings under Article 177 (judgment of 4 December 1974 in Case of the Treaty the Court cannot give a 41/74, Van Duyn v Home Office [1974]

reply to the second question which ECR 1337). Article 10 of Directive No concerns the interpretation and validity 69/74/EEC contains the provisions

of a national provision but that when which the Member States must take into

replying to the third question it may account in declaring the value for provide the national court with all the customs purposes of goods placed in a

borne by the purchaser, they may be competent authorities, without regard to

invoiced by two different methods: either the existence of measures embodying the the invoice may show the amount of terms of the directive in national law. those costs separately or it may state only the aggregate sum, including both the The provision contained in Article 10 (2) purchase price and the costs of (d) constitutes the application, to a

warehousing. It considers that whilst the specific case, of the provisions of

wording of Article 10 (2) (d) of the Regulation No 803/68 of the Council of

directive allows both possibilities to be 27 June 1968 on the valuation of goods

considered Article 16 g of the for customs purposes.

51/76, Verbond van Nederlandse took place before importation or outside

Ondernemingen Inspecteur der In­ v the customs territory of the Community

JUDGMENT OF 23. 11. 1977 - CASE 38/77

and that the costs incurred after The 'price on a sale related to deposit in importation or within the customs the warehouse'

applies to cases in which

importer territory of the Community must warehousing is arranged by an therefore be excluded from it. who has purchased goods from a foreign manufacturer or trader. That price

may be accepted for It is payable'

as the value the goods. that price to which

customs purposes, if, in particular, 'that Article 10 (2) (d) refers when it provides

price is adjusted, if necessary, to take that if that price is used as the basis for account of circumstances of the sale determining the value, it must not

which differ from those on which the include the costs warehousing and of of

normal price is based'. Thus, the price preserving the goods. The restriction in charged may be used as the value for Article 10 (2) (d) which states that the

price but only those which have resulted

Having regard to those considerations, in a difference as compared with the the aim of the provision contained in normal price. Article 10 (2) (d) appears clearly. When the goods are stored in a warehouse they The objection that, in the case of are in fact, apart from their situation as prolonged warehousing, the deduction of regards the payment of customs duties, the costs of warehousing may result in a already within the customs territory of negative value for customs purposes is the Community. All the circumstances therefore invalidated. In order to which, from that moment, lead to a determine whether the costs of modification in the price as compared to 'borne'

warehousing are by the purchaser the normal price must therefore be it is in principle irrelevant whether those excluded from the value for customs costs are referred to separately on the purposes. As regards the price adopted as invoice or included in a comprehensive the basis for determining the value for total. Article 16 g of the Tariefbesluit is customs purposes Article 10 of Directive not required to make a distinction No 69/74/EEC provides for three between those two cases. In the first case possibilities: (separate reference) the costs of

The first, which is not referred to warehousing may be excluded from the

value for customs purposes. In the explicitly, is the 'normal price'

within the second case it is possible, by referring to meaning of Article 1 of Regulation No the origin of the provision, to arrive at 803/68 (that is, the price which the goods would fetch on a sale in the open market the same result by means of an

ENKA v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN

March 1969 on the harmonization of In the opinion of the Netherlands provisions laid down by law, Government the purchase price 'paid or

regulation or administrative action payable'

cannot be affected by the costs

relating to customs warehousing of warehousing. If the contrary were true

procedure confers on individuals it would be necessary to check in each

interpreted as meaning that if the Regulation No 803/68 is based is that of

price paid or payable by the a price which can be agreed and that

purchaser is taken as the basis in price must be the same whether it is

calculating the value of goods for agreed when the goods enter the

customs purposes and if, in addition warehouse or when they leave it. The to the price of the goods, it includes costs of warehousing have no influence an amount corresponding to the costs on the amount of the purchase price of

of warehousing and of preserving the the goods, which is determined by the

Article 16 of the Tariefbesluit 1960 the purchase price by way of costs of g warehousing of goods placed in a exactly reflects the scope of Article 10 of warehouse. There can be no Directive No 69/74. possibility of making a downward adjustment to take

account of costs of since In to the third question it warehousing reply there is no rule by which the size of that maintains, first of all, that it cannot be accepted that the Community legislature adjustment may be calculated.

wished, by means of a directive, to adopt rules departing from those laid down by The plaintiff in the main action, Regulation No 803/68. Article 10 (2) (d) represented by J. G. A. Coenraads, the is, therefore, only declaratory in nature, at Netherlands Government, represented by least in so far as it merely interprets and its Agent, Mr Van Santen and the applies the provisions of Regulation No Com­ Commission of the European 803/68 in the situation described in munities represented by its Agent, A. Article 10 of Directive No 69/74. Haagsma, submitted oral argument at the Therefore, in. order to reply to the hearing on 29 September 1977. question concerning the meaning of that article, it is necessary to refer to the provisions of Regulation No 803/68 and The Advocate-General delivered his to the principles upon which they are opinion at the hearing on 25 October based. 1977.

