C-135/79

HAUPTZOLLAMT [Principal Customs Office] HAMBURG-JONAS

on the validity of Article 2 of Council Regulation N o 5 1 6 / 7 7 of 14 M a r c h 1977 (Official Journal L 73, p. 1) on the c o m m o n organization of the market in products processed from fruit and vegetables,

THE COURT

composed of: H . Kutscher, President, A. O'Keeffe and A. Touffait (Presidents of Chambers), J. Mertens de Wilmars, P . Pescatore, G. Bosco and T . K o o p m a n s , Judges,

Advocate General : J.-P. W a r n e r Registrar: J. A. Pompe, D e p u t y Registrar

gives the following

The facts of the case, the procedure and account per 100 kg net weight falling the observations submitted under Article within subheading 20.07 B II (a) 1 of the 20 of the Protocol on the Statute of the Common Customs Tariff is exempt from Court of Justice of the EEC may be the levy. summarized as follows: Under the General Rule C.3 for the interpretation of the Common Customs I — F a c t s and w r i t t e n p r o c e d u r e Tariff (cf. Regulation No 950/68 in the version contained in Regulation No 2500/77, Official Journal 1977, L 289, p. (a) The regulations concerned 1) to which Article 13 (1) of Regulation Council Regulation No 516/77 of 14 No 516/77 refers the exchange rate to March 1977 (Official Journal L 73, p. 1) be used in converting the relevant on the common organization of the amount into the national currencies shall market in products processed from fruit be "that corresponding to the par value and vegetables makes provision for the communicated to and recognized by the imposition, in addition to a customs International Monetary Fund in respect duty, of an import levy in the of these currencies". The par value communicated at that time to the IMF Community on added sugar contained in by the Federal Republic of Germany was the products listed in Annex I thereto. In D M 3.66. Thirty units of account was order to prevent, in a simple fashion, the therefore equivalent to D M 109.80. application of the levy to products having a high concentration of natural sugar (as compared to added sugar) the This system was then amended from 1 Council exempted fruit juices having a January 1979 following the introduction value for customs purposes exceeding a by Council Regulation No 2779/78 specific amount from the levy (cf. Regu­ (Official Journal 1978, L 333, p. 5), of lation No 455/69 of the Council, the European unit of account ("basket" Official Journal, English Special Edition unit) into the Common Customs Tariff. 1969 (I), p. 103, which was repealed and replaced by Regulation No 516/77). This In order to assess whether the goods amount was fixed at 30 units of account imported are actually subject to the levy, per 100 kg net weight in regard to their yalue for customs purposes is orange juice falling within subheading calculated in accordance with the 20.07 B of the Common Customs Tariff. provisions of Regulation No 803/68 of Thus Article 2 of Regulation No 516/77 the Council on the valuation of goods in conjunction with Annex I thereto for customs purposes, applicable in this makes provision for a levy on orange case in the version contained in Regu­ juice having a value for customs purposes lation No 338/75 of the Council not exceeding 30 units of account per (Official Journal 1975, L 39, p. 5). 100 kg net weight. This product falls Article 12 of that regulation provides within subheading 20.07 B II (b) 1 of the that where factors used to determine the Common Customs Tariff. On the other value for customs purposes of goods are hand orange juice having a value for expressed in a currency other than that customs purposes exceeding 30 units of of the Member State where the valuation

In January 1978 the Gedelfi-Groß- By Article 2 and Annex I to Council einkauf imported into Germany four Regulation No 516/77 of 17 March consignments of orange juice from Israel. 1977 (Official Journal L 73, p. 1) in It declared those goods under sub- conjunction with Commission Regu- heading 20.07 B II (a): fruit juices of a lation No 2857/77 of 21 December 1977 specific gravity of 1.33 or less at 15° C (Official Journal L 329, p. 35), goods of a value exceeding 30 units of account falling within this subheading must be per 100 kg net weight, orange juice. On charged a levy. Furthermore these goods this basis and taking into account the are subject to the German tax on sugar. preference system, it calculated the customs duty which it owed at 5.7% and Therefore by a notice of corrective paid the corresponding sum. Since the assessment of 1 March 1978 the Haupt- declaration was made unter Article 40 zollamt Hamburg-Jonas demanded that (a) of the Zollgesetz (German Customs Gedelfi pay a levy of DM 23 672.59 and Law) the duties were paid subject to a sugar tax of DM 2 089.29. Gedelfi confirmation. lodged an objection against this notice on 10 March 1978. When it came to examine the customs declaration the Hauptzollamt Hamburg- It does not contend that the Haupt- Jonas came to the conclusion that the zollamt Hamburg-Jonas incorrectly goods had to be classified under sub- applied the provisions of the Common

