C-222/78

WALTER BENEVENTI, Reggio Emilia,

together with

FEDERGROSSISTI (Federazione Nazionale Commercianti Alimentan) [National Food Trade Federation], Rome, intervener,

on the interpretation of Articles 33 to 44 inclusive of Regulation (EEC) No 3330/74 of the Council of 19 December 1974 on the common organization of the market in sugar (Official Journal 1974 L 359, p. 1) and of Articles 12 and 40 (3) of the EEC Treaty,

THE COURT

composed of: H. Kutscher, President, J. Mertens de Wilmars and Lord Mackenzie Stuart (Presidents of Chambers), A. M. Donner, P. Pescatore, M. Sørensen, A. O'Keeffe, G. Bosco and A. Touffait, Judges,

The facts, the course of the procedure the 1975/76 to 1979/80 marketing years, and the observations submitted under adaptation aid which may not exceed a Article 20 of the Protocol on the Statute total of 5.9 units of account per tonne of of the Court of Justice of the EEC may beet with a 15% sugar content processed be summarized as follows: into sugar. This maximum of 5.9 units of account was, for the 1976/77 marketing year, raised to 9.9 units of account, a I — Facts and procedure portion of which might be granted to the processing industry (Regulation (EEC) On 18 December 1967 the Council No 1487/76 of the Council of 22 June adopted Regulation No 1009/67/EEC 1976, Official Journal L 167, p. 9). on the common organization of the Order No 1195 adopted on 22 June market in sugar, which came into force 1968 by the Comitato Interministeriale on 1 July 1968; the regulation applied dei Prezzi [Interdepartmental Committee inter alia to white and raw beet sugar on Prices, hereinafter referred to as "the and cane sugar and also to sugar beet Price Committee" (Gazzetta Ufficiale and sugar cane. No 162 of 27 June 1968, p. 4057) established on the Italian market the Under Article 34 the Italian Republic is, up to and including the 1974/75 Cassa Conguaglio Zucchero [Sugar marketing year, authorized to grant Equalization Fund] financed in particular "adaptation subsidies to its beet growers by a sovrapprezzo [surcharge] on every and to its beet processing industry" — quantity and type of white sugar, that is to say, the sugar industry. The whether home-produced or imported. subsidy may not exceed a specified sum Paragraph 6 of the operative part of that per tonne of beet or per 100 kg of white measure provided that the income of the sugar; it may only be granted in respect Fund must be used to pay for: of a quantity which is within the basic — The subsidy to beet growers and the quota. With reference to this, the beet processing industry "pursuant to fourteenth recital in the preamble to the Article 34 of Regulation No 1009/­ said regulation states that "beet and 67"; sugar production in Italy is rendered — The subsidy to the processing difficult by climatic conditions and, in the case of beet production, by the industry in the form of the refund of additional problems presented by the application of modern production methods" and that "provision should be made for granting temporary subsidies to both these activities".

