C-203/89
ECLI:EU:C:1990:258
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VAN LANDSCHOOT
OPINION OF MR ADVOCATE GENERAL TESAURO delivered on 21 June 1990 *
Mr President, The court hearing the case accordingly Members of the Court, submitted a question to the Court of Justice on the validity of the system involving the application of the co-responsibility levy established by Commission Regulation (EEC) No 2040/86. 2 1. The Vredegerecht for the judicial district of Brasschaat has asked the Court a question on the validity of two Commission Regulations, Regulation (EEC) No 2324/88 and Regulation (EEC) No 3779/88, 1 both of which were adopted pursuant to the 3. In its judgment the Court declared the Court's judgment of 29 June 1988 in Case second subparagraph of Article 1(2) of that 300/86 Van Landschoot v Mera [1988] regulation invalid 'in so far as it exempts ECR 3443, 3456. from the co-responsibility levy the first-stage processing of cereals carried out on the producer's own agricultural holding by means of the machinery of the farm, provided that the products of the processing 2. This new reference for a preliminary are used on that holding, but does not ruling arises from the same dispute as that provide for such exemption for first-stage which had given rise to the proceedings in processing carried out off the producer's Case 300/86. I shall give a brief outline of agricultural holding or by means of the circumstances of the case. On 16 machinery which does not form part of the September 1986, Mr Landschoot, the owner agricultural installations of the farm, where of a mixed farm engaged in the cultivation the products of the processing are used on of cereals and breeding of livestock, sold to that farm'. NV Mera, a processing undertaking, a quantity of cereals (4 925 kg), paying the co-responsibility levy thereon (equal to BFR 1 242). Seven days later Mr Van Landschoot purchased from Mera animal feed containing a virtually identical quantity 4. Following that judgment, the (4 575 kg) of cereals of the same quality as Commission adopted two measures. First of those previously sold. all, it altered the scope of the levy by means of Regulation No 2324/88, according to which the levy is payable in respect of the quantities of cereals 'placed on the market', Taking the view that the levy he had borne where 'placing on the market' means 'sales at the time of sale of the cereals was (including barter operations) by producers' unlawful, Mr Van Landschoot instituted (see Article 1 of Regulation No 2324/88). proceedings against Mera, in which he On the other hand, 'producers who have sought reimbursement of the amount paid. first-stage processing operations carried out by a third party with a view to the * Original language: Italian. 1 — OJ 1988 L 202, p 39 and OJ 1988 L 332, p. 17. 2 — OJ 1986 L 173, p. 65
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subsequent use of the processed product on A producer of cereals may seek reimbur their holdings' are exempted from the levy sement pursuant to Regulation No 3779/88 (second recital in the preamble to Regu and, more generally, is exempted from the lation No 2324/88). levy by Regulation No 2324/88 where the cereals have been processed on his account by a third party and have then been used on Secondly, in adopting Regulation No his holding as animal feed. 3779/88, the Commission remedied the consequences of the discrimination estab lished by the Court in its judgment in Case On the other hand, there is no right to 300/86 by providing that the charges reimbursement and, in general, the levy is unduly paid by producers were to be reim payable, where the producer has sold the bursed by means of an appropriate cereals, and therefore 'placed [them] on the procedure. market', even though he has subsequently purchased animal feed produced from cereals of the same quality as those With that end in view, Article 1(1) of Regu previously sold. lation No 3779/88 provides as follows:
5. The Vredegerecht is now asking the 'The competent agencies designated by the Court whether that difference of treatment Member States shall reimburse before is lawful. 30 June 1989 to producers, on application by the latter, the amounts of co-responsi bility levies withheld: Before considering the substance of the question submitted by the national court, it is advisable to define its ambit. (i) on processing operations on the producer's account as referred to in the second sentence of Article 1(2) of Regulation (EEC) No 2040/86, the To begin with, it should be noted that the product obtained from which has been claim for reimbursement of the levy which used on the holding of the producer for forms the subject-matter of the dispute in animal feed; the main proceedings was submitted in a procedure governed by national law and not under the appropriate 'Community' procedure referred to in Regulation (ii) on operations for the processing of No 3779/88. cereals delivered or made available to an undertaking by a producer (work under contract) for subsequent utili zation on his holding by 26 July 1988 In that regard, I believe only two obser pursuant to Article 1(2) of Regulation vations are called for. (EEC) No 1432/88'. 3
In the first place, Regulation No 3779/88 To summarize, therefore, the situation is as provides for and regulates the possibility for follows. producers to apply directly to the competent national agencies in order to obtain reim 3 — OJ 1988 L 131, p. 37. bursement of the levy unduly paid; that
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option is provided for also, if not primarily, collection laid down by Regulation No in the interest of the producers themselves 2040/86. and, in particular, of those who, having failed to challenge the payment of the levy before the national courts, were no longer able at the time of the judgment in Case In any event, it seems to me that Article 300/86 to take action within the proper 1(1) of Regulation No 3779/88, whilst time-limits on the basis of national legal distinguishing between operations carried procedures. That being so, and in the out under two different systems of charging absence of express provisions in the regu the levy, envisages a single situation, lation itself, the 'Community' procedure laid common to both systems, in which the right down by the regulation must be regarded as to reimbursement continues to exist, namely not precluding those concerned from where processing operations are carried out resorting to national legal procedures with by a third party 'on account of' a cereal the same end in view (namely obtaining producer. In substance, therefore, the Court reimbursement). is called upon to rule on the validity of Article 1(1) as a whole, and not just on a part thereof (whichever part is relevant).
