C-68/79

In Case 6 8 / 7 9

R E F E R E N C E t o the court u n d e r Article 177 of the E E C T r e a t y by the Østre Landsret [Eastern Division of the H i g h C o u r t ] for a preliminary ruling in the action p e n d i n g before that c o u r t between

H A N S JUST I / S , an undertaking which p r o d u c e s a n d imports spirits, with registered offices in C o p e n h a g e n ,

and

T H E D A N I S H M I N I S T R Y FOR FISCAL AFFAIRS

JUST v MINISTRY FOR FISCAL AFFAIRS

Facts and Issues

The facts of the case, the procedure and aquavit (and schnapps) according to the observations submitted pursuant to Articles 3 and 4 of the Law if they are Article 20 of the Protocol on the Statute products manufactured from neutral of the Court of Justice of the EEC may alcohol with the addition of vegetable be summarized as follows: flavourings, have an alcoholic strength of at least 4 0 % but not exceeding 49.9% of the initial volume and a vegetable extract I — Facts and written p r o c e d u r e content not exceeding 2 grammes per The Danish legislation on excise duties 100 millilitres; they must not be in the on alcoholic beverages and related nature of gin, vodka, geneva, Wacholder products (the provisions currently in and other liqueurs, punch, bitters and force are to be found in Consolidated related beverages, aniseed spirit or rum, Law No 151 of 4 April 1978) provides spirits distilled from fruit and other for the levying of excise duty on alcohol, products whose typical taste is the rate of which varies according to traditionally produced through distil- whether it is applied on aquavit and lation or maturation. schnapps, to which a preferential rate applies, or on other spirits. According to Articles 3 and 4 of the From 7 September 1977, Law No 437 of Law, products are to be considered as 6 September 1977 increased the excise

JUDGMENT OF 27. 2. 1980 — CASE 68/79

JUST v MINISTRY FOR FISCAL AFFAIRS

constitute imported or domestic significance for deciding the question of products and within the two cate- the repayment of taxes, payment of gories of tax no distinction is drawn which was contrary to Article 95? In this on the basis of the origin of the connexion is it of any relevance that a products? trader can establish that he has suffered loss? Question IB The order of the Østre Landsret was Is it relevant to the answer to Question lodged at the Registry of the Court on 1A to establish that, in proportion to the 26 April 1979. cost price, the tax burdens the lower- taxed class of spirits ("aquavit and Written observations were submitted schnapps") to the same degree as the under Article 20 of the Protocol on the highly-taxed class of spirits ("other Statute of the Court of Justice of the spirits")? EEC on 29 June 1979 by the Com- mission of the European Communities, represented by its Legal Adviser, Question 2 Johannes Føns Buhl, on 19 July 1979 by Hans Just I/S, the plaintiff in the main If it is lawful to have different rates of action, represented by Peter Alsted, and tax, as mentioned in Question 1, does on 20 July 1979 by the Government of Community law establish requirements the Kingdom of Denmark, represented for the application of such rates to by Per Lachman, Head of the Secretariat imported products? of the Common Market Department of the Ministry for Foreign Affairs, assisted, (a) Must imported spirits be taxed at the on behalf of Poul Schmith, Government same rate as identical domestic Advocate, by Georg Lett, Advocate. products or those bearing the greatest similarity to such imported products? After hearing the report of the Judge- Rapporteur and the views of the (b) Must all imported spirits be taxed at Advocate General, the Court decided to the lower national rate although open the oral procedure without any "other spirits" of home origin are preliminary inquiry. taxed at the higher rate?

