C-217/78

on the interpretation of Regulation (EEC) No 1259/72 of the Commission of 16 June 1972 (Official Journal, English Special Edition 1972 (II), p. 559) and of Regulation (EEC) No 232/75 of the Commission of 30 January 1975 (Official Journal 1975, No L 24, p. 45) concerning the application of the favourable tariff provisions provided for in those regulations to concentrated butter from storage,

THE COURT (First Chamber)

composed of: J. Mertens de Wilmars, President of Chamber, A. O'Keeffe and G. Bosco, Judges,

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

gives the following

JUDGMENT

reduced price must be effected by the ingredients, is finally processed into intervention agencies by the specified products (listed under (c)). tendering procedure; These products fall under heading 19.08 of the Common Customs Tariff (fine bakers' wares), ice-cream under — The tenderer may not take part in the invitation to tender unless he subheadings 18.06 B and 21.07 and powdered products (other than gives an undertaking in writing inter powdered yoghourt) for the manu­ alia to comply with certain conditions facture of the ice-cream under sub­ regarding the composition and headings 18.06 D or 21.07; production of concentrated butter, the use thereof, the time within which such use must take place and obligations to be complied with where concentrated butter is resold. — The period within which such final processing must take place (six months from the time when the 2. Having regard to the experience butter is taken over by the successful gained in the application of that regu­ tenderer); lation the Commission on 30 January 1975 adopted new legislation, Regulation No 232/75 on the sale of butter at reduced prices for use in the manu­ — The duty of the tenderer to keep facture of pastry products and ice-cream stock records enabling certain (Official Journal 1975, No L 24, p. 45). supervision to be effected.

The provisions of that regulation repeat in essence those of the earlier regulation, Article 6 (1) establishes: Article 6 (1) (f) provides finally that the — The minimum fat content of the tenderer shall undertake to include in the concentrated butter produced in an contract of sale, in the case of any sub­ approved establishment after sequent resale of concentrated butter, the processing of the butter sold from same requirements as those relating to storage by the intervention agencies the keeping of stock records and the use (the products referred to under (a)); of the product.

fulfilled". Where the processing has pursuant to Article 20 of Regulations been carried out in a Member State Nos 1259/72 and 232/75. Later, however, the authorities entrusted with other than that of sale, proof may be the customs or administrative control furnished only by production of the control copy referred to in Article 17. provided for in Article 15 of the two regulations found that proof had not — On the other hand (Article 15) "from been furnished that the use of the the time of its removal from store disputed consignments of concentrated and until it is processed into one of butter resold by Corman was in the products specified in the two accordance with the prescribed purpose. indents of Article 6 (1) (c), the butter shall be subject to customs or 4. The German customs authority equivalent administrative control". therefore requested from the importer, by a "Steuerbescheid" (notice of Finally, Article 20 amends the provisions assessment) of 4 November 1976, of Article 20 of the earlier Regulation, payment of an additional sum No 1259/72. In that regulation in view corresponding to the difference between of the fact that, in applying monetary the monetary compensatory amounts compensatory amounts to importations normally payable and the reduced into another Member State of butter amounts originally paid. from storage or concentrated butter, it was necessary to take account of the Corman's protest against that assessment reduced value of such products it was was rejected and the dispute was brought provided that the monetary com­ before the Finanzgericht Düsseldorf. pensatory amounts normally applicable Since the Finanzgericht considered: (Regulation No 974/71 of the Council) to butter, concentrated butter or butter — On the one hand that an interpre­ with added sugar should be multiplied by tation of Article 20 of the two regu­ a coefficient of 0.3. lations in question in the light of the objective pursued by the system In Regulation No 232/75 that coefficient thereby set up would logically lead to was fixed at 0.5 for all Member States the taking into account of the