JUDGMENT OF 23. 11. 1977 - CASE 38/77

Decision

1 By order of 15 November 1976, received at the Court Regìstry on 4 April

Arnhem of a consignment of steel cord used in the manufacture of tyres, sold

by an Irish manufacturer to a purchaser established in the Grand Duchy of Luxembourg.

3 According to the customs authorities, the defendant in the main action, in determining the value of goods for customs purposes the costs of storing them in a warehouse cannot be deducted from the aggregate amount invoiced

by the vendor to the purchaser, whilst according to the plaintiff in the main action, that deduction must be made.

4 Article 10 (2) (d) of Directive No 69/74 provides that:

'Where the price paid or payable is taken into account in determining the

'For the purpose of determining the value of goods released from bonded warehouses ... where the price paid or payable is taken into account the

following special provisions shall apply ...:

(c) the price paid or payable taken as the basis for valuation need not be adjusted in respect of costs of warehousing and of preserving the goods '

while in warehouses

6 According to the defendant in the main action, Article 16 g and, in particular, the phrase 'need not be adjusted'

(dient niet te worden aangepast) must be interpreted as meaning that where — as is possible under Article 9 of

7 While accepting that the wording of Article 16 g of the Tariefbesluit is not

exactly the same as that of the directive, the Netherlands customs

administration maintains that the essence of the directive is respected and

that since the directive does not have direct effect the plaintiff in the main

action cannot rely on the difference between the wording of the two versions

so as to make that of the directive prevail.

JUDGMENT OF 23. 11. 1977 - CASE 38/77

national courts and if the latter were prevented from taking it into

consideration as an element of Community law.

10 That is especially so when the individual invokes a provision of a directive before a national court in order that the latter shall rule whether the competent national authorities, in exercising the choice which is left to them

as to the form and the methods for implementing the directive, have kept

within the limits of their discretion as set out in the directive.

precisely what is to be understood by the 'normal price'

of the goods, which is to be used as the basis for valuation for customs purposes, and Article 9 defines the 'price paid or payable'

which may, in certain circumstances, be accepted as corresponding to the normal price.

15 Article 10 (2) (d) of Directive No 69/74 is in fact a provision applying the said Article 9 to the particular case of goods which, before obtaining customs

clearance, were stored in a warehouse in Community territory.

ENKA v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN

that the terms of the directive must prevail over any provisions which may be incompatible with it in each Member State.

18 The answer to the first question must therefore be that Article 10 (2) (d) of Directive No 69/74 of 4 March 1969 may be relied on by parties concerned for the purpose of verifying whether the national measures adopted for its implementation are in accordance with it and that the national courts must

give it precedence over any national measures which may prove incompatible

with its terms.

The second question

19 If an affirmative answer is given to the first question, the Court is next asked

with Community rules.

22 The reply to the third question is capable of providing the necessary information in that respect.

The third question

23 The third question asks whether Article 10 (2) (d) of Directive No 69/74 must

be interpreted to mean that where the price paid or payable is the basis for

JUDGMENT OF 23. 11. 1977 - CASE 38/77

levying ad valorem duties, is to be determined on the assumption that the

goods are delivered to the buyer at the port or place of introduction into the

country of importation and that the price includes all costs incidental to the

sale and delivery of the goods at the port or place of introduction but excludes any duties or taxes applicable in the country of importation.

26 Article 1 (2) of Regulation No 803/68 reproduces that rule almost word for

word providing that 'The normal price by of any imported goods shall be determined on the following assumptions:

27 It follows from Article 9 (1) (c) of that regulation that the same distinction must be made where the price paid or payable for the imported goods is accepted as the value for customs purposes, since that price must, if necessary, be adjusted to take account of circumstances of the sale which differ from those on which the normal price is based.

28 Article 10 (2) of Directive No 69/74 concerns the application of that rule to the particular case of goods which remain in the warehouse after their

ENKA v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN

introduction into the Community territory and provides, therefore, that the costs of must not be included in the value for customs purposes warehousing since by virtue of legal fiction relating to the formation of the normal the

price they are deemed to be borne by the purchaser, that is, to be payable, within the meaning of Article 1 (2) (c) of Regulation No 803/68, within the territory of the Community.

29 That interpretation, which is in accordance with the Community rules and with the international conventions which are implemented by the provision in question, excludes that according to which such costs are either excluded

be interpreted as meaning that if the price paid or payable by the purchaser is taken as the basis in calculating the value of goods for customs purposes and

if, in addition to the price of the goods, it includes an amount corresponding to the costs of warehousing and of preserving the goods whilst in warehouses

within the territory of the Community, that price must be adjusted in such a

way as to exclude the latter factors from it.

Costs

32 The costs incurred by the Commission of the European Communities and

On those grounds,

THE COURT

in answer to the questions referred to it by the Tariefcommissie, Amsterdam,

by order of 15 November 1976, hereby rules:

1. Article 10 (2) (d) of Directive No 69/74 of 4 March 1969 may be relied on by parties concerned for the purpose of verifying whether the national measures adopted for its implementation

are in accordance with it and the national courts must give it

Pescatore Mackenzie Stuart O'Keeffe Touffait

Delivered in open court in Luxembourg on 23 November 1977.

A. Van Houtte H. Kutscher

Registrar President