tax paid on the proceeds of the statement of the reasons on which that purchase and transport of beet; order was based points out the need: — The subsidy in respect of the storage "for the purposes of unification and costs of the surplus from the 1967/68 equalization of prices in respect of sugar harvest and "in respect of losses in in stock at midnight on 5 July 1978 to exporting it [surplus white sugar order payment to the Cassa Conguaglio produced during the 1967/68 sugar Zucchero of contributions calculated year] … which has to be exponed with regard to the differences between before 1 July 1969 (Regulation No the new national prices and those applied 457/68 of 11 April 1968)"; previously, subject to the amount of the increase in producer prices fixed at the — The subsidy to sugar undertakings in Community level for the 1978/1979 order to offset payments made by the marketing year, excluding denatured latter to beet growers in accordance with an earlier national measure; sugar intended for the feeding of cattle as well as the working stocks of the — Aid towards a financial reorgani­ consumer industries". zation in respect of the cost of The amount of the special charge was transactions carried out in the past by fixed at: the Equalization Fund in respect of the price of imported sugar; (a) Lit. 19.50 per kg net of white sugar, and it is due if the sovrapprezzo — A subsidy to exporters equivalent to ordinario [ordinary surcharge] of Lit. the amount of the surcharge referred 94 laid down for the previous to above; marketing year (1977/1978) has — Interest on debit balances for subsidy already been paid to the Cassa payments related to surplus output; Conguaglio. This amount represents the difference between the amount — Payment of the management expenses of the Fund. of the ordinary sovrapprezzo laid down for the current marketing year (Lit. 113.50) and that of the previous The so-called ordinary sovrapprezzo was marketing year (Lit. 94). fixed at Lit. 56 per kg for the marketing year 1975/1976 (Price Committee Order (b) — Lit. 21 per kg net of white sugar, No 14/1975 of 1 July 1975) and payable by wholesalers and increased to Lit. 70 per kg for the 1976/­ importers; 1977 marketing year (Price Committee — Lit. 14 per kg net of white sugar, Order No 20/1976 of 1 July 1976), to payable by retailers. Lit. 94 per kg for the 1977/1978 The Italian authorities levied these marketing year (Price Committee Order amounts on the proportion of the No 37/1977 of 26 July 1977) and to Lit. price corresponding to the gross 113.50 per kg for the current marketing profit resulting from the difference year (Price Committee Order No between the maximum selling price 15/1978 of 4 July 1978, Gazzetta at the wholesale or import stage and Ufficiale No 187 of 6 July 1978, p. 4853). The special charge which forms the subject-matter of the action pending before the national court — levied una tantum on stocks existing at the time of the change-over from one marketing year to the next — was introduced by Order No 15/1978, cited above. The

the maximum price at the retail stage Emilia asked the Court of Justice for a in Italy in 1977/1978 and 1978/­ preliminary ruling on the following 1979. questions: 1. In the light of the judgments of the By a writ of 11 September 1978 I.C.A.P. Court of Justice in Case 23/75 (Rey Distribution s.r.l., San Maurizio, brought Soda) and in Case 77/76 (Cucchi v proceedings before the Pretore of Avez), must the provisions contained Reggio Emilia against Walter Beneventi's in Articles 33 to 44 of Regulation undertaking Nuova Commissionaria (EEC) No 3330/74 concerning sugar Zuccheri, having its principal place of be interpreted in such a way that the business in Reggio Emilia, claiming that imposition by the government of a it should be ordered to pay the sum of Member State on sugar held in stock Lit. 252 000 by way of reimbursement of on its territory on 5 July 1978 of a the charge of Lit. 21 per kg of sugar pecuniary charge according to the imposed by Price Committee Order No following criteria: 15/78 on all stocks of sugar in Italy as (a) it is imposed by a measure of the from 5 July 1978. national government although it As appears from the writ, I.C.A.P. had was not authorized by the delivered 120 quintals of imported Community institutions; French sugar to the Walter Beneventi (b) it is imposed with immediate undertaking, the defendant, after the effect upon sugar held in stock by entry into force of Order No 15/78 and commercial undertakings and for this reason the special charge consequently has retroactive effect provided for by the order should have in that it does not allow the under­ been applied to that quantity. Since, takings to choose between buying however, the goods had been bought by sugar with the consequent Beneventi before the entry into force of imposition of the charge and not the order, I.C.A.P. sought payment of an buying sugar with the consequent amount corresponding to the charge due exemption from the charge; on the stocks as the storage on its (c) it is imposed at the change-over premises had been carried out on behalf from one marketing year to the of Beneventi, the defendant undertaking. After entering an appearance, Beneventi, the defendant undertaking, did not dispute the facts alleged by the plaintiff, but submitted that it could make no payment of an amount of Lit. 252 000 with reference to the special charge provided for by Order No 15/78 since that claim was based on a provision which was illegal under Community law. Consequently the defendant submitted that Order No 15/78 was to be regarded as illegal on the basis of the case-law of the Court of Justice as laid down in the judgments in Cases 23/75 Rey Soda and 77/76 Cucchi v Avez.