GEDELFI ν HAUPTZOLLAMT HAMBURG-JONAS

It therefore May the national authorities or believes that the application of these courts themselves waive the charging provisions constitutes a discriminatory of the levy on the ground of the measure contrary to Articles 3 (d), 18, declaration of invalidity made by the 39, 40, 110 and 113 of the EEC Treaty. Court of Justice of the European Communities, or does this require an By a decision of 13 October 1978 the order by the competent legislature? Hauptzollamt Hamburg-Jonas dismissed the objection as unfounded. Gedelfi then 3. If the answer to Question 1 is in the brought an action before the Finanz

precepts and values of the legislature?" " 1 . Is Article 2 of Council Regulation (EEC) No 516/77 of 14 March 1977 in conjunction with Annex I thereto According to the grounds on which the and with Article 1 of Commission order containing the reference is based Regulation (EEC) No 2857/77 of 21 the Finanzgericht views the unequal December 1977 invalid in so far as it burden of taxation existing between the provides for a levy on products different Member States as a breach falling within tariff subheading 20.07 of the prohibition of discrimination Β II (b) 1 of the Common Customs contained in the second subparagraph of Tariff the value of which, on the Article 40 (3) of the EEC Treaty and basis of the rate of exchange laid furthermore as a breach of the genera! down in Rule 3 under Head C of principle of equality.

For

reasons based on the rule of law and for the sphere of tariff classification as in the practical reasons it is not possible to large parity fluctuations between the create equality by charging the levy sub- various currencies in relation to one sequently on imports into the other another, in particular of the German Member States. Another way of mark in relation to the dollar. resolving the matter would be for national authorities or courts to be given The Community institutions were aware the power in cases like this to waive the of this problem and had tried to amend charging of a duty without expressly the rules in such a way as to avoid declaring that the relevant provisions are distortions where customs duties are invalid whenever the charging of such a concerned. It recalls -the special rules duty resulted in a burden which is introduced for cheese by Regulation No contrary to the principle of equality. 656/75 (Official Journal 1975, L 72, p. 1) and for wine by Regulation No The order making the reference was 1167/76 (Official Journal 1976, L 135, p. registered at the Court on 21 August 42) which in customs matters gave 1979. binding force to the representative exchange rates in the agricultural sector In accordance with Article 20 of the ("green rates"). Protocol on the Statute of the Court of Justice of the EEC written observations Gedelfi thinks that the charging of the were lodged by Gedelfi Großeinkauf levy on the orange juice which it GmbH & Co., KG, the plaintiff in the imported into the Federal Republic of main action, represented by D. Ehle, Germany is illegal for several reasons. Advocate at the Cologne Bar, by the Council of the European Communities, represented by D. Vignes, Director in its The principle of the Common Customs Legal Department, acting as Agent, by Tariff and that of a common system for the Commission of the European charging a levy on a product coming Communities, represented by its Legal under an organization of the market Adviser, P. Gilsdorf and by M. Beschel, necessarily requires equality of treatment a member of its Legal Department, and therefore the charging of an acting as Agents. identical levy at any place at the external frontier of the Common Customs On hearing the report of the Judge- territory. Those essential requirements Rapporteur and the views of the arise from the principles of the customs Advocate General the Court decided to union (Articles 18, 110 and 113 of the open the oral procedure without any EEC Treaty), from the prohibition of preliminary inquiry. distortion of competition (Article 3 of the EEC Treaty), from the uniform application of the rules of the organ- izations of the markets in respect of II — S u m m a r y of the written imports from non-member countries o b s e r v a t i o n s l o d g e d at the (Articles 39, 40 and 43 of the EEC Court Treaty) and from the prohibition of distortion of competition in regard to intra-Community trade (Articles 9, 12 Question 1 and 30 of the EEC Treaty) : cf. judgment of the Court of 13 December 1973 in Gedelfi, the plaintiff in the main action, Joined Cases 37 and 38/73 Sociaal Fonds first of all observes that the specific voor Diamantarbeiders v Indiamex [1973] problem in the case lies not so much in ECR 1609.