ultimate use of the butter and permit 5. The order making the reference was withdrawal of the tariff advantage received at the Court on 29 September granted if it were shown that the 1978. butter was not used in accordance with its lawful purpose; and S.A. Nicolas Corman & Fils, represented by Dr Peter Wendt and H.-E. Heyn, — On the other hand that a strict in­ Rechtsanwälte, and the Commission of terpretation of the relevant the European Communities, represented provisions, which is particularly by its Legal Adviser, Peter Gilsdorf, necessary where such provisions assisted by Jörn Sack, a member of its make a concession, must lead to the Legal Department, lodged written obser­ interpretation of sale of butter or of vations in accordance with Article 20 of concentrated butter within the the Protocol on the Statute of the Court meaning of Article 20 of the said of Justice of the EEC. regulations as meaning only sale across a frontier, that is to say the Having heard the report of the Judge- transactions concerning delivery by Rapporteur and the views of the the exporter to the importer and not Advocate General the Court decided to the whole commercial transaction assign the case to the First Chamber, beginning with the sale of pursuant to Article 95 of the Rules of concentrated butter up to the final Procedure. It also decided to open the use thereof by the ultimate consumer, oral procedure after addressing a written question to the plaintiff in the main it decided, by an order of 18 July 1978, action. to stay the proceedings and to refer the following questions for a preliminary ruling to the Court of Justice, pursuant to Article 177 of the EEC Treaty: II — Written observations sub­ mitted under Article 20 of "1. Are Article 20 of Regulation (EEC) the Protocol on the Statute No 1259/72 of 16 June 1972 of the Court of Justice of (Official Journal, English Special the EEC Edition 1972 (II), p. 559) and Article 20 of Regulation (EEC) No 232/75 (Official Journal No L 24 of 31 1. With regard to the first question SA. January 1975, p. 45) to be Nicolas Corman & Fils observes first that interpreted as meaning that the on both a common-sense and a definitive preferential levy treatment systematic interpretation Article 20 of (reduction of the compensatory Regulation No 232/75 must be amounts) is subject only to the understood as making the (definitive) condition that the product be reduction of the monetary compensatory marketed in accordance with Articles amount conditional upon the existence at 1 to 19 of the regulations or is there the time of importation of a contract for the further condition that the sale which is in accordance with the product be used in the manner pre­ provisions of Article 6 (1) (f) of the regu­ scribed by the regulations? lation.

contract of sale must be in accordance different conclusion. That judgment is with the above-mentioned provisions. irrelevant to the present case since it concerns the interpretation of a provision (This also applies to Article 20 of Regu (Article 18 of Regulation No 1259/72) lation No 1259/72, since Regulation No whose nature is quite different from that 232/75 which replaced the latter is of Article 20 of Regulation No 232/75. merely an interpretative provision and does not modify the law previously in Accordingly it only remains to interpret force.) Article 20 of Regulation No 232/75 in

(Article 20). import is decisive for the purposes of determining the monetary compensatory amount which can thus be dependent The reduction in the price of butter was only on circumstances already in in fact granted with a view to the existence at the time of importation. This objective pursued by the regulation, the also applies to the reduction of the attainment of which is guaranteed by a compensatory amount provided for in processing security. It is thus logical that Article 20 of Regulation No 232/75 release or forfeiture of that security since the actual use to which the goods should depend on the provision of proof are put after their importation can have that it has been used in accordance with no effect on this point. the prescribed purpose and within the prescribed period.

It is clear from the character of such The judgment delivered by the Court of compensation that it does not constitute Justice in Joined Cases 99 and 100/76 either the imposition of a duty or the ([1977] ECR 861) does not justify a granting of a subsidy.

Furthermore, Article 2 of Regulation No purchase price of butter and the 974/71 and the second subparagraph of processing security. According to that Article 4 (1) of Regulation No 1380/75 notice the purchase price is rather the provide that monetary compensatory price offered by the successful tenderer. amounts are to be calculated on the basis of the common prices. It is certainly true that, where the security is forfeited, the total sum paid The compensatory amount applicable is by the successful tenderer corresponds to generally determined in accordance with the level of the market price for butter the level of the common prices at the or, more exactly, to the sum of the price

tation and not of its use nevertheless agency in question is established. It is not does not throw further light on the provided by the importing Member State components which make up that value. to the other Member State in question. The question must therefore be raised whether such a value derives solely from the purchase price agreed with the Consequently, since the processing intervention agency or whether it is also security does not form part of the price necessary to take account of the of the butter the reduction in the processing security. monetary compensatory amount must also remain unaffected if the goods are

JUDGMENT OF 28. 6. 1979 — CASE 217/78

In all cases where the butter is used late That consequence entails manifest disad­ or contrary to the prescribed purpose, vantages. Furthermore, since the period the successful tenderer can claim laid down in Article 15 of Regulation damages and interest only under private No 1380/75 with regard to the granting law. Such claims cannot affect the size of of monetary compensatory amounts on the monetary compensatory amount. exportation corresponds exactly to the period for processing prescribed in — Because the system of monetary Article 6 (1) (d) of Regulation No compensatory amounts is intended 232/75 it is not clear how the person only to compensate for differences in concerned could receive retroactively a rates in respect of prices and not of normal compensatory amount, especially any right to damages and interest; when the processing was late. — Because any right to damages and interest could arise only after impor­ The German customs administration is tation; aware of those difficulties and has stated

— Because such a right is subject to that it is prepared in principle to make a further conditions (for example the payment, in respect of the exportation of existence of breach of contract) butter purchased at a reduced price, of the difference between the reduced which are not necessarily present when a processing security is compensatory amount and the normal forfeited. compensatory amount.