next, in the absence of the charge on stocks of sugar whether grounds mentioned in Article 33 home-produced or imported, which of Regulation No 3330/74 which are in their hands (and to claim the justify recourse to the provisions reimbursement of any payment made) to be adopted in accordance with or is such individual right not to pay the procedure laid down in Article (and to claim the reimbursement of 36 of that regulation, any payment made) limited to must be regarded as improper and quantities of sugar imported from Member States of the EEC and prohibited and that it must be held that the Community institutions alone stocked by the directly importing are competent with regard to sugar? undertakings or by other undertakings which have purchased it from the 2. Must the provision contained in the latter? second subparagraph of Article 40 (3) of the Treaty of Rome concerning the In accordance with Article 20 of the prohibition on discrimination be Protocol on the Statute of the Court of interpreted in such a way that a Justice of the EEC, written observations national charge on sugar imposed were submitted by the defendant and the according to the criteria set out above intervener in the main action, by the in Question 1 is to be considered Italian Government and by the improper and prohibited in that it is Commission of the European not imposed solely when the sugar is Communities. held by national industrial producers, On hearing the report of the Judge-Rap­ which enjoy a complete and exclusive porteur and the views of the Advocate exemption from payment thereof General, the Court decided to open the (whilst all other traders are liable to oral procedure without any preparatory the said charge, albeit to varying inquiry. degrees) ? 3. Must the provision contained in Article 12 of that Treaty, concerning II — Summary of the written the prohibition on the introduction of observations submitted to charges having an effect equivalent to the Court customs duties, be interpreted in such a way that the charge described above (a) Observations of the defendant and the in Questions 1 and 2 is to be intervener in the main action considered improper and prohibited in that, with regard to the origin of the First of all it is pointed out that in 1978 the Italian Government asked the sugar, it is imposed exclusively on sugar produced in the Community Commission for application of Article 33 which is present in Italy on 5 July of Regulation No 3330/74 relating to 1978 and on the other hand is not the measures to be adopted in the event imposed on home-produced sugar of disturbances on the sugar market. The held in stock by national industrial Commission replied with a reasoned producers on that date? refusal, but the Italian Government adopted Price Committee Order No 4. Have the Community provisions 15/78 in spite of the protests of the mentioned above in Questions 1, 2 classes of persons affected. and 3 conferred upon the under­ takings liable — under national Question 1 legislation — to pay the pecuniary charge mentioned above the As to Question 1, the defendant and the individual right not to pay such intervener allege that after the judgment

in Case 77/76 Cucchi v Avez [1977] The charge provided for by Order No ECR 987, for 1977 the Italian 15/78 seriously affected, to the extent of Government considered it expedient 50%, the increase laid down at formally to amend the statements of the Community level. reasons on which the measures for The sugar imponer cannot be identified disposal of stocks were based with the with the normal wholesaler operating at aim of giving the impression that the the stage of the sale of the product to a provisions in question exclusively retailer. He is rather the alter ego of the concerned the national components of Community producer, and thus he is on Price Committee price formation without the same level of competitive equality as however affecting the increases other Italian industrialists manufacturing established at Community level. the same product. However, the very fact that the Italian Since he has the same clientèle as Italian Government considered it necessary to ask the Commission to apply Article 33 sugar producers, that is to say above all of Regulation No 3330/74 shows in sugar-consuming undertakings and itself that the Italian Government does national sugar wholesalers spread not possess any legal power from the throughout Italy, it is clear that the imponer will have to charge his Community point of view to apply a customers at least the same prices as charge to stocks of sugar in the absence those which are charged by his industrial of express authorization by the Commission. competitor, the Italian sugar producer. It would be absurd to imagine that an Comparison of the price components for Italian sugar consumer or a normal 1977 with those of 1978 shows that in wholesaler could obtain his supplies of 1978 no increase occurred as regards the sugar from an Italian imponer if he had national components (except an to pay the producer price plus the gross imperceptible increase in costs, for profit margin (Lit. 21.30). example for paper bags). The only In conclusion, the defendant and the increase was that which was established intervener refer to paragraphs 33 and 34 at Community level, and was due to the of the decision in Case 77/76 Cucchi v devaluation of the green lira. It is a Avez [1977] ECR at p. 1009. question of an upwards difference of Lit. 45.35 per kg net of sugar which the Question 2 Community allowed any Italian trader who on 30 June 1978 held quantities of Price Committee Order No 15/78 sugar in stock in his warehouse. contains a complicated network of Consequently, Italy has no power to different treatments for various classes of limit that increase by allocating part to other persons, for example the Sugar Equalization Fund. Since now the "subsequent charge" (which in the Cucchi v Avez case was referred to as the "sovrapprezzo stra­ ordinario" or "special surcharge") is fixed at Lit. 21 per kg as regards impor­ tation of sugar from EEC countries (see Article 7 of Order No 15/78), it is clear that that sum must be deducted from the increase laid down by the Community provisions thus limiting the amount of the latter.