(b) Two facts support this : (d) Article 95 does not require global equal tax treatment for all spirits; it — Aquavit (or schnapps) represents, merely prohibits discrimination based on according to the applicant, approxi- the origin of the product. That mately two-thirds of the total domestic prohibition is an absolute one; according consumption of spirits in Denmark; to the case-law of the Court of Justice, 99 % of the total consumption of that especially the judgment of 10 October product is covered by domestic 1978 in the Hansen case, Case 148/77 production. [1978] ECR 1787, it does not, however, preclude the possibility of different treatment for tax purposes on grounds — The definition of aquavit (or other than the origin of the products. schnapps) shows that the distinction The present case is concerned only with drawn by the law between the various the question whether rules such as those types of spirits does not depend on any in force in Denmark give rise to dis- objective criterion,. The Danish auth- crimination based on the origin of the orities were unable to define aquavit (or goods and prohibited by the Treaty. schnapps) otherwise than by excluding by name a range of other products which The Court of Justice has always would otherwise have fulfilled the interpreted the rules in the Treaty definition. In this way an artificial prohibiting discrimination in the light of definition of the products subject to a their purpose, which is to guarantee a preferential rate' of duty has enabled a real, not purely formal, equality between range of products normally produced domestic and foreign products. Discrim- abroad to be excluded, to such an extent ination occurs not only when the that the preferential treatment applies national rules expressly rely on the origin only to a single product, 99% of which of the products as the distinguishing is produced within the national territory. criterion but also when, without openly having recourse to this prohibited criterion, they are drawn up in such a (c) It is true that the Danish legislation way as to have the same effect in does not use the origin of the product as practice. Discrimination in the field of a distinguishing criterion; it is clear the system of taxation on spirits cannot however that it uses criteria which be exempt from the scope of the obviously lead to the same result. That is prohibition purely because the national a clear attempt to circumvent the rules ensure equal treatment between

(g) It is also obvious that Danish The second paragraph of Article 95 is legislation has attempted over a number intended to ensure that the prohibition of years to protect domestic production against discrimination is applied as of aquavit (and schnapps). widely as possible, especially whenever the national rules do in fact result in tax discrimination linked to the origin of the goods. That would be so if the national (h) Regard must be had in this context rules contain detailed rules the effect of to the artificial distinction drawn which, from a purely practical point of between aquavit (or schnapps), on the view, is specifically to impose on foreign one hand, and other spirits, on the other. products a system of taxation which is For "other products" the law lays down less favourable than that accorded to both a condition regarding alcohol domestic products. Such a difference in content and a condition relating to taste, treatment may only be justified on the purpose being to distinguish products objective grounds having no relation to which, like aquavit (or schnapps), are the origin of the goods. The fact that the principally consumed at meal times, in products are similar or in competition such a way as to enable them to be with each other is an important part of treated more favourably than other the test whether the difference in spirits. The condition relating to the treatment is technical and objective. alcohol content referred to by the law — an ethyl alcohol content of between 4 0 % and 49.9% — like the taste criterion, appears to be wholly arbitrary in relation (e) The data on the place of origin of to the classification of the product in one the spirits consumed in Denmark by or other tax category.

The reply to the first question, point A, (Hansen) that there is no prohibition should be as follows: against maintaining several rates of internal taxation where there are special A national system of taxation applicable circumstances to justify this and that the to spirits which accords different lowest rate must be applied equally to treatment to groups of products in such domestic products and to imported a manner that a group of products which products of the same type. are manufactured principally in the Member State concerned is given tax advantages over another group of (c) In any case the duties should be the products which are manufactured prin- same for imported products and cipally abroad is contrary to Article 95 of domestic production within each fiscal the EEC Treaty unless objective category laid down by the law and, technical reasons may be shown which where necessary, endorsed by Com- justify that different tax burden, that is munity law. to say, reasons which do not depend on the usual origin of the product. It is all the more necessary to impose strict Third question conditions regarding such objective technical justification where a relatively greater proportion of the products (a) Article 95 prohibits any discrimi- subject to the lower rate is manufactured nation based on origin; the only in the country concerned. requirement it makes regarding the rates of tax is that they must not be discrimi- natory. An infringement of Article 95 First question, point B entitles the undertaking concerned to demand that the effects of the discrimi- This question is, according to Hans Just, nation be annulled; it is entitled to be a purely hypothetical one. placed in the position in which it would Even supposing that the Danish system have been if the discrimination had not of taxation is really a system of ad existed. It must therefore be treated as if, valorem duties it would still be possible since the date on which the infringement for it to result in disguised discrimination of the Treaty occurred, it was only contrary to Article 95. In any case the required to pay the lower of the two deciding factor is that many products rates of tax. with a manufacturing cost which is no higher than that of aquavit (or schnapps) are, apparently, subject to the higher rate (b) To reserve solely to importers the applicable to "other spirits". The Danish right to rely on Article 95 would lead to taxation system cannot therefore be the creation in Denmark of two new tax treated as an ad valorem tax system. categories in place of those which exist at present; it is clear in advance that such a distinction would be wholly Second question unreasonable. If domestic producers were unable to demand equality of (a) This question is irrelevant: the tax treatment in situations such as the discrimination applied pursuant to rules present one they would be exposed to such as those in force in Denmark is tax discrimination compared with contrary to Article 95. imported products; that would be a kind of "reverse discrimination" which is (b) It follows from the judgment of the contrary to the fundamental principles of Court of Justice in Case 148/77 the common market.

