C-130/78

In Case 130/78

REFERENCE to the Court under Article 177 of the EEC Treaty by the Corte di Cassazione [Court of Cassation] of Italy for a preliminary ruling in the action pending before that court between

1 — Language of the Case: Italian.

JUDGMENT OF 8.3.1979 — CASE 130/78

SALUMIFICIO DI CORNUDA S.P.A., Cornuda,

and

JUDGMENT

Facts and Issues

The facts of the case, the procedure and I — Facts and written procedure the observations submitted under Article 20 of the Protocol on the Statute of the Regulation No 14/64 of the Council of Court of Justice of the EEC may be 5 February 1964 on the progressive summarized as follows: establishment of a common organization

SALUMIFICIO DI CORNUDA v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

States, in derogation from Article 5 of The notification to the Commission Regulation No 14/64, to suspend, in indicated that bovine animals for relation to non-member countries, for fattening, weighing less than 340 kg, and the period from 1 May to 31 July 1966, frozen beef and veal for the processing the levies on imports of frozen domestic industry were excluded from the beef and veal intended for processing measure.

under customs supervision. As part of the process of applying these The Italian Republic decided to make protective measures the Italian customs use of this authorization for the period administration sent circular U.T.C.D./­ from 2 May to 31 July 1966. 1966.373/Dog/000 prot. No 6363 to its offices on 25 July 1966, laying down, in Article 16 (1) of Regulation No 14/64 particular, that as from 24 July 1966 beef provided that, if, as a result of the and veal products imported from non- application of the measures concerning member countries were to be subject to a the progressive establishment of a supplementary levy equal to 60 % of the common organization of the market in levy in force at the time of importation beef and veal, this market suffered or was threatened with serious disturbances on account of imports, in one or more Member States, liable to endanger the objectives laid down in Article 39 of the Treaty, the Member State or States concerned might, during the transitional period, take the necessary protective

JUDGMENT OF 8. 3. 1979 — CASE 130/78

and that frozen beef and veal for until 2 October 1966, the levies processing under customs supervision determined in accordance with Article 5 were likewise subject to the payment of of Regulation No 14/64 applicable to the supplementary levy, although they imports from non-member countries of remained exempt from the levy itself. adult bovine animals and derived products, in particular frozen beef and According to the third subparagraph of veal. Article 16 (2) of Regulation No 14/64 the Commission, after consulting the The Council's decision was notified to

Applying that provision, the Commission On 29 July 1966 Salumificio di Cornuda adopted Decision No 66/474 of 28 July S.p.A. (hereinafter referred to as 1966, requiring the Italian Republic to "Salumificio"), whose registered office is abolish the protective measures taken in in Cornuda, imported, through the Turin respect of adult bovine animals and customs office, a batch of 179 179 kg of calves (Journal Officiel 1966, p. 2796). boneless frozen beef, covered by tariff The Commission noted, in its decision, heading 0.02.01, Statistical No 58. The that as the Italian market in adult bovine meat came from Argentina and was animals was not suffering from or intended for processing under customs threatened with a serious disturbance at supervision. Salumificio paid customs the time, the conditions of Article 16(1) duties of 20 % in accordance with of Regulation No 14/64 had not been departmental circulars No 151 of fulfilled. 30 April 1966 and No 165 of 13 May 1966. The Commission's decision was notified to the government of the Italian Following a later check on this Republic on the same date, namely 28 transaction the Italian customs July 1966. administration demanded from Salumificio, by an instrument notified on Considering that it was necessary to take 8 September 1971, the payment of a sum measures which would allow the price of of 16 817 380 lire as a supplementary imported products to be raised to the levy. level of the guide price without affecting the volume of imports into Italy of Salumificio challenged this order on bovine animals and meat more than 22 September 1971 by an application to the Turin court. necessary, the Council, in application of Article 18 of Regulation No 14/64, on a The latter, by a judgment of 5 August proposal from the Commission, adopted 1972, allowed Salumificio's application. on 28 July 1966 Decision No 66/455, authorizing the Italian Republic to increase the levies applicable to certain imports of beef and veal from non- member countries (Journal Officiel 1966, p. 2659). By that decision the Italian Republic was authorized to increase,

On the appeal of the Amministrazione decision become applicable at the time delle Finanze dello Stato the Corte of its adoption or at the time of its d'Appello [Court of Appeal], Turin, by a notification to the State to which it judgment of 22 May 1975, reversed the was addressed? lower court's decision and declared the 4. If Question 2 is answered in the way order to pay the supplementary levy to suggested first, does the said