77/76 Cucchi v Avez, cited above. If on the other hand it were held that the

The resemblance lies in the nature of the principle of non-discrimination referred to in the second subparagraph of Article charge to tax; the specific new factor lies 40 (3) of the Treaty had been breached, in the fact that an interpretation of the appropriate solution might be Article 9 of the Treaty has been sought different again, according to the Court's in relation to a particular characteristic judgment in Joined Cases 124/76 and of the charge, namely that it applies to all imported sugar whereas on the other hand it applies only to a part of home­ produced sugar (sugar held in stock by producers is excluded). After a critical examination of the case-law of the Court (Case 77/72 Capolongo [1973] ECR 611; Case 94/74 1GAV [1975] ECR 699; Case 77/76 Cucchi v Avez, cited above) the defendant and the intervener submit that that case-law should be followed.

I.C.A.P. v BENEVENTI

JUDGMENT OF 28. 3. 1979 — CASE 222/78

I.C.A.P. v BENEVENTI

JUDGMENT OF 28. 3. 1979 — CASE 222/78

States acting outside the organization of Question 4 the market. Measures of this latter kind are to be assessed in relation to the Hence this question is purposeless. specific provisions of the Treaty directed to the Member States, which also III — Oral procedure prohibit discrimination (Articles 12 et seq., 30 et seq. and 95). At the hearing on 6 March 1979, the defendant and the intervener in the main Question 3 action, represented by G. M. Ubertazzi and F. Capelli, the Government of the A charge cannot fall simultaneously Italian Republic, represented by I. M. under the prohibition laid down in Braguglia, Avvocato dello Stato, and the Articles 9 and 13 on the one hand and Commission of the European under the prohibition laid down in Communities, represented by its Agent, Article 95 on the other. C. Maestripieri, submitted oral Having regard to its answer to Question argument.

1, the Commission proposes that this The Advocate General delivered his question should be answered in the opinion at the hearing on 13 March negative. 1979.

Decision

1 By an order of 14 September 1978 which was received at the Court on 2 October 1978, the Pretore of Reggio Emilia referred to the Court of Justice under Article 177 of the EEC Treaty four preliminary questions concerning the interpretation of certain Community provisions.

2 These questions are raised in the context of a dispute over the legality of contributions to the Cassa Conguaglio Zucchero [Sugar Equalization Fund] imposed under Order No 15/1978 of the Comitato Interministeriale dei Prezzi [Interdepartmental Committee on Prices, hereinafter referred to as "the Price Committee"] of 4 July 1978 (Gazzetta Ufficiale No 187, p. 4853).

(c) it is imposed at the change-over from one marketing year to the next, in the absence of the grounds mentioned in Article 33 of Regu­ lation No 3330/74 which justify recourse to the provisions to be adopted in accordance with the procedure laid down in Article 36 of that regulation,

must be regarded as improper and prohibited and that it must be held that the Community institutions alone are competent with regard to sugar?