Fourth question sales not only caused a serious reduction in the profits of Hans Just but also compelled it to reduce its staff. (a) A claim for recovery of sums paid but not owed based on the incompatibility with Community law of As the Danish law stands at present a national tax rules should be decided, in claim for recovery has little chance of principle, on the basis of national rules; success if the charge which has been according to the case-law of the Court wrongfully levied may be presumed to of Justice this would only cease to apply have been passed on to the consumer. if the procedure and time-limits pre- scribed by domestic law make it The principles implied by Community impossible in practice to exercise the law do not exist in Danish legislation: of rights which national courts are under an course an undertaking may seek to assert obligation to protect. In that context its rights before the national courts but consideration must be given to the fact the absence of any legal foundation and that the principles of Danish law previous case-law may lead the latter to concerning the recovery of charges dismiss the claim. levied unlawfully are somewhat obscure and, in particular, to the uncertainty as to the requirements of Community law (d) In the absence of legal provisions on the subject regarding the legal and case-law on the subject it may be protection afforded to Danish citizens. assumed that in Danish law a complaint made before bringing an action does not, in itself, give the undertaking a wider right to repayment; the decisive point is (b) Under Danish law tax-payers therefore whether Community law cannot avoid paying taxes so long as a acknowledges the significance of the fact definitive judgment has not been that the collection of the charge was delivered; moreover, they have no claim contested, when the latter was levied whatsoever to the repayment of charges contrary to the provisions of Community which were paid in the mistaken belief law. that they had a tax liability in that respect. That is a legal situation which is quite unacceptable from the point of view of Community law. (e) The fact that the disputed Danish law has been in conflict with the Treaty since 1 January 1973, the date of Denmark's accession to the EEC, is (c) As to the question of proof, the irrevelant: the Court's objectivity cannot damage suffered as a result of the be influenced by the considerable collection of the disputed charge can economic consequences its decision may only be demonstrated indirectly. In that have for a Member State. connexion consideration should be given to the fact that the greater the price difference between two categories of (f) In view of the need to make product, the more difficult it becomes to Community law effective it seems proper sell the expensive product; it can also be to acknowledge in a case such as the established that the increase in the rates present one that the undertaking in of excise duty on 7 September 1977 question has an absolute right to caused a drop in sales of "spirits other recovery of the sums paid but not owed; than aquavit (or schnapps)". This drop in at the very least repayment should be