On the other hand if it were the case For all those reasons the reduction of the that the reduction in the monetary monetary compensatory amount must compensatory amount also depends on thus remain unaffected if the goods are proof that the butter has been used in not used in accordance with the purpose accordance with the purpose laid down laid down or within the prescribed and within the prescribed period Regu­ period in the importing Member State. lation No 232/75 would have had to In support of this argument Corman make additional provision for a security further points out that where, for for such reduction. The said regulation example, butter at a reduced price was did not establish any security of that imported into a Member State with a nature.

the application of the monetary concerning processing under Article compensatory amount cannot depend 6 of the two regulations and binds either directly on the actual use of the the latter, in the event of resale, to product but at the most on the treatment transfer the obligations concerning of the processing security. processing to persons purchasing from him. Use of the goods in Forfeiture of the security entails the accordance with the purpose laid removal of the reason for the reduction down and within the prescribed in the monetary compensatory amounts. period is irrelevant. If on the other hand the security were

The Member fact that, as is made clear in Articles 6 States are not authorized to re-assess and 7 of Regulation No 1380/75, such the difference in relation to the provisions do not apply to monetary normal compensatory amount on the compensatory amounts. basis of their national customs On the basis of those considerations provisions. Corman accordingly suggests that the reply to the questions submitted should 2. The Commission first observes, with be as follows: regard to the first question, that neither

Article 20 of Regulation No should be effected under a contract 232/75 states that the products in of sale in which the seller transfers to question are those "sold pursuant to this the purchaser the obligations regulation".

purchased at a reduced price only a guarded. The re-assessment is not monetary compensatory markedly lower excluded merely because the use at than the normal amount whilst he would variance with the purpose was by sub­ not suffer excessively from the forfeiture sequent purchasers since in that case no administrative control would be of the processing security which merely covers the difference between the necessary. reduced price and the normal market price of the butter. Such a situation According to the Commission the would give rise to serious disturbances in importer can moreover pass on (for the market in butter which Regulations example through a contractual provision) Nos 1259/72 and 232/75, as it is stated the supplement to the monetary in their recitals, are in fact concerned to compensatory amount which he has been prevent. obliged to pay to the purchaser who has failed to use the goods in accordance The argument put forward by the with the purpose. Where the importer Commission is furthermore confirmed by does not take such steps for his the wording of other provisions of protection he must bear the Community law. The differences in the consequences.

wording used in adopting the various regulations governing the same subject- The principles applicable to monetary matter show that in interpreting those compensatory amounts are thus the same regulations it is impossible to accord as those which apply to the forfeiture of prime importance to the terms of such the processing security in connexion with

CORMAN v HAUPTZOLLAMT AACHEN-SUD

It Commission's interpretation would is significant in this connexion that those logically lead to the grant, where the provisions do not state that a reduced goods were used in a manner' not in amount other than the normal monetary accordance with their purpose, of the compensatory amount shall be applied to difference between the reduced monetary the butter in question but in fact state compensatory amount granted at the that "that amount shall be multiplied by time of importation and the normal a coefficient". This amounts to stating monetary amount. This line of argument that the normal compensatory amount completely disregards the spirit and remains applicable and that it is to be objective of Regulations Nos 1259/72 reduced (provisionally) only through the

indicated by its terms. Since Corman amounts remain applicable after the maintains that neither Community law formalities for the importation of the nor national law provides legal grounds goods have been completed and the for recovery of monetary compensatory monetary compensatory amount has amounts in situations such as that in the actually been collected. However, since present case the question whether there in such cases the reduction is granted is a legal basis for such recovery must be purely because the person concerned viewed in entirely general terms, not undertakes to put the goods, which are merely within the restricted context of furthermore subject to control, to a Article 20 of Regulations Nos 1259/72 specific purpose it is clear that the

national law is irrelevant.