2. Must the provision contained in the second subparagraph of Article 40 (3) of the Treaty of Rome concerning the prohibition on discrimination be interpreted in such a way that a national charge on sugar imposed according to the criteria set out above in Question 1 is to be considered improper and prohibited in that it is not imposed solely when the sugar is held by national industrial producers, which enjoy a complete and exclusive exemption from payment thereof (whilst all other traders are liable to the said charge, albeit to varying degrees)?

3. Must the provision contained in Article 12 of that Treaty, concerning the prohibition on the introduction of charges having an effect equivalent to customs duties, be interpreted in such a way that the charge described

JUDGMENT OF 28. 3. 1979 — CASE 222/78

above in Questions 1 and 2 is to be considered improper and prohibited in that, with regard to the origin of the sugar, it is imposed exclusively on sugar produced in the Community which is present in Italy on 5 July 1978 and on the other hand is not imposed on home-produced sugar held in stock by national industrial producers on that date?

I.C.A.P. v BENEVENTI

7 According to the Italian Government and the Commission, the order only provided for a charge to be paid on stocks on 5 July 1978 and calculated exclusively on the basis of the differences between the new national prices and those previously in force "with the exception of the amount of the increase in producer prices laid down at Community level for the 1978/1979 marketing year".

8 It was also submitted that the order was restricted to the distribution and consumption stages and avoided reference to sugar held in stock by producers precisely so as not to affect in any way the machinery of price formation resulting from the operation of Community rules.

9 On the other hand, according to the defendant and the intervener in the main action, the increases in national prices referred to in the order are closely connected with the increases in Community prices, so that in fact the charge imposed constitutes a measure involving intervention.

10 Within the frame-work of the procedure under Article 177, it is not for the Court to apply the Community rules which it has interpreted to national measures or situations.

11 On the other hand it is incumbent upon the national courts to decide whether or not the Community rule as interpreted by the Court under Article 177 applies to the facts and measures which are brought before them for their assessment.

17 Even if it were within the ambit of Article 40, a measure which, as regards price formation, distinguished between the production stage and subsequent stages of marketing would not by virtue of that fact alone be discriminatory within the meaning of that article.

18 The position might be different if it were established that imponed sugar was or was not subject to charges according only to whether it was held in stock by producers or on the other hand by other traders.

19 However, the question does not contain any information on this point, whilst the wording of Question 3 indicates that that is not the situation referred to.

20 The question is therefore too general to lend itself to a suitable reply.

21 As to Question 3, it seeks to obtain clarification of the ruling which the Court laid down in its aforesaid judgment of 25 May 1977.

22 Paragraph 1 of the operative part of that judgment is in the following terms:

27 As to Question 4, the answer depends primarily upon a consideration of the wording and the rules for the implementation of the measure at issue and upon an assessment of those two factors within the framework of the national legal system.

JUDGMENT OF 28. 3. 1979 — CASE 222/78

28 The question therefore raises a problem of the application rather than a question of the interpretation of Community law.

29 In these circumstances, the answer must be confined to mere repetition of the last sentence of paragraph 2, of the operative part of the judgment of 25 May 1977 cited above.

Costs

30 The costs incurred by the Government of the Italian Republic and by the Commission of the European Communities, which have submitted obser­ vations to the Court, are not recoverable.

2. A duty falling within a general system of internal taxation applying to domestic products as well as to imported products according to the same criteria can constitute a charge having an effect equivalent to a customs duty on imports only if it has the sole purpose of financing activities for the specific advantage of the taxed domestic product, if the taxed product and the domestic product benefiting from it are the same, and if the charges imposed on the domestic product are made good in full.

Kutscher Mertens de Wilmars Mackenzie Stuart Donner Pescatore

Sørensen O'Keeffe Bosco Touffait

Delivered in open court in Luxembourg on 28 March 1979.

A. Van Houtte H. Kutscher

Registrar President