allowed which covers, in principle, the products as to domestic products it is not sums paid but not owed from the day on discriminatory because it is not based on which the national rules came into any criterion which makes importation conflict with Community law, or alter- more difficult or expensive. Foreign natively in any case from the date of the aquavit (or schnapps) is imported into complaint or the commencement of legal Denmark and is subject to duty at the proceedings. same rate as Danish aquavit; 'in the same way, other spirits produced in Denmark, which account for one-third of Danish consumption of such drinks, are taxed at (g) The reply to the fourth question the higher rate. should be as follows: Community law requires, or at least implies, that repayment of charges levied contrary to The current position of aquavit on the Article 95 is permitted under national Danish market is irrelevant to the present law. To protect the conditions laid down case; it cannot be the consequence of by the EEC Treaty it is not necessary discrimination, but is due to the fact that specifically to investigate whether the Danish consumers prefer Danish aquavit. party claiming repayment is able to establish that he has suffered actual damage, because the protection which Community law must give to the under- (b) As to the question of "similarity" takings concerned would be illusory if between various products, it should be national provisions could set aside the remembered that the first paragraph of rights which are guaranteed by the EEC Article 95 should not be understood as Treaty to those entitled thereunder. an abstract division of all groups of products, in such a way that Member States are obliged to observe fiscal The Government of the Kingdom of neutrality within each category of Denmark observes that the proceedings products which might be considered for a preliminary ruling are an extension similar. On the contrary, Member States of Case 171/78 (Commission of the may grant tax advantages by means of European Communities v Kingdom of exemptions or reduced taxes for certain Denmark) which is pending before the types of spirits or to certain classes of Court and it refers to a great extent to producers; the first paragraph of Article the pleadings submitted by it in that case. 95 merely requires that where there is different taxation domestic products and imported products should be treated First question, point A uniformly.

Indeed, spirits other than aquavit cannot in the Hansen case shows that that is a be considered as "products from other misconception. Thus there is no need to Member States", since a large quantity come to any conclusion based on the of spirits other than aquavit is also criteria which would apply if the law manufactured in Denmark; furthermore, were otherwise. Besides, a system such as aquavit and other spirits are not inter- this can only be the result of the har- changeable. Lastly, the difference in monization of the various national legal taxation does not imply that aquavit is systems and not of a decision of the being protected against other spirits; it Court. corresponds to the average difference in value between the various products. (b) As to point B of the third question, it should be borne in mind that Article (c) The first question, point A, should 95 solely concerns the question of the therefore be answered in the negative. treatment of imported products for tax

Fourth question Second question (a) This question is groundless: the The Court has held in the judgment in Danish system of taxation on spirits is the Hansen case that a preferential compatible with Community law. system applied on the national level must apply equally, without distinction, to spirits from other Member States which (b) In so far as it may be relevant it fulfil the same conditions as the domestic may be stated that although on the products; that is the case of the Danish Community level the question of the system concerning the taxation of spirits. right to repayment of charges which have been levied contrary to Community The reply to point (a) of the second law has not been settled either in the question should therefore be in the Treaty or by any provision of secondary

Pursuant to of tax to spirits; however, the judgment the principle of co-operation set out in

Article 5 of the Treaty it is for national if the Ministry for Fiscal Affairs were courts to ensure that protection, bound to repay it the difference between according to the procedure laid down the highest and the lowest rate of tax. under national rules. In particular the question whether the sums paid must be The test of "enrichment" constitutes the repaid and, if so, to what extent, lies cornerstone of the rules in Danish law within the jurisdiction of the national which govern the refund of taxes which courts. Community law does, however, have been paid in error or paid but not impose certain restrictions on the way in owed. No claim to recovery of such which national law regulates questions sums can lie unless the enrichment works concerning refunds. In the first place, the to the detriment of the party which paid procedure and time-limits laid down by the sum. It is not excessive in any way to national law must not make it impossible take into consideration the damage as a in practice to exercise the rights which condition for the application of a claim the national courts must protect: to a refund. Protection of the direct however, the prescribing of reasonable effect of Community law means safe- time-limits for claims in tax matters guarding the rights of citizens under constitutes an application of .the Community law, but not imposing fundamental principle of legal certainty. requirements in relation to national law In the second place, the procedural which would lead to a series of unjust requirements for bringing an action must enrichments. not be less favourable than those which apply to similar actions of a domestic nature. The reply to the last part of the fourth question should be that whether As regards, more particularly, the consideration should be given to the relationship with Article 95, it is also for criterion of damage depends on the the national courts to decide whether actual provisions of domestic law, in so internal taxation which is discriminatory far as there is no provision in within the meaning of Article 95 should Community law which prevents recourse be considered as wrongfully levied as a to such a test, as long as the manner in whole or only in part. which it is applied, in the context of judicial proceedings based on Com- munity law, is not less favourable than it (c) Since the provisions of national law would be in the context of actions based concerning refunds are to apply, subject on domestic law, provided that, more- to the requirements inherent in over, taking into account such a test Community law, the assessment of any does not have the effect of prejudicing damage comes within the jurisdiction of the protection which is afforded by the the national court. direct effect of Community law.

