C-5/82

JUDGMENT OF 15. 12. 1982 — CASE 5/»2

In Case 5/82

REFERENCE to the Court under Article 177 of the EEC Treaty by the Bundesfinanzhof [Federal Finance Court] for a preliminary ruling in the proceedings pending before that court between

HAUPTZOLLAMT [Principal Customs Office] KREFELD

and

MAIZENA GMBH, Hamburg,

Facts and Issues

I — Facts and procedure 1967, p. 33) provided for a system of refunds for maize used in the manu- facture of starch. Regulation No 120/67/EEC of the Council of 13 June 1967 on the common organization of the market in cereals In Article 1 (1) of Regulation No (Official Journal, English Special Edition 371/67/EEC of 25 July 1967 (Official

HAUFTZOLLAMT KREFELD v MAIZENA

Journal, English Special Edition 1967, German authorities continued for several p. 219) the Council provided that as years to calculate the refund on the basis from 1 July 1967 the Member States of the rates in force on the day of receipt were to grant a production refund on of the request for official supervision, as maize intended for the manufacture of required by a notice issued by the starch equal to the difference per 100 kg Federal Minister for Food, Agriculture between the threshold price of that and Forestry on 22 December 1967. product and 6.80 units of account. The lauer figure was the supply price of As has already been seen, the amount of maize guaranteed to Community producers of starch in order to ensure the refund corresponds to the difference their competitiveness in relation to between the threshold price and the competitors in non-member countries supply price of the cereal and it therefore and manufacturers of substitute products. varies in keeping with changes in those prices.

JUDGMENT OF IS. 12. 1912 — CASE 5/82

and not processed into starch by that finanzhofs question relates only to the date at the latest, the refund, fixed by effects of changes in the supply price). virtue of the first sentence of paragraph VII (2) of the notice of 22 December 1967 "on the basis of the rate in force on Maizena objected to that decision and, the day of the request for official after its objection had been rejected, supervision", was reduced by DM 51.24 commenced proceedings against the per tonne. That reduction corresponds Hauptzollamt before the Finanzgericht more or less to the reduction required to [Finance Court] Düsseldorf. The case achieve the refund laid down by the was brought on appeal before the Bundes- Community regulations from 1 August finanzhof, which by order of 24 1974. The notice dated 9 July 1974 also November 1981 referred the following provided, in paragraph 2, that the refund question to the Court of Justice: should initially take the form of an advance and that the right to a refund arose at the time of processing. How was the production refund to be calculated for maize which was placed under customs supervision before 1 August 1974 but was only afterwards In July 1974 Maizena received a refund processed into starch, within the time- of DM 144.39 per tonne for a quantity limit laid down for processing? of 63 172.11 tonnes of maize placed under customs supervision but not yet processed. It processed the maize after The order making the reference was 31 July 1974 within the time-limit of 90 lodged at the Registry of the Court of days provided for in Article 2 (3) of Justice on 7 January 1982. Regulation No 1060/68.

Maizena observes that the purpose of the provision in Regulation No 120/67 which provides for a system of Regulation No 1060/68 is concerned production refunds is, as the preamble only with the possibility of granting a thereto sutes, to ensure that manufac- refund advance and therefore does not turers of starch obtain the basic products contain a general restriction on the rights which they require at a lower price than previously granted by Regulations Nos would normally be the case. Similarly it 120 and 371/67. The rules which it lays is clear from the preamble to Regulation down are too specific to be applied No 371/67 that the purpose of Article 1 beyond the system of advance payments (1) thereof, which provides the method thereby created. In particular, the regu- of calculating the refund, is to bring lation should not be applied by analogy down the price of maize intended for to determine the amount of a production starch manufacture to 6.8o units of refund. account per 100 kg, in other words to fix a supply price. The indissoluble link with the process of supply is therefore established beyond a shadow of a doubt. Even if it were supposed that Regulation No 1060/68 applied generally to the calculation of a production refund, from its wording it would apply only to- a According to the whole corpus of change in the threshold price and not to provisions previously referred to, it is a change in the supply price. That would sufficient — as is logical in order to be logical in so far as, on the one hand, ensure supply of basic products at advan- the threshold price is subject to constant tageous prices — that the maize be change and, on the other, the intended for the manufacture of starch Commission has no power to make any for the right to a refund to arise which is modifications to the supply price, which both determined and quantified within has to be fixed by the Council, or to the the framework of the process of supply applicability of that price. of basic products. It is true that the maize must subsequently be processed into starch and that if this is not done there is no basis for a production refund, but the obligation to process the product The rule is therefore that the relevant has no effect on the level of the refund. time is the moment when the basic The relevant time is therefore that of the products are placed under official supply of the maize for the purpose of supervision and not the moment when producing starch. For reasons of they are processed. supervision, however, account is taken of the moment when the basic product arrives officially and its destination can be verified objectively, that is to say the moment when it is placed under official Maizena emphasizes that such a rule was supervision. introduced later by Regulation (EEC)

No 2012/74 of the Commission of 30 Maizena contends that to determine the July 1974 (Official Journal 1974, L 209, amount of the refund by reference to the p. 44), which is not relevant to the day of processing would be contrary to present case since it came into force after the meaning and intent of the refund 1 August 1974. system. The decisive moment for calcu- lating the refund should in fact be close to the moment of purchase of the basic Article 2 (1) of that regulation provides product if the principle of supply at a that the refund is payable provided that reasonable price, which is the purpose of the person concerned furnishes proof the refund, is to be respected.