If Question 2 is answered in the the Council, of Articles 1 and 3 of second way suggested, that is, if the Council Decision No 66/455 and of said "decision" of the Commission Article 1 of Commission Decision No requires the adoption of domestic 66/484 in answer to the following legislation by the Member State in questions: order to give effect to it within the 1. Within the system of sources of legal system of that State, do the Community law, which of the Community provisions of which an following takes precedence: a interpretation is requested provide "decision" of the Commission of the that such domestic implementing European Economic Community, legislation must take effect, with adopted pursuant to the said Article regard to the domestic measure which 16 within the field covered by the said it is intended to abrogate pursuant to Regulation No 14/64, or a "decision" the Community "decision", as a of the Council of the European technical "annulment" or as a Economic Community, adopted technical "repeal" ("annulment" and pursuant to Article 18 of the same "repeal" being used here in the

submitted by the Commission of the plementing legislation necessary for European Communities on 8 August that purpose? 1978, by Salumificio, the appellant in the 3. If Question 2 is answered in the way main action, on 21 August 1978, and by suggested first, that is, if the decision the Government of the Italian Republic is directly applicable, does that on 7 September 1978.

(c) Third question II — Written observations sub­ Being a provision which is binding on mitted to the Court those to whom it is addressed, a decision becomes binding with regard to such persons only after notification: since the Salumificio, the appellant in the main decision was immediately enforceable the action, submits that on 29 July 1966 the Italian State was under a duty to abide supplementary levy of 60 % could not be by it immediately. charged on the meat imported by it. The protective measures which the State (a) First question was authorized to take were of an urgent nature and of immediate necessity; so the The applicant submits that, generally decision confirming, amending or speaking, the Council, by virtue of its abolishing those measures must likewise composition and the functions which it is be implemented immediately. called upon to perform, enjoys without question a position of primacy in relation (d) Fourth and fifth questions to the Commission. However, in the It follows from the various schemes for present case it should be noted that Council Decision No 66/455 and the common organization of agricultural Commission Decision No 66/474 markets, particularly in beef and veal, operate on different levels. The decision that if the protective measures taken by a taken by the Commission under Article Member State are not confirmed by the 16 of Regulation No 14/64 was to Commission, they are regarded, without confirm, amend or abolish a measure prejudice to accrued rights, as never envisaged by Article 39 of the Treaty; the Council's decision, taken under Article 18 of Regulation No 14/64, on the Commission's initiative, was designed to fill a lacuna and to counter various situations produced by the progressive establishment of the common organi­ zation of the market in beef and veal. Council Decision No 66/455 did not prevail over Commission Decision No 66/474; there was no question either of primacy or continuity as regards the two decisions: they were independent of each other and took effect on different levels.

The Member States were empowered to (a) Second question intervene only when the existence of specific, well-defined facts was It is clear from the case-law of the established; if the Commission Court, in the view of the Italian considered that the facts relied upon by a Government, that, with regard to their Member State to justify the measures specific content, decisions are capable of which it had taken did not exist, those being directly applicable. In the present measures must cease to exist ab initio, case it is important to establish whether since the facts which constituted essential or not the duty, imposed by Decision No conditions for the protective measures 66/474, to repeal the national protective themselves had been non-existent ab measures left the Italian Republic a initio. margin of discretion in complying with the order which it contained. This submission is not contradicted by the fact that, according to Article 16 (2) It is not so much a question of of Regulation No 14/64, the establishing an order of precedence Commission had to decide, within a between the two decisions, which is in maximum of four working days any case difficult to imagine, if only calculated from the date of notification, because of the different provisions which "whether the measures should be they contain, as a question of ascer­ retained, amended or abolished": the taining in what way the decision of the term "abolished" cannot be given a Council is of importance in interpreting the decision of the Commission, having literal interpretation in this context. regard to the obvious connexion which The Member State in question was exists between them since the former was obliged, in order to comply with the adopted on a proposition from the Commission's decision, to adopt a author of the latter. domestic measure whereby the measures Since the order to repeal the measures which it had applied would be annulled, was not subject to any binding time-limit that is to say regarded as if they had and was adopted at the same time as never existed. factors causing a deterioration in the A similar solution is provided for by market were recognized, it allowed the Article 77 of the Italian Constitution. Italian Republic to determine the The Commission's decision, taken under methods and the time-table, admittedly short, for adapting its legal order in such Article 16 of Regulation No 14/64, had a way as to retain control over the retroactive effect when it rejected the situation. Also, from a more general protective measures taken by a Member point of view, account should be taken State. Consequently, the Member State should, in turn, have taken a measure of the special nature, in relation to the rules laid down by Article 226 of the having retroactive effect: having regard Treaty, of the scheme for protective to the principle of equality, such a measures contained in Article 16 of Regu­ provision should have deprived of all lation No 14/64; Article 16 conferred effect, ab initio, the measure adopted in the belief that imports of beef and veal were treatening to compromise the objectives pursued by the establishment of the Common Market.