Points A and B, first question of taxation will admit of no exception; any other interpretation would prevent (a) The criteria which have been put Article 95 from guaranteeing and pre- forward in justification of the discrim- serving the transparency of the common inatory taxation cannot be considered in market and enforcing the principle of tax isolation. The lawfulness of discrimi- neutrality within the Community. natory taxation must be considered in the light of whether or not it influences Second question the consumer, in such a manner as to give a discriminatory advantage to (a) Article 95 applies to all internal similar domestically manufactured prod- taxation imposed on similar products ucts. which are imported from other Member

In the schnapps) on the one hand, and gin, case of products which are "similar", all vodka and geneva, on the other, rests imported spirits must therefore be subject solely in the flavouring employed; a to the lowest national rate, not- different flavouring alone is insufficient withstanding the fact that "other spirits" to cast doubt as to the similarity of the of national origin may be subject to a products. The same applies in respect higher rate. of alcoholic beverages obtained by distillation, such as cognac, whisky and spirits obtained from fruit; such products Third question can equally be considered as similar to aquavit. (a) The decisive test is that the taxation does not have a discriminatory effect on products which are imported from other (d) The purpose of Article 95, which Member States in favour of similar contains an absolute prohibition, is to domestic products. Article 95 implies in prevent the retention, once customs that respect only an obligation as to the duties and charges having an equivalent result; it does not indicate the tests effect have been abolished, of other which Member States must apply in trade barriers to the importation not order to fix internal taxation.

JUDGMENT OF 27. 2. 1980 — CASE 68/79

JUST v MINISTRY FOR FISCAL AFFAIRS

stands at present, there are no common I l l — Oral procedure provisions governing the repayment of charges levied by Member States Hans Just I/S, the plaintiff in the main contrary to the provisions of that article. action, represented by Peter Alsted, the Moreover, it follows from the provisions Government of the Kingdom of of the EEC Treaty that Member States Denmark, represented by Georg Lett, must provide the judicial protection and the Commission, represented by afforded to individuals by the direct Johannes Føns Buhl, presented oral effect of the provisions or Community argument and replied to the questions law and ensure that the disparities in this asked by the Court at the hearing on respect between the provisions of the 10 October 1979. Member States are not such as to give The Advocate General delivered his rise to distortions in or to damage the opinion at the hearing on 4 December functioning of the common market. 1979.

Decision

1 By order of 26 March 1979 which was received at the Court on 26 April 1979, the Østre „Landsret, Copenhagen, referred to the Court for a pre- liminary ruling under Article 177 of the EEC Treaty questions concerning the interpretation of Article 95 of the EEC Treaty, in order, first, to determine the compatibility with that provision of the tax difference created by the Danish Consolidated Law N o 151 of 4 April 1978 on excise duty on spirits and, secondly, in order to decide to what extent a tax-payer liable to pay charges levied contrary to Community law may claim the right to repayment of the charges levied.

s When Hans Just I/S submitted its tax return to the authorities it claimed that the duty levied on spirits other than aquavit could only be levied according to the rate applicable to the latter. The customs authorities informed the plaintiff that if the duty was not paid in full in accordance with the law, the duty payable would be collected by distress and the undertaking would be liable to be struck off the customs register. The plaintiff therefore paid the duty in full but under protest, and reserved the right to claim repayment of the difference between the two rates of tax. Subsequently it brought the action which is pending at this moment before the Østre Landsret, claiming that the tax on imported spirits other than aquavit at a higher rate than that applied to the latter is contrary to the provisions of Article 95 of the Treaty. It therefore claimed repayment of the sums which it considers it was liable to pay contrary to the provisions of Community law.