Furthermore the charging of import value defeats that purpose. It is precisely duties in the Community which differ in the countries whose currencies are according to the place of importation is appreciating, as in Germany, that contrary to the prohibition of discrimi­ reference values expressed in units of nation contained in the second sub­ account have led to the charging of a paragraph of Article 40 (3) of the EEC levy even when the values of the goods Treaty. Because of the prohibition of were very high. discrimination a German importer of orange juice who imports the goods through Hamburg may not be made to pay a levy upon them since a French, Belgian or Dutch importer may import For those reasons the plaintiff in the the same goods at the same import price main action thinks that the provisions expressed in dollars through Marseille, referred to in Question 1 are no longer Antwerp or Amsterdam free of levy. This valid. principle applies particularly to products which come under a common organiz­ ation of the market as is the case with orange juice. It wonders however whether, after the replacement of the unit of account by the European unit of account (EUA), the Court has to give a judgment of such Moreover, the Community institutions extensive scope. It recalls the "equitable" were aware of the distortion of solution to the problem adopted in the competition which the continued judgment of 1 February 1978 (Case existence of General Rule C.3 in tariff 78/77 Liirs ν Hauptzollamt Hamburg- classification matters could entail after Jonas [1978] ECR 1969), which consisted the introduction of floating exchange in the application of a less burdensome rates in 1971. The fact that up to and rate of exchange for the party including 1978 this rule had not been concerned. Consequently it suggests that amended and the traditional unit of the answer in the present case should be account had subsisted constitutes a clear that when the reference value of 30 and unacceptable omission on the part of u.a./100 kg net weight is applied in the the Community legislature. This context of subheading 20.07 Β II natural omission is all the more evident in the justice requires that the reference value light of the delays in adopting the regu­ to be used is the one at which the goods lation to introduce the European unit of in question could be imported free of account (EUA). Application of the EUA levy at the relevant time, at the same in this case would have enabled the import price expressed in dollars, into orange juice to be imported free of levy. another Member State of the EEC.

The Commission explains that ever since The chances of finding a comprehensive the introduction of the unit of account, solution had been closely linked to the first under the Financial Regulation of efforts made to achieve world monetary 1960, and later in the course of the reform. In parallel with those attempts at framing of the Common Customs Tariff, international level to achieve reform, the reference value chosen was a specific from 1975 the Community legislature quantity of gold, namely 0.88867088 developed the concept of a "basket" gramme of fine gold. The advantage of unit. The area of application of this unit this unit of account was that it could was progressively enlarged with its correspond to fixed monetary parities adoption by: introduced under the Bretton Woods Agreement of 1944 concerning the Inter- — Council Decision of 21 May 1975 national Monetary Fund (IMF). (Official Journal L 104, p. 35) for financial aids provided for by the ACP-EEC Convention of Lomé; However, right from the beginning the Community legislature was faced with — Decision of the Board of Governors the problem that monetary policy itself is of 18 March 1975 for the European not governed by Community law. Investment Bank;

GEDELFI ν HAUPTZOLLAMT HAMBURG-JONAS

Community legislature failed to fix a The Commission puts forward three conversion rate in line with economic kinds of considerations to show that the reality or to make sure by some other Community legislature cannot be put at means that it was not possible for the fault. burden of taxation to vary according to the particular Member State into which goods were imported. First it maintains that the use of a unit of account is likely to have different legal consequences in .each Member State so The Commission admits that in principle long as no Community monetary policy discrimination within the meaning of exists and the currencies of Member Article 40 (3) of the EEC Treaty may States may to a large extent fluctuate result from an omission (cf. judgment of independently of Community criteria. In 19 October 1977 in Joined Cases 124/76 the meantime the attainment of equality and 20/77 Moulins Pont-à-Motisson ν of treatment in the narrow sense of the Office Interprofessionnel des Céréales term, in the acts of the Community, is [1977] ECR 1795. However it wonders whether Article 40 (3) has application to impossible. Reference to the "basket" this case. unit presently in force does not afford such a guarentee either.

JUDGMENT OF 3. 6. 1979 — CASE 135/79

GEDELFI ν HAUPTZOLLAMT HAMBURG-TONAS

JUDGMENT OF 3. 6. 1979 — CASE 135/79

If it is only a matter of difference in before the Finanzgericht Hamburg that revenue between a trader in Germany the charging of the levy was such a clear who has paid the levy and a trader in breach of Community law that it is not another Member State who has not paid necessary for the Court to give a pre­ it, it is doubtful whether this situation liminary ruling. If the Court is can be treated as real discrimination nevertheless asked to give a ruling it within the meaning of the Treaty. It is must be assumed from the practice of the more than probable that the importer has court so far regarding preliminary passed on the burden of the levy to the rulings that in its judgment it will consumers. Moreover the Community indicate a way of resolving this particular cannot be blamed for not having totally case which complies with Community rectified a discriminatory situation law. resulting from independent actions taken by Member States. In fact the margin of discrimination in question does not give rise to "discrimination capable of disturbing the market of the products in However Gedelfi thinks that, whereas question" (judgment of 13 November national courts are concerned, the 1978 in Case 87/78 Welding ν Haupt­ answer to the question lies in Article 177 zollamt Hamburg-Waltershof [1978] ECR of the EEC Treaty in so far as it gives 2457, paragraph 6, closing words). The those courts the power not to apply Council here refers to the rule de illegal provisions of Community law in minimis non curat praetor. any particular case. Once the court applied to is convinced that there can be no doubt about the illegality of the provisions in question, it may take corrective measures without making any reference to the Court of Justice. Such is Questions 2 and 3 the case here.

Mousson ν Office Interprofessionnel des gericht could then go ahead without any Céréales [1977] ECR 1795. new Community act and set aside the notice of corrective assessment challenged in the main action. In the Commission's view Question 3 is not very clear. Assuming that it is to be The Council regards Question 3 as understood as asking whether, even if having no point. However, in case the the Court of Justice should not decide intention was to ask whether the national that there has been a breach of the court must adopt an equitable solution, it principle of equality, the national auth- refers to the judgment in Case 78/77 orities could for reasons of natural Liihrs ν Hauptzollamt-Jonas [1978] ECR justice waive the charging of the levy in 169, paragraph 17. a particular case, then the question must be answered in the negative. In fact such an equitable measure "would alter the effect of the Community rules relating to III — Oral p r o c e d u r e the basis of assessment, the manner of imposition or the amount of the charge At the sitting on 11 March 1980 oral in question" and would therefore require arguments were presented on behalf on a legal basis in Community law (cf. the plaintiff in the main action, judgment of 28 June 1977 in Case represented by D. Ehle, Advocate at the 118/76 Balkan-Import-Export ν Haupt­ Cologne Bar, the Council of the zollamt Berlin-Packhof [1977] ECR European Communities, represented for 1177). There is no such basis in this case. the purposes of the oral procedure by B. Schloh and B. Laloux, members of its Legal Department, acting as Agents, and In regard to Question 2 the Council the Commission of the European thinks that if the Court declares Regu­ Communities, represented by its Legal lation No 516/77 to be void in regard to Adviser, P. Gilsdorf, acting as Agent. Article 2 thereof, the sums charged by the Hauptzollamt should be regarded as The Advocate General delivered his having been paid in error. The Finanz­ opinion at the sitting on 24 April 1980.

2 Those questions arose in the course of an action brought by a wholesaler against the dismissal by the Hauptzollamt (Principal Customs Office) Hamburg-Jonas of an objection. The objection was made against a notice of corrective assessment issued by the Hauptzollamt imposing a levy on the undertaking of D M 23 672.59 in regard to the importation of four consignments of orange juice from Israel. When those goods were imported the customs office followed the declaration submitted by the undertaking importing the goods classifying them under subheading 20.07 Β II (a) 1 of the Common Customs Tariff (“fruit juices, unfermented, not containing spirit, of a specific gravity of 1.33 or less at 15 °C, of a value exceeding 30 units of account per kg net weight, orange juice”). By notice of corrective assessment the Hauptzollamt classified the goods under subheading 20.07 Β II (b) 1 (aa) (“fruit juices, unfermented, not containing spirit, of a specific gravity of 1.33 or less at 15 °C, of a value of 30 units of account or less per 100 kg net weight, orange juice, with an added sugar content exceeding 30 % by weight”). The rate of customs duty is the same for both sub­ headings but the importation of products classified under the latter sub­ heading is in addition chargeable with a levy.