Secondly, although it acts in a procedural context different from that envisaged by the regulation, the national court must, when adjudicating on the claim before it, apply In addition, the question of validity neces the substantive provisions of Regulation No sarily extends to the provisions of Regu 3779/88 which determine the circumstances lation No 2324/88 which, in compliance in which the right to reimbursement (in with the judgment in Case 300/86, were whichever way it is exercised) continues to adopted with a view to modifying the field exist. Hence there is no doubt that the of application of the levy. That is apparent question whether those provisions are valid from the order for reference itself and is, is essential for the solution of the dispute in moreover, self-evident inasmuch as the the main proceedings. scope of the right to reimbursement must necessarily be defined in relative terms by reference to the scope of the levy, and vice versa. In that regard, it must be pointed out that the provision to which the national court refers in its question is the second indent of Article 1(1) of Regulation No 3779/88, that To summarize, therefore, the question is to say the provision concerning the reim which the Court is called upon to consider bursement of levies paid in accordance with is essentially whether the principle of the arrangements for collection introduced equality is contravened in a situation where, by Commission Regulation No 1432/88. pursuant to the Community legislation in force, producers whose cereals have been processed, on their account, by an industrial processor and who have subsequently used It is clear, however, that the question the processed products as animal feed on submitted for a ruling must refer to the first their own holdings are exempted from the indent of the aforesaid provision, given that co-responsibility levy, whilst those the levy at issue was paid in accordance producers are liable to pay the levy when with the previous arrangements for they sell the cereals to a processing under-
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taking and subsequently purchase, for use on legislature disregarded the nature and scope their own holdings, animal feed produced of the judgment in Case 300/86. Hence it is from cereals of the same quality as those necessary to consider first of all what previously sold. criterion for exemption from the levy was laid down by the Court in that judgment, and then to ascertain whether it has been properly applied by the contested rules.
6. Both parties to the dispute in the main proceedings, the national court and the Italian Government consider that exemption from the levy should be granted not only in In must be borne in mind that, in its the case of processing under contract but judgment, the Court stated that 'the also where the cereals are sold and then objective of the Community regulations bought back by the producer in the form of governing the co-responsibility levy is to animal feed: to restrict the exemption solely limit the structural surpluses on the cereals to the first of those situations, on the other market' and that 'this objective provides hand, would give rise to discrimination justification for imposing the levy only on which is incompatible with Community law the processing of cereals placed on the and, in particular, would be contrary to the market, since it is only in such a case that unequivocal wording of the judgment in market surpluses are increased, whilst quan Case 300/86. tities of cereals remaining in a closed circuit do not contribute to the creation of surpluses' (paragraph 11).
In the light of that judgment, the criterion for determining the scope of the exemption in question is said to be the use of the It is quite apparent from that part of the (processed) cereals on the holding on which judgment, and from the passages that they were produced. Instead, the type of follow, that the decisive criterion for legal and economic relationship between the defining the scope of the exemption from traders concerned, that is to say the the levy lies in whether or not the cereals producer/breeder, on the one hand, and the have been placed on the market. processing undertaking, on the other, is regarded as wholly immaterial : whether that undertaking has processed the cereals 'on account of the producer, or has purchased them and subsequently sold the processed The rationale behind that criterion is products, the cereals are in any event used equally clear. The Court has taken the view by the person that produced them and their that only production which enters the exemption from the co-responsibility levy is commercial chain is, for that very reason, therefore said to be justified. capable of affecting the overall balance of the market; it is therefore justified to apply the specific deterrent represented by the co-responsibility levy only in respect of such production. In other words, in order to 7. The core of the argument advanced by qualify for exemption neither the cereals nor the parties referred to above therefore the processed products must be the subject consists in the assertion that the Community of commercial transactions.
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8. That being so, it is indisputable, in my be regarded as 'remaining in a closed view, that the contested rules constitute a circuit' and which do not enter the normal faithful transposition of the criterion laid commercial chain — the contested rules down in the judgment. There is no doubt must be regarded as being quite consistent that if the cereals are processed by an with the criterion laid down by the Court in industrial processor, on account of the its judgment in Case 300/86. producer, neither the cereals nor the resultant animal feed are placed on the market. The cereals themselves remain the property of the producer throughout the 9. However, it would be difficult to find processing operation until they are used, any justification for extending the whilst the processing undertaking merely exemption to the situation forming the provides a service with a view to processing subject-matter of the dispute in the main the cereals into animal feed. proceedings, given the objective difference which, from the point of view of the effect on the market, exists between that situation and processing 'on account of' the producer.
Conversely, in the circumstances of this case (sale of cereals and subsequent purchase of As stated earlier, the sale of cereals affects animal feed), there is a twofold entry in the overall supply and is reflected in the level of commercial chain: first when the farmer prices. Hence there is a direct effect on decides to sell cereals to a processing under market equilibrium. It is true that the taking, transferring the ownership of the subsequent purchase of animal feed cereals and the attendant economic risk to containing cereals of the same quality as that undertaking, and secondly when the those previously sold may, at least in certain producer then decides to purchase animal circumstances, produce effects of the feed produced from cereals as opposed to opposite kind, inasmuch as it may help to other competing products. Two commercial sustain demand and prices on the market in transactions are involved, each independent cereals. It is equally true, however, that it of the other, which are effected on two cannot always be taken for granted that the distinct markets and which depend ulti purchase of animal feