C-210/87

2. The 'day of importation' referred to in that provision was interpreted in the judgment of 15 June 1976 in the Frecassetti case as being 'the day on which the import 5. Those questions in fact constitute the declaration for the goods is accepted by the latest episode in a long legal battle before customs authorities.' 2 the courts in which Italian cereal importers who enjoyed the most favourable rate are engaged in resisting the recovery of the additional amounts which the judgment in the Frecassetti case seems to justify. In order clearly to appreciate the ramifications of the 3. That interpretation overturned an estab­ decision which the Court will give, it seems lished practice of the Italian authorities of to me important to recall the stages of the applying, as in customs duties matters, the legal argument which has been taking place most favourable rate of levy so long as the before 'the Court pursuant to a series of goods had not been made available to the references made over the past 10 years. importer and providing that the latter requested it. Since the judgment highlighted the insufficiency from the point of view of Community law of agricultural levies charged in accordance with that practice, the Italian authorities took steps to recover additional amounts in relation to past imports. 6. An initial argument calculated to frustrate an action for recovery was that the interpretation set out in the Frecassetti * Translated from the French. judgment could have effect only in the 1 — OJ, English Special Edition 1967, p. 33. 2 — Case 113/75 Frecassetti v Amministrazione dello finanze future, that is to say for imports subsequent dello Stato [1976] ECR 983, at p. 993, paragraph 7. to the publication of the judgment and

8. In the same judgment the Court defined the circumstances in which the national legislature could adjust or restrict the effects 11. That interpretation was to lead the of a Community provision interpreted Italian courts, in cases relating to additional pursuant to Article 177 such as those the amounts of levies, to disregard the aforesaid Court had just described. presidential decree of 22 September 1978, which restricted the authorities' powers of 3 — Joined Cases 66, 127 and 128/79 Amministrazione delle finanze delto Stato v Srl Meridionale Industria Salumi [1980] ECR 1237, at p. 1260, paragraph 9. 4 — Ibid., at p. 1264, paragraph 21.

PADOVANI AND OTHERS v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

13. That regulation substituted for the legal situation described in the judgment in Salumi (No 1), in which reference was made to the national legislature for the determi­ 'the provisions of the regulation may not be nation of rules of procedure and substance accorded retroactive effect unless sufficient relating to the recovery of agricultural clear indications lead to such a conclusion', levies, a new legal method for determining at the Community level some of those rules in a context wider than that relating to levies only. With regard to the questions which now concern us, it is to be observed and that in that case that the regulation restricts in particular cases the power of post-clearance recovery of import or export duties. Thus no action may be initiated after the expiry of a period of three years or where the original amount was calculated on the basis of information 'far from indicating any retroactive effect, which was provided by the competent auth­ both the wording and the general scheme of orities themselves and which binds them. the regulation lead to the conclusion that The competent authorities may not recover the regulation provides only for the post-clearance where the original failure to future'. 8 charge the full levy was due to their own mistake which was not apparent to the 6 — Joined Cases 212 io 217/80 Amministrazione delle finanze taxpayer acting in good faith. dello Stalo v Sri Meridionale Industria Salumi and Others [1981] ECR 2735. 7 — Paragraph 8. 5 — OJ L 197, 3.8.1979, p. 1. 8 — Paragraph 12.

OPINION OF M. DARMON — CASE 210/87

16. Since the Community rules on post- clearance recovery were not retroactive, 18. The questions from the national court they could not govern levies charged prior are therefore essentially as follows: does to the judgment in Frecassetti, which Community law prevent post-clearance therefore remained subject to the legal rules recovery from traders who have acted in described in the judgment in Salumi (No 1), good faith but who were the subject of the that is to say the procedural and substantive administration's wrong practice, when the rules provided for by the national legis­ mode of recovery depends on national law lation. Faced with that situation, the traders which in such a case does not protect the concerned claimed before the Venice court traders owing the levies? that the national law was subject to observance of the 'principle of certainty and 10 protection of legitimate expectations' that was enshrined in Community law and was of general scope going beyond the specific provisions of Regulation No 1597/79 and 19. The principle of the protection of that that principle prevented recovery. In legitimate expectations, which is connected order to determine the validity of that with the more general principle of legal argument, the tribunale civile e penale has certainty, undoubtedly forms 'part of the referred two questions to this Court for a Community legal order', as was expressly preliminary ruling. stated in the judgment of 3 May 1978 in the 11 Töpfer case. The desire to achieve a balance between the requirements of law and considerations of equity is apparent in the decisions of the Court, subject to various qualifications. If regard is had to the 17. The search for principles in Community specific way in which that desire is law which prevent actions for the post- expressed in the principle of the protection clearance recovery of agricultural levies is of legitimate expectations, it may be prompted by the fact that in Italian observed that it was first applied in cases domestic law no such principles are applied. calling in question in particular the legis­ The only protection which it affords traders lative action of the Community institutions who have not been charged a sufficient levy themselves. For instance, the Court has is a five-year limitation period. Within that recognized that the absence in Community period the trader's good faith is not speci­ legislation of transitional measures to protect the legitimate expectations of traders 9 — Paragraph 16. 10 — Fifth paragraph of the request for a preliminary ruling from the tribunale civile e penale, Venice. 11 — Case 112/77 [1978] ECR 1019.

20. However, in the case now before the Nor, in the present case does it conflict with Court, it is not so much the effect of the a special Community provision applicable to 16 principle of legitimate expectations in the the matter precisely in question. The Community system which has to be Court was led by similar considerations in examined as its relationship to national law. the judgment of 21 September 1983 in the It is in that area that the questions which case of Deutsche Milchkontor GmbH and 17 have been put to the Court lie. The traders, Others v Federal Republic of Germany. the plaintiffs in the main proceedings, have That time it was a question of wrongly-paid cited in particular the judgment of 5 March aids for skimmed-milk powder and the 14 1980 in the Ferwerda case in support of Court held that their argument that the principle of the protection of legitimate expectations prevents post-clearance recovery of Community levies although it is carried out 'the principles of the protection of legitimate according to modes defined by national law, expectation and assurance of legal certainty which provides no such protection. The are part of the legal order of the Ferwerda case concerned preliminary Community' questions arising from disputes relating to export refunds wrongly granted and paid following the wrong application of a Community regulation, that is to say a and that situation presenting some analogy to the present case. The point about that judgment on which the plaintiffs in the main proceedings rely is that the Court found 'the fact that national legislation provides that for the same principles tobe observed in a matter such as the recovery of unduly paid Community aids cannot, therefore, be considered contrary to that same legal 8 order'. 1

rules laid down by national law. However, After setting out the principles stated in the it is clear that the judgments of the Court aforementioned judgment in the Ferwerda are concerned with the question whether case he observed: Community law prevents national law from applying principles of legal certainty and legitimate expectations so as to prevent recovery from traders who have acted in good faith. The question now before the 'I have not come across any decisions Court is whether Community law requires dealing with the question whether an unrea­ the authorities of Member States responsible sonably strict approach to recovery by a for collecting agricultural levies according Member State may fall foul not only of to rules laid down by national law which general principles of national law but also of contains no principle of the protection of general principles of Community law', legitimate expectations to refrain from post- clearance recovery from traders who have acted in good faith.

that question being one which

traders, collide with a principle of That quotation clearly shows that, in Mr Community law enshrining such protection. Advocate General Reischl's view, the charging of an additional levy may conflict with the principle of legitimate expectations 27. It is clear that the aforementioned enshrined in national law. He thus outlined case-law of the Court does not resolve that the reasoning which was to be put forward problem and it is not sufficient therefore to in the judgments in the Ferwerda and transpose it in order to resolve the problem Deutsche Milchkontor cases. On the other within the context of the present case. The hand, there is no question of an obstacle to Court must therefore consider the question the charging of an addditional levy resulting afresh. from the protection of legitimate expec­ tations afforded by Community law. In her opinion in Salumi (No 2) Mrs Advocate 28. At this stage of my consideration of the General Rozès observed, in relation to the questions submitted by the Venice court I assessment of the situations at issue, which must clarify the position attributed at the were not affected by Regulation No hearing to Mrs Advocate General Rozès 1697/79 because they were prior to its entry and Mr Advocate General Reischl. It does into force, that not seem to me to be quite in accordance with the true position to assimilate the view expressed by those Advocates General in opinions given in certain cases to the argument of the traders concerned. After raising the question whether there is nothing to prevent the national courts from following the principles on the subsequent charge ... may not be which Regulation No 1697/79 ... is based, barred by the principle of the protection of in so far as their application to the proceedings before them does not render legitimate expectation, which is known to the post-clearance recovery of Community the legal systems of all the Member States', levies impossible in practice or less effective than the collection of national taxes and 2 charges of the same kind'. 2 Mr Advocate General Reischl replied in his opinion in Salumi (No 1) that if the additional charge is not already barred by other conditions for, or time-limits on, the making of the claim,