There is no mention of changes in the supply price. It is evident from the preamble to Regu- lation No 367/67 that refunds for the The possibility of adjusting the amount manufacture of cereal starch and potato of the production refund in the case of a starch should be at the same level in view change in the supply price is memioned of the interchangeability of those two for the first time, as is emphasized by products. Maizena, in Regulation (EEC) No 10/75 of the Commission of 31 December 1974 Since the starch manufacturer pays to the (Official Journal 1975, L 1, p. 24). potato producer on delivery a price which includes the production refund, it follows that that refund, which can only With regard to that regulation, Maizena be the refund in force at the time of points out that it did not enter into force delivery, cannot be at the same level as until 1975 and does not, therefore, the refund for the manufacture of maize provide a proper legal basis for starch if the latter is calculated on the modifications and adjustments to the basis of rates in force at the time of production refund decided upon a processing. In the period in question the posteriori in 1974. It is clear, moreover, manufacturers of potato starch would that that regulation modified the pre- have had an advantage over the manu-

legal situation. EEC Treaty.

It follows from the corpus of provisions Finally, it points out that the Court has contained in that regulation that the interpreted Regulation No 2012/74 in its manufacturer receives only an advance decisions, in particular in its judgment on the day on which the basic product is of 12 July 1977 (Case 2/77 Hoffmann's placed under official supervision and that Stärkefabriken AG v HauptzoUamt the right to the refund does not arise Bielefeld [Í977] ECR 1375), to mean that until the day on which it is processed. In the amount of the refund should be those circumstances reference must be determined in accordance with the made to the supply price in force on the figures in force on the day when the day of processing. Changes in the supply basic product is placed under the official price are not expressly referred to in supervision of a Member Sute. Regulation No 1060/68 principally because, by comparison with the monthly variations in the threshold price, changes in the supply price are considered to be Regulation No 1060/68 — on the relatively rare. However, that does not assumption that it applies to the present imply that account should not be taken case — contains a similar provision so of such changes since under the rules for that the interpretation of the Court of Community production refunds the right Justice also applies to this case.

JUDGMENT OF 15. 12. I9H — CASE 5/8:

to a refund does not arise until the too therefore considered that the right to product is processed and consequently it a refund was not acquired once and for should clearly be determined on the basis all at the time when the product was of the supply price in force at that time. placed under supervision.

HAUPTZOLLAMT KREFELD v MAIZENA

at the threshold price valid for the month 1967 and Regulation No 1132/74 of the during which the product is placed under Council of 29 April 1974 and also Regu- supervision. If the producer cannot be lation No 1060/68 of the Commission certain that the refund will vary in of 24 July 1968 and Regulation No keeping with changes in the threshold 2012/74 of the Commission of 30 July price, on which he bases his commercial 1974, should be interpreted in such a decisions, a fortiori he will have no way that, in calculating the production certainty regarding the movement of the refund for maize starch, the increased supply price which alone guarantees the supply price laid down by Regulation No application to him of the principle of 1132/74, in force from 1 August 1974, equal treatment as regards competition. was to be taken into account even in relation to maize which was placed under official supervision before 1 The Commission sutes finally that, in August 1974 but was processed into relation to production refunds in this starch only afterwards, yet within the sector, there is no system for fixing them time-limit laid down." in advance, which means that the person claiming a refund is not sure how much it will be before his right to it actually arises. III — Oral procedure

On the basis of the considerations Maizena, represented by Werner referred to above the Commission Kleinmann of the Stuttgart Bar, and the submits that the following reply be given Commission of the European Com- to the questions referred to the Court by munities, represented by Jörn Sack, a the Bundesfinanzhof: member of its Legal Department, acting as Agent, presented oral argument at the sitting on 1 July 1982. "Article 11 of Regulation No 120/67 of the Council of 13 June 1967 on the common organization of the market in The Advocate General delivered his cereals, in conjunction with Regulation opinion at the sitting on 16 September No 371/67 of the Council of 25 July 1982.