directly on each Member State a Commission's decision first took effect safeguard power with the obvious aim of becomes completely irrelevant. setting up a faster, more flexible system It might be pointed out that the second of intervention for the purpose of paragraph of Article 191 of the Treaty correcting market anomalies. Therefore and the fourth subparagraph of Article it is necessary to take account of the 16 (2) of Regulation No 14/64, expressly enormous margin of discretion which is or by implication, make the effectiveness in principle granted to the Member of the decision dependent on its States in this field; Council Decision No notification to the addressee. 66/455 had recognized the existence of a A retroactive annulment, by the market anomaly and the need to adopt Commission's decision, of the protective measures capable of remedying it.

The derogation gation from the common rules, the from the general rule, arising under Community institutions intended to Article 16 of Regulation No 14/64, is deprive the State to which the two based on the granting to each Member decisions were addressed of any margin State of its own safeguard powers, the of discretion, even a reduced margin, in exercise of which leads to the adoption formally adopting measures in dero of instruments which are not liable to be gation, which, in substance, had been either suspended or annulled as a result considered justified by the situation and of the measure taken by the Commission thus assuring a desirable continuity and which are not, in themselves, subject between the emergency remedies to any control by the Commission.

provisions, which remained the responsibility of the Italian Republic.

may be — ex nunc of course — a rule their adoption. The former are justified for the subsequent regulation of the in the event of serious disturbances, or relations between the Member States. threatened disturbances, in the market due to imports, such as are liable to Consequently the third, fourth and fifth endanger the objectives laid down in questions, in so far as they have not Article 39 of the Treaty; the latter may already been dealt with in the solution be justified by any particular situation, proposed for the first and second not necessarily of a serious nature, questions, should receive an answer to requiring a derogation from the general the effect that the fact of complying with

specified by Article 16, the Community The Commission of the European institutions were empowered to carry out Communities draws the attention of the a legal and economic appraisal, whilst as Court to the fact that the departmental regards the measures authorized by circular of 25 July 1966 subjected frozen Article 18 they might carry out a beef and veal intended for processing to political and economic appraisal. the supplementary levy, whilst the Once they had been duly notified, the notification to the Commission expressly protective measures under Article 16 excluded such products from the could be legitimately applied by Member application of the protective measure at States to private traders, at least until the

were adopted and came into force as a result of the independent decision of the Member State, which, in adopting the measures, was not obliged to await the outcome of a Community procedure; the latter could be taken only after the Council had required, or authorized,

limitations imposed by the general on this point, such a retroactive effect principles governing retroactive could not be presumed. On the other legislation, or, alternatively, be deferred hand, in view of the technical possibility until after notification. However, retro of returning any supplementary levies activity can hardly be presumed. which might have been charged after Article 12 (2) of Regulation No 14/64 notification of the decision, its taking effect at a date later than that of its prohibited, with direct effect as from 1 November 1964, the levying of any notification could not be justified by the customs duty or charge having need to provide a technical delay for the equivalent effect on imports of beef and adoption of internal repealing measures. veal from non-member countries. The As to Council Decision No 66/455, decision of the Commission requiring the notified on 29 July 1966, that was not, Italian Republic to abolish the protective being in the way of an authorization, measures notified on 23 July 1966 only directly applicable; it left to the Member renewed that prohibition. In accordance State the task of deciding whether and with Article 189 of the Treaty, as from what date it intended to make use interpreted by the case-law of the Court, of the option which it had been granted. private traders could, in the national The Italian Republic made use of that courts, rely on the legal consequences authorization from 1 August 1966.