6 Bearing in mind that the Commission has brought against the Kingdom of Denmark an action, Case 171/78, for failure to fulfil its obligations under the EEC Treaty questioning the compatibility of the legislation in question with the Treaty, the national court decided to stay the proceedings and to

JUST v MINISTRY FOR FISCAL AFFAIRS

refer to the Court of Justice for a preliminary ruling a series of questions, the first three of which concern the compatibility with Article 95 of the tax system which forms the subject-matter of the dispute, whilst the fourth question relates to the possibility of repayment of the charges levied.

Question IB

Is it relevant to the answer to Question 1A to establish that, in proportion to the cost price, the tax burdens the lower-taxed class of spirits ("aquavit and schnapps") to the same degree as the highly-taxed class of spirits ("other spirits")?

Question 2

If it is lawful to have different rates of tax, as mentioned in Question 1, does Community law establish requirements for the application of such rates to imported products?

(a) Must imported spirits be taxed at the same rate as identical domestic products or those bearing the greatest similarity to such imported products?

(b) Must all imported spirits be taxed at the lower national rate although "other spirits" of home origin are taxed at the higher rate?

io The first question, referring to various features of Danish tax legislation, seeks a reply from the Court to the question whether such a tax system is compatible with the requirements of Community law. In its judgment in Case 171/78 the Court examined the. characteristics of that system and came to the conclusion that it discriminates against an indeterminate number of products which have been imported or which might be imported into Denmark and that, moreover, it is of such a nature as to afford protection to domestic production of aquavit.

1 1 However, the Court did not exclude the possibility, in principle, that national tax legislation might draw a distinction between various alcoholic beverages, it being understood, however, that such a distinction may not be used for the purposes of tax discrimination or in such a manner as to afford protection to domestic products. The Court found that the distinction made in the Danish

JUST v MINISTRY FOR FISCAL AFFAIRS

legislation between aquavit and all other alcoholic beverages was discrimi- natory and protective in nature.

12 The reply to the first question should therefore be that whilst the Treaty does not exclude, in principle a difference in the taxation of various alcoholic products, such a distinction may not be used for the purposes of tax discrim- ination or in such a manner as to afford protection, even indirect, to domestic production. A tax system which consists in conferring a tax advantage on a single product which represents the major proportion of domestic production to the exclusion of all other similar or competing imported products is incompatible with Community law.

Treaty. Article 95 accords such treatment only to products which are imported from other Member States.

R e p a y m e n t of t a x e s w h i c h have been levied contrary to C o m m u n i t y law ( Q u e s t i o n 4)

i7 The fourth question referred to the Court by the Østre Landsret is worded as follows:

If the matter is relevant, does Community law contain any rules of significance for deciding the question of the repayment of taxes, payment of which was contrary to Article 95? In this connexion is it of any relevance that a trader can establish that he has suffered loss?

JUST v MINISTRY FOR FISCAL AFFAIRS

charge may be required to show damage, the plaintiff points out that the bigger the difference in price between the two categories of products, the more difficult it is to sell the expensive product. In any case, the effect of the increase in the rates of duty on spirits on 7 September 1977 by Law No 437 of 6 September 1977 was to reduce sales of spirits other than aquavit: not only did this drop in sales entail a serious reduction in the undertaking's profits but it also compelled it to reduce its staff. A similar fall in sales of spirits other than aquavit affected the entire industry in Denmark.