29. With that clarification made, it is now 32. However, I am not proposing that the necessary to consider an argument put Court should confine itself to its dicta in the forward by the Commission to the effect Maïzena judgment to reject ab initio the that the situation of traders who have been possibility of applying the Community subject to a wrong application of principle of the protection of legitimate Community law as a result of a mistaken expectations. It seems to me that the scope interpretation by the national authorities can of that judgment must be determined by never be protected in Community law by taking account of the case-law by which the legitimate expectations. The argument is Court has defined the existence in based on the judgment of 15 December Community law of the principles of legal 1982 in the case of Hauptzollamt Krefeld v certainty and legitimate expectations. Since 23 Maïzena GmbH in relation to production they are principles which, by definition, are refunds for starch made from maize. intended, for the sake of a balance between equity and the rigour of the law, to protect unlawful situations from a strict application of the law, one may hesitate to give the Maïzena judgment an interpretation which 30. Where a trader alleged that there was a would rob them of a large part of their breach of the principle of legitimate expec­ effect. tation by reason of the fact that a Member State had suddenly departed from its practice regarding the application of Community rules which it had followed for several years and which had not been chal­ 33. It is true that it would be possible on lenged by the Commission, the Court held the basis of a comparision between the that judgments in Ferwerda and Deutsche Milch¬ kontor on the one hand and the judgment in Maïzena on the other to take the view that the case-law of the Court reserves different roles to national principles and Community 'the practice of a Member State which does principles concerning the protection of legal not conform to Community rules may never certainty and legitimate expectations. The give rise to legal situations protected by Community principles would apply for the Community law and this is so even where benefit of traders where the action of the Commission has failed to take the Community institutions is at issue but not necessary action to ensure that the State in where it is a matter of the implementation question correctly applies the Community by the Member States of Community rules. 24 rules'. In the latter case, traders would therefore not be able to rely on Community law but 23 — Case 5/82 [1982] ECR 4601. would have the opportunity of relying on 24 — Paragraph 22.

the protection of legal certainty and assimilation with the rules applicable to legitimate expectations under national law, customs duties, had never been the subject, subject to the observance of certain before the Frecassetti case, of any notable conditions. sign of disapproval from the Commission. On the contrary, when preparing a directive, the Community institutions seemed to manifest the intention of 34. That analysis, as is apparent, would enshrining in the Community rules the lead to the rejection of the argument put practice of granting the most favourable rate forward by the traders who are the plaintiffs in relation to agricultural levies. In that in the main proceedings. I think, however, respect the traders concerned referred to that it would be open to challenge to rely several proposals for a directive, published on considerations basically drawn from only the judgment in Maïzena for such a clear before the judgment in Frecassetti, which distinction as that which I have described. It would have made the practice into a rule. must also be observed that the statement of principle in that judgment must already be qualified by reason of the existence in Regulation No 1697/79 of rules of 38. If reference is made to the view Community law which are intended expressed by Mr Advocate General Reischl 25 precisely to protect legal situations, some of in his opinion in the Amylum case to the which, by definition, are the result of an effect that where a proposal is published incorrect application of the law by the then competent authorities. That qualifies the statement that a situation that is irregular under Community law may never be protected by any of its rules. 'under the case-law of both the Court of Justice and the national courts [it] may certainly be regarded as a factor relevant to the question of the protection of legitimate 26 expectation' 35. That is why it seems to me that the argument based on the judgment in Maïzena does not rest on a sufficiently certain legal analysis to conclude the discussion for which the questions put by the Venice court it is not possible to escape the conclusion call and which must therefore be carried that traders who have enjoyed the most further. favourable rate might legitimately expect that the levies which they had been charged were valid.

40. In that judgment the Court defined the 'implies that there must be no discrimination 'day of importation' in relation to a specific in respect of the procedural and substantive class of goods differently from the defi­ conditions on which, on the one hand, nition it was to give in 1976 in relation to a traders may challenge Community charges more general class. Subject to its specific imposed upon them by demanding a refund nature, the first definition could appear to where payment was wrongly made or be less incompatible with the practice of claiming the financial benefit of a granting the most favourable rate than the Community nature to which they are second. Without going so far as to say that entitled, and on which, on the other, the it encouraged traders in their expectation, it authorities of the Member States, acting on cannot be said to have discouraged them behalf of the Community, may collect the from entertaining it either. said charges and, if necessary, recover financial benefits which were wrongly 29 granted'.

41. Those first observations therefore lead to the view that before the judgment in 44. The main proceedings clearly show the Frecassetti the confidence of traders in the differences resulting from the application to validity of levies charged at the most post-clearance recovery of agricultural levies favourable rate was plausible. That cannot of national law according to whether or not be irrelevant to the question of equity. it protects legitimate expectations.