There is nothing, either in the text of the decision or in the protective measures, but rather to compel the Member State to abolish such a system, which would permit that barrier completely and immediately obligation to be accorded retroactive whilst at the same time authorizing it to effect reaching back to the time when modify the rate of the levies; so it is not the protective measures came into force. a question of a different solution to deal The system established by Regulation No 14/64 allowed Member States to adopt, with immediate effect, the measures which they considered necessary; on the other hand the Community institutions remained completely free to intervene in the area covered by the national measures and even to take action, if appropriate, to deal with the effects which those measures had already

SALUMIFICIO DI CORNUDA v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

with an identical situation, but rather an (c) Council Decision No 66/455 auth­ independent measure to be applied in the orized the Member State to which it event of a change in the situation. There was addressed to increase, subject to need not necessarily be a direct or the conditions and the limits stated automatic link between the abolition of in the decision itself, and for the the protective measures and the use of products indicated therein, the levies the authorization under Article 18. fixed in accordance with Article 5 of The questions submitted to the Court Regulation No 14/64 and applicable should be answered as follows: to imports from non-member countries. It was incumbent on the (a) Commission Decision No 66/474 of 28 July 1966, adopted under Article Member State to determine, by 16 of Regulation No 14/64, and means of the appropriate domestic Council Decision No 66/455 of the provisions, the date of the entry into same date, adopted under Article 18 force of any national measures of Regulation No 14/64, have adopted pursuant to the author­ different aims and objectives; there ization granted. does not exist between them any relationship of precedence within the system of sources of Community III — Oral procedure law.

(b) Commission Decision No 66/474 Salumificio, the appellant in the main required the Member State to which action, represented by Piero Castellini, Advocate, of Padua, and the it was addressed to stop charging, as from 28 July 1966, the supple­ Commission of the European mentary levy adopted under Article Communities, represented by Gianluigi 16 of Regulation No 14/64. That Campogrande, a member of its Legal requirement produces direct effects Department, presented oral argument in the relationships between the and replied to questions put by the Court Member State to which the decision at the hearing on 18 January 1979. was addressed and traders and The Advocate General delivered his creates rights, in favour of the latter, opinion at the hearing on 8 February which national courts must protect. 1979.

4 It was specifically stated in the notification to the Commission that "the measure does not affect bovine animals weighing less than 340 kg and intended for fattening or frozen beef or veal for the processing industry".

5 By Decision No 66/474 of 28 July 1966, notified to the Italian Government on the same day, the Commission, having ascertained that the Italian market in beef and veal was not in fact suffering from the disturbances relied on by the Italian authorities, required the Italian Republic "to abolish the protective measures notified to the Commission on 23 July 1966".

6 On the same date the Council, acting on a proposal from the Commission, adopted Decision No 66/455, under Article 18 of Regulation No 14/64, authorizing the Italian Republic to increase the levies applicable to certain imports of beef and veal from non-member countries.

7 That decision was notified on the following day, that is 29 July 1966, and with effect from 1 August 1966 the Italian Republic abolished the protective

SALUMIFICIO DI CORNUDA v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

measures which it had introduced and made use, as from the same date, of the authorization to increase the levy on the products covered by the Council's decision.

1. Within the system of sources of Community law, which of the following takes precedence: a "decision" of the Commission of the European Economic Community, adopted pursuant to the said Article 16 within the field covered by the said Regulation No 14/64, or a "decision" of the Council of the European Economic Community, adopted pursuant to Article 18 of the same regulation?

JUDGMENT OF 8.3. 1979 — CASE 130/78

2. Is the decision of the Commission of the European Economic Community adopted pursuant to the above-mentioned article and within the field indicated above at 1. directly applicable within the domestic legal system of the Member State in question (the Italian Republic), or, on the contrary, is domestic implementing legislation necessary for that purpose?

3. If Question 2 is answered in the way suggested first, that is, if the decision is directly applicable, does that decision become applicable at the time of its adoption or at the time of its notification to the State to which it was addressed?

4. If Question 2 is answered in the way suggested first, does the said "decision" of the Commission take effect, with regard to the abrogated measure, as a technical "annulment", that is, does it have effect ex tunc from the time of the adoption of that measure, withdrawing with retro­ active effect all the consequences thereof, or does it constitute with regard to that measure a technical "repeal", that is, does it have effect ex nunc from the time (of adoption or of notification) of the "decision" itself?