JUDGMENT OF 27. 2. 1980 — CASE 68/79

22 A comparison of the national systems shows that the problem of disputing charges which have been unlawfully claimed or the refunding of charges paid but not owed is settled in the various Member States, and even within a single Member State, in different ways, according to the various kinds of taxes or charges in question. In certain cases objections or claims of this type are subject to specific procedural conditions and time-limits under the law with regard both to complaints submitted to the tax authorities and to legal proceedings. It was with a view to the operation of such remedies that, in its jugdments in the REWE and Comet cases of 16 December 1976 (Case 33 and Case 45/76, [1976] ECR 1989 and 2043 respectively) the Court held that it was compatible with Community law to lay down reasonable limitation periods in the interests of legal certainty which protects both the tax-payer and the administration concerned.

23 In other cases claims for repayment of charges which were paid but not owed must be brought before the ordinary courts, mainly in the form of claims for the refunding of sums paid but not owed. Such actions are available for varying lengths of time, in some cases for the limitation period laid down under the general law, with the result that Member States involved may be faced with a heavy accumulation of claims when certain national tax provisions have been found to be incompatible with the requirements of Community law.

24 The system applied in this connexion in the Kingdom of Denmark belongs to the latter group for, in that country, refunding of charges paid but not owed is sought in the ordinary courts by means of an action for recovery of the sums paid but not owed subject to a limitation period which is, in principle, five years. According to Danish law the courts take into account in such cases the fact that the charges which were paid but not owed were incor- porated in the price of the goods and passed on to subsequent stages in the economic chain; it also appears that those courts may take into consideration in deciding the amounts to be refunded any damage which may have been suffered by a tax-payer as a result of the incidence of unlawful taxation on his turnover.

26 It should be specified in this connexion that the protection of rights g u a r a n t e e d in the m a t t e r by C o m m u n i t y law does not require an o r d e r for the recovery of charges improperly m a d e to be granted in conditions which w o u l d involve the unjust enrichment of those entitled. T h e r e is nothing therefore, from the point of view of C o m m u n i t y law, t o prevent national courts from taking account in accordance with their national law of the fact that it has been possible for charges unduly levied t o be incorporated in the prices of the u n d e r t a k i n g liable for the charge and t o be passed o n t o the purchasers. It is equally compatible with the principles of C o m m u n i t y law for courts before which claims for recovery of repayments are b r o u g h t to take into consideration, in accordance with their national law, the d a m a g e which an importer m a y have suffered because the effect of the discriminatory or protective tax provisions was to restrict the volume of imports from o t h e r M e m b e r States.

THE COURT

in answer to the questions referred to it by the Østre Landsret by order of 26 March 1979, hereby rules:

1. Whilst the Treaty does not exclude, in principle a difference in the taxation of various alcoholic products, such a distinction may not be used for the purposes of tax discrimination or in such a manner as to afford protection, even indirect, to domestic production. A system which consists in conferring a tax advantage on a single product which represents the major proportion of domestic production to the exclusion of all other similar or competing imported products is incompatible with Community law.

2. Where a national system of taxation at different rates is found to be incompatible with Community law, the Member State in question must apply to imported products a rate of tax which eliminates the margin of discrimination or protection prohibited by the Treaty. Article 95 accords such treatment only to products which are imported from other Member States.

3. It is for the Member States to ensure the repayment of charges levied contrary to Article 95 in accordance with the provisions of their internal law subject to conditions which must not be less favourable than those relating to similar actions of a domestic nature and which

JUST v MINISTRY FOR FISCAL AFFAIRS

Mr President, of the EEC Treaty and, if so, to what Members of the Court, extent Hans Just I/S [Interessentskab, = partnership] is entitled to recover a sum The dispute which lies behind this paid in accordance with that law, reference for a preliminary ruling corresponding to the difference between concerns the question whether a the two taxes. .The first question is distinction made in the Danish Law on already the subject-matter of proceedings the Taxation of Spirits, etc. brought before the Court of Justice by (Lovbekendtgørelse) (Consolidation Act) the Commission of the European No 151 of 4 April 1978) between aquavit Communities against the Kingdom of and other spirits is at variance with the Denmark under Article 169 of the EEC first and second paragraphs of Article 95 Treaty for a declaration that it has failed I — Translated from the German.