5 That principle was put into effect for the first time by Regulation No 371/67 of the Council of 25 July 1967 fixing production refunds on starches and quellmehl (Official Journal, English Special Edition 1967, p. 219) and by Regulation No 1060/68 of the Commission of 24 July 1968 adopting certain detailed rules for the application of Regulations Nos 367/67 and 371/67 regarding production refunds on maize processed into groats and meal and on maize and common wheat processed into-starch and quellmehl (Official Journal, English Special Edition 1968 (II), p. 352). ArticleJ (1) of Regu- lation No 371/67 provided that the refund to be paid in respect of maize was to be equal to the difference per 100 kg of maize between the thresholdpnce and a guaranteed supply price of 6.80 units of account. According to Regu- lation No 1060/68 (Articles 1 and 2 (4)) a refund advance calculated by reference to the threshold price in force at the surt of the marketing year was to be paid not later than 30 days from the date on which the starch manufacturer requested it and furnished proof that the maize intended tor

HAUPTZOUAMT KREFELD v MAIZENA

the manufacture of starch had been placed under customs supervision, whereas the refund (Article 3) was to be calculated by reference to the threshold price in force when the maize was processed into starch and was to be paid within 30 days from the date on which the manufacturer furnished proof that the cereal had been processed. The system provided for in the regulations cited above applied until 31 July 1974 and was replaced with effect from 1 August 1974 by the system provided for in Regulations Nos 1132/74 and 2012/74.

JUDGMENT OF 15. 12. 1982 — CASE 5/82

occurring between the time when the maize was placed under supervision and the time when it was processed, it nevertheless follows from the corpus of provisions on the production refund for starch in force since 1967 that the refund was to be calculated on the basis of the rates valid on the day of processing. Unlike the threshold price, which changes monthly and in respect of which it was therefore necessary to make provision for adjustment, in Regulation No 2012/74 the supply price is fixed by the Council for an indefinite period and remains unchanged until the Council decides to alter it. In the absence of any express provision concerning the supply price to be used when calculating the refund, that price must obviously be determined by reference to the same date as that taken into account in determining the threshold price.

9 Maizena contended first that the inference to be drawn from the Court's judgment of 12 July 1977 (Case 2/77 Hoffmann's Stärkefabriken AG v Haupt- zollamt Bielefeld [1977] ECR 1375) was that the date which had to be taken into account in calculating the refund was necessarily the date at which the product was placed under customs supervision.

io However, in the passage of the judgment to which Maizena refers, the Court merely sutes that according to Article 2 (1) and (3) of Regulation No 2012/74 the production refund is to be paid and calculated at the moment when the person entitled thereto furnishes proof that the basic product has been placed under official supervision. Having regard to the reservation contained in the same article permitting adjustment of the refund, it is not possible to find in that passage any support for the view that the date of processing is not to be the date which determines the amount of the refund.

•5 As regards the supply price, it should be borne in mind that, as was rightly pointed out by the Commission, price fluctuations on the world market can be reflected in the Community rules only after some considerable delay. Consequently, to apply the supply price in force at the time at which the maize is processed, which is ex hypothesi higher than the supply price in force at the time at which it is placed under official supervision, does not cause unwarranted damage to Community producers of maize starch, but merely deprives them of an advantage which they would have if the refund were calculated by reference to a supply price which, even at the date at which the maize was placed under official supervision, did not correspond any longer to the actual prices on the world market.

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i6 Nor is it possible to accept Maizena's assertion that the interpretation adopted of the wording of the provisions in question leads to a difference in the treatment of producers of maize starch and producers of potato starch which is contrary to the principle of non-discrimination contained in the second subparagraph of Article 40 (3) of the EEC Treaty and is incompatible with the requirement, laid down in the preambles to Regulations Nos 120/67 and 371/67, that the maize-starch and potato-starch industries be given the opportunity of maintaining competitive prices as compared with the prices of substitute products and with the requirement, laid down in the third recital in the preamble to Regulation No 1132/74, that the refunds for maize starch and potato starch be fixed at the same level.

is Maizena also contended that in the light of the first recital in the preamble to Regulation No 371/67, which declares the need for the starch industry to keep its prices competitive with those for substitute products, the treatment accorded to starch may not be any less favourable than that accorded to a product such as saccharose which can be used instead of starch in the manu- facture of certain chemical products. Yet Regulation No 2478/74 of the Commission of 30 September 1974 (Official Journal 1974, L 264, p. 72), by extending the period of validity of refund certificates for saccharose for which applications had been lodged before 20 September 1974, enabled users of saccharose to obtain for a limited period a refund which had not been reduced despite the changes in the supply price of sugar which occurred at the end of 1974. According to Maizena, starch producers, on the other hand, would be the subject of discrimination contrary to Community law if they had to accept the consequences of a change in the supply price for maize.

HAUPTZOLLAMT KREFELD > MAIZENA

„ The Commission replied that it must not be forgotten that, punuamto Article 1 of Regulation No 2477/74 of the Council of 30 September 1974 (Official Journal 1974, L 264, p. 71), according to winch production refunds shall be fixed only if the total quantity of surplus sugar available for the Community chemical industry and the economic aspects of the proposed fixing are such as to justify such fixing", no further refund was granted tor saccharose for a long period from October 1974, whereas the starch refund was never made dependent either on the existence of a production surplus or on the amount of that surplus.

Costs

2s 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 proceedings are concerned, in the nature of a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (First Chamber),

in answer to the question submitted to it by the Bundesfinanzhof, by an order dated 24 November 1981, hereby rules:

Both under the Community rules in force until 31 July 1974 and under those in force after that date, the production refund for maize processed into starch must be equal to the difference between the threshold and supply prices applicable at the date at which the maize is processed.