5. If Question 2 is answered in the second way suggested, that is, if the said "decision" of the Commission requires the adoption of domestic legislation by the Member State in order to give effect to it within the legal system of that State, do the Community provisions of which an interpretation is requested provide that such domestic implementing legislation must take effect, with regard to the domestic measure which it is intended to abrogate pursuant to the Community "decision", as a technical "annulment" or as a technical "repeal" ("annulment" and "repeal" being used here in the particular sense clarified in Question 4)?

18 However, since the Court is not competent to investigate the facts of the case and since no question has been submitted on that matter, consideration of the question raised by the Commission must be left to the national court.

19 Article 16 (1) of Regulation No 14/64 provides that "if, as a result of the application of the measures relating to the progressive establishment of a common organization of the market in beef and veal, such market should, in one or more Member States, suffer or be threatened with serious disturbance due to imports, liable to endanger the objectives laid down in Article 39 of the Treaty, the Member State(s) concerned may, during the transitional period, take the necessary protective measures concerning importation of the products in question".

20 The first subparagraph of Article 16 (2) of the said regulation provides that the Member State concerned shall be required to notify the other Member States and the Commission of such measures not later than the date of their entry into force.

21 The third subparagraph of the said Article 16 (2) provides that, after consulting the Member States through the competent Management Committee, the Commission "shall decide by means of emergency procedure, within a maximum of four working days calculated from the notification referred to in the first subparagraph above whether the measures should be retained, amended or abolished".

22 The fourth subparagraph of Article 16 (2) adds that the decision of the Commission "shall come into force immediately".

JUDGMENT OF 8. 3. 1979 — CASE 130/78

29 In fact those measures rest on a different basis, namely Article 18 of Regu­ lation No 14/64, which provides that the Council may, acting on a proposal from the Commission, take "measures in derogation" from the regulation to take account of "special circumstances" which may exist in regard to certain products covered by that regulation.

SALUMIFICIO DI CORNUDA v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

30 Moreover, it should be noted that the derogative measures authorized by the Council on that basis do not coincide, either in nature or in scope, with the protective measures which the Commission required to be abolished.

31 From that it must follow that, although the decision taken by the Commission under Article 16 of Regulation No 14/64 and the decision taken by the Council under Article 18 of the same regulation are co-existent, there does not exist any legal connexion, or a fortiori any hierarchical relationship, between them.

32 Hence the use made by the Italian Republic, with effect from 1 August 1966, of the authorization granted by the decision of the Council cannot be regarded as constituting a condition precedent to the removal of the effects of the protective measure as required by the decision of the Commission.

33 The reply should therefore be as follows:

35 Whilst it is true that in principle nothing would have prevented the Commission from requiring the abolition of a protective measure which it considered unjustified as from the time of the introduction of that measure, it appears from the wording of Decision No 66/474 that the duty to abolish the measures in question was to take effect at the same time as the decision itself, namely on the day of the notification to the Italian Government, 28 July 1966.

36 In view of the reply given to the second question, the fifth question has lost its purpose.

Costs

37 The costs incurred by the Government of the Italian Republic and by the Commission of the European Communities, which have submitted written observations to the Court, are not recoverable.

38 As these proceedings are, so far as the parties to the main action are concerned, a step in the action pending before the Corte di Cassazione, the decision on costs is a matter for that court.

On those grounds,

Mackenzie Stuart Pescatore Touffait

Delivered in open court in Luxembourg on 8 March 1979.

A. Van Houtte A. J. Mackenzie Stuart Registrar President of the Second Chamber

OPINION OF MR ADVOCATE GENERAL REISCHL DELIVERED ON 8 FEBRUARY 1979 <apnote>1</apnote>

Mr President, 5 February 1964 on the progressive Members of the Court, establishment of a common organization of the market for beef and veal (Journal The proceedings in which the request for Officiel 1964 No 34 of 27 February a preliminary ruling arose concern the 1964, p. 562). legality of the imposition of supple­ Article 5 of the above-mentioned regu­ mentary levies by the Italian Finance lation provides for the imposition of Administration on the importation, for levies, by the importing Member State, processing under customs supervision, of on the importation of calves and adult boneless frozen beef and veal coming bovine animals, and also of derived under Common Customs Tariff heading products, from non-member States. 02.01 A II, Statistical number 58, which is therefore a product which is subject to Council Regulation No 14/64/EEC of

1 — Translated from the German.