2 These questions were raised in the course of an action between the customs authorities of the Federal Republic of Germany and an importer of butter from Belgium concerning the application to that butter of the tariff provisions laid down in Article 20 of the above-mentioned Regulations Nos 1259/72 and 232/75.

CORMAN v HAUPTZOLLAMT AACHEN-SÜD

3 The German customs authorities first charged on the importations of that product, which was produced from butter from storage and intended for the manufacture of fine baker's wares and ice-cream in accordance with the provisions of Regulations Nos 1259/72 and 232/75 the reduced monetary compensatory amounts provided for in Article 20 of those regulations and subsequently, by a notice of corrective assessment, charged in respect of the importations a sum equal to the difference between those reduced amounts and the amounts normally applicable outside the system established by the said regulations.

4 In stating the reasons for the corrective assessment the German authorities claimed that, since the butter in question had not been put by the final user to the use prescribed in the above-mentioned regulations, it could not qualify for the reduced compensatory amounts fixed by the said article and that it became liable to the monetary compensatory amounts prescribed for butter freely marketable without restrictions as to its use.

5 The plaintiff in the main action objects inter alia that there is no legal basis for such corrective assessment since Community law, in particular Regu­ lations No 1259/72 and No 232/75, do not contain any independent provisions which authorize the subsequent recovery of the difference between the normal rate and the reduced rate of the compensatory amounts initially applied to the product where it is diverted from its destination laid down by law.

8 The first paragraph of Article 20 of Regulation No 1259/72 of the Commission provides that:

"The compensatory amounts applicable to butter, concentrated butter and concentrated butter with added sugar ..., for the part consisting of butter, shall be equal to the compensatory amounts fixed pursuant to Regulation (EEC) No 974/71, multiplied by a coefficient of 0.3".

Article 20 (1) (a) of Regulation No 232/75 of the Commission provides that

"When that part of the butter and concentrated butter specified in Article 6 (1) (a) and (b) which consists of butter is sold pursuant to this regulation:

(a) the compensatory amounts fixed pursuant to Regulation (EEC) No 974/71 shall be multiplied by the coefficient 0.5; however, in the case of the United Kingdom the coefficient shall be 0.8".

These provisions must be interpreted within the framework not only of the regulations of which they form part but also of the general rules governing the arrangements for monetary compensatory amounts.

12 It is in fact clear from those rules, in particular from Article 2 of that regu­ lation, that the fixing of monetary compensatory amounts is based inter alia on the prices of the products in question. The penultimate recital in the preamble to Regulation No 1259/72, which states that "as regards the compensatory amounts fixed pursuant to Council Regulation (EEC) No 974/71 of 12 May 1971 ... account should be taken of the value of the products concerned", clearly refers to the principle underlying that provision whereby compensatory amounts must be adjusted on the basis of the prices of the products in question, representing their market value.

13 It is in implementation of those rules that Article 20 of both Regulation No 1259/79 and of Regulation No 232/75 makes provision, with regard to the butter and concentrated butter referred to in Article 6 (1) of the regulations, for the application of a reduced monetary compensatory amount because, having regard to the restrictions on marketing to which that product is subject to its market value, and consequently its price, are proportionately reduced.

14 It is in accordance with the same principle for the competent customs auth­ orities to re-assess the reduced compensatory amounts if the products in

JUDGMENT OF 28. 6. 1979 — CASE 217/78

15 For these reasons the reply to the questions submitted must be that the definitive application of the reduced monetary compensatory amounts provided for by Article 20 of Regulation (EEC) No 1259/72 of the Commission of 16 June 1972 and in Article 20 of Regulation (EEC) No 232/75 of the Commission of 30 January 1975 pre-supposes that the goods in question, having regard in particular to the use to which they are to be put, have the reduced value attributed to them by virtue of those regulations. In so far as the importer has not furnished the proof, within the period pre­ scribed in Article 6 of the said regulations, that the goods have been put to the use to which the reduction of the compensatory amounts is subject, the legal basis for the subsequent re-assessment of such amounts is to be found in the general rules governing the system of monetary, compensatory amounts, as established by Regulation No 974/71 of the Council of 12 May 1971.

Costs

16 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings 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 national court, the decision on costs is a matter for that court.

CORMAN v HAUPTZOLLAMT AACHEN-SOD

On those grounds,

THE COURT (First Chamber),