5 By Article 13 (1) of Regulation N o 516/77 the general rules for the interpre­ tation of the Common Customs Tariff shall apply to the tariff classification of the products covered by that regulation. At the time of the importation which gave rise to the dispute in the main action those general rules, applicable by virtue of Council Regulation No 2500/77 of 7 November 1977 amending Regulation N o 950/68 on the Common Customs Tariff (Official Journal L 289, p. 1) included in Section I.C general rules applicable both to nomenclature and to duties. Rule C.3 provided that the unit of account (u.a.), by reference to which the scope of certain subheadings is defined, has a value of 0.88867088 gramme of fine gold and that the exchange rate to be used in converting it into the currency of a Member State shall be that corresponding to the par value communicated to and recognized by the International Monetary Fund in respect of that currency.

6 On that basis the parties to the main action have agreed to take the amount of 30 units of account used as the line of demarcation between the two tariff subheadings in question as being equivalent to an amount of D M 109.80, one unit of account corresponding to D M 3.66.

7 In order to calculate the value of the imported orange juice, the Haupt- zollamt in its notice of corrective assessment decided that the factors determining this value were expressed in American dollars and thought that the rate of exchange to be used had to be the latest selling rate recorded on the most representative exchange market or markets of the Federal Republic of Germany in accordance with Article 12 of Council Regulation N o 803/68 of 27 June 1968 on the valuation of goods for customs purposes (Official Journal, English Special Edition 1968 (I), p. 170). At the time of the imports in question this rate was DM 2.10 to one American dollar. On that basis the value of the imported orange juice would be DM 103.64 per 100 kg net weight, in other words, less than the amount of D M 109.80 taken as being equivalent to 30 units of account.

" 1 . Is Article 2 of Council Regulation (EEC) N o 516/77 of 14 March 1977 in conjunction with Annex I thereto and with Article 1 of Commission Regulation (EEC) No 2857/77 of 21 December 1977 invalid in so far as it provides for a levy on products falling within tariff subheading 20.07 Β II (b) 1 of the Common Customs Tariff the value of which, on the basis of the rate of exchange laid down in Rule 3 under Head C of the General Rules contained in Section I of Part I of the annex to Regu­ lation (EEC) N o 950/68 of the Council on the Common Customs Tariff in the version of Council Regulation (EEC) N o 2500/77 of 7 November 1977, is 30 units of account or less per 100 kg net weight when the products are imported into the Federal Republic of Germany, if the value of the same products would be more than 30 units of account when imported into the other Member States, assuming the same import price on the basis of the dollar, so that it would not be necessary to charge a levy in the other Member States?

2. If the answer to Question 1 is in the affirmative: May the national authorities or courts themselves waive the charging of the levy on the ground of the declaration of invalidity made by the Court of Justice of the European Communities, or does this require an order by the competent legislature?

3. If the answer to Question 1 is in the negative: May the national authorities or courts in the case mentioned in Question 1 waive the charging of the levy on the ground that the imposition of a levy would lead to a violation of the principle of equality which would conflict with the precepts and values of the legislature?"

1 4 If therefore Regulation N o 516/77 lays down a fixed limit of value of 30 units of account per 100 kg for orange juice above which goods imported into the Community escape from the application of the levy, and if it lays down criteria to convert this amount into national currency, it is only in order to facilitate the controls and customs checks carried out at the frontiers of the Community.

15 These two factors should assist the Finanzgericht in overcoming the problems of the kind referred to in its first question.

JUDGMENT OF 3. 6. 1980 — CASE 135/79

16 If under a single trading system with non-member countries the importation of orange juice into certain Member States does not give rise to the charging of the levy provided for by Regulation No 516/77 because those products are taken to contain no added sugar, those same products cannot be deemed to contain added sugar and consequently be taxed for this reason on their importation into other Member States.

17 This conclusion is all the more compelling since it does not allow fortuitous currency fluctuations to occasion a tariff classification by the customs auth- orities of a Member State which is different from the one applied by the customs authorities of other Member States.

18 In these circumstances the argument that some orange juices might fall within a certain subheading of the Common Customs Tariff and thereby become subject to the charging of a levy in certain Member States, and fall within another subheading exempting them from the charging of that levy in other Member States, is unfounded.

22 The costs incurred by the Council and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since the 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.

On those grounds,

THE COURT

in answer to the questions referred to it by the Finanzgericht Hamburg by an order of that court of 20 July 1979, hereby rules:

1. Article 2 of Regulation No 516/77 in conjunction with Annex I to that regulation should be interpreted as meaning that a levy is not chargeable in respect of added sugar on the importation of orange juice into a Member State if it is established that the same orange juice is exempt from the levy in other Member States.

2. Consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Article 2 of Regulation No 516/77 as so interpreted.