45. In the case of unduly paid Community 42. Equity may also be mindful of one aids for powdered milk, the Court has aspect of the traders' situation which is indeed held that, although reference to stressed in the case-law. national law may mean that

47. In the matter of the post-clearance recovery of import and export duties, the competent Community institution, namely 'means that a judicial interpretation can 32 the Council, set about remedying the provide only a partial remedy.' disparities by adopting Regulation No 1697/79. We know, however, that that regulation does not apply to levies charged prior to its entry into force. The disparities which precisely created the need for 50. That finding seems to me to be illus­ Community rules were not dealt with by trated by a comparison of the laws of the them, for they applied only to the future. Member States on the question of the post- The required reconciliation between clearance recovery of taxes charged at an reference to national law and equality of insufficient rate. It reveals that the periods treatment of Community traders, forcefully for remedying an insufficient payment of a expressed in the judgments of the Court, customs debt or one treated as such vary has thus not been implemented in certain considerably from one State to another cases in regard to lawfulness. That, too, since the 'scale' extends from one to 10 cannot be a matter of indifference from the years; six Member States, including Italy, of point of view of equity. the 10 considered have a period of at least five years. It is to be observed that the protection of legitimate expectations is unknown in the United Kingdom, Ireland, 48. It remains to be seen whether equity Spain, Portugal and Italy; Belgium may prevail in the present case and lead to a compensates for the absence of such protection by making the revenue or 30 — Joined Cases 205 to 215/82 [1983] ECR 2666, paragraph

customs authorities liable if the error of system, especially since the statement by the calculation was due to their fault. Court of a principle applicable necessarily only to Community levies in the wide sense would give rise to disparities between the procedures for post-clearance recovery conducted by the authorities of certain Member States. The authorities would be 51. In view of that variation in national required to observe legitimate expectations laws, the statement of a Community in the case of Community levies and would principle preventing agricultural levies from continue to be able to disregard them in the being amended at the end of a uniform case of national levies. It does not seem to period or even within that period where the me desirable that the decisions of this Court taypayer has acted in good faith can should produce such consequences in the scarcely appear to be based on 'principles legal and administrative affairs of the common to the laws of the Member States' Member States, especially with regard to or even to 'principles generally recognized' past transactions.

would be necessary to determine the point in time, which would necessarily be prior to 54. In the result, it seems that to go beyond the entry into force of the regulation, from the philosophy expressed in the judgments which the principle would have had the in Ferwerda, Salumi (No 1) and Deutsche force of law and accordingly to recognize Milchkontor, as the traders concerned have that the effects of the rules which the Court, suggested, is perilous. In that line of cases, in the formal context of that regulation, had after laying down the principle that in the refused to recognize as being retroactive, 34 absence of Community rules for the did go back in time. recovery of amounts which have not been fully paid or of aid which has been wrongly paid, reference must be made to national law, the Court indicated the two limits to

PADOVANI AND OTHERS v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

disparities between national laws and in 'in the actual judgment ruling on the inter­ each of the cases the need for protecting pretation sought'. 36

legitimate expectations had been pleaded before the Court, it did not add to the two aforementioned limits a third limit based on that need. The reasons for not doing so have still not disappeared and therefore I do 57. It is clear from the very terms of the not think that the Court's attitude should judgment in Frecassetti, which stipulates no change. limitation on the effects of the interpretation given, that in that case it did not appear to the Court that the principle of legal certainty justified any such modification. In 55. It is indeed quite regrettable that the that case, it does not seem that the Court's plaintiffs in the main proceedings are in a situation which is all the more inequitable in attention was specifically drawn to a risk of so far as the authorities of the other serious confusion consequent upon the Member States who before the judgment in interpretation which was ultimately adopted. Frecassetti charged the most favourable rate have not subsequently undertaken post- clearance recovery. There were, however, well-identified legal procedures for remedying that situation. Only they were 58. Moreover, with regard to the temporal not used. application of the Community rules, the Court recognized in its judgment in Amylum that

59. Thus, the protection of legal certainty there is any such possibility, it would be and legitimate expectations pleaded by the desirable that it should be used. traders concerned was not assured by one of the legal procedures which, according to the 61. However, as far as Community law is case-law of the Court, were conceivable in concerned, in view of the aforementioned that respect. That does not seem to me to observations I do not consider it possible to justify today recourse to a legal process give it a meaning which it does not have. which is much less certain. Like Boulouis, I think that it cannot, through excessive flexibility, guarantee the 60. I do not know whether, in the face of authorities responsible for implementing such inequitable situations revealed by the Community rules against the consequences, present case, a solution may be found by the in particular the pecuniary consequences, of adoption of a practice on the initiative of the unlawful use of their powers. That is 'to 38 the competent Community institutions. If confuse law with responsibility'.

62. That is why in my opinion the Court should rule that:

The principles of the protection of legal certainty and legitimate expectations enshrined in Community law and applied in particular in relation to agricultural levies by Council Regulation No 1697/79 of 24 July 1979 do not prevent the auth­ orities of a Member State, with regard to levies paid before the entry into force of that regulation and consequently recovered according to the provisions of the national laws, from pursuing, in accordance with their own national law, full recovery from traders who, by reason of an incorrect administrative interpretation of the Community rules on payment, originally benefited in good faith from an insufficient calculation of the amount they were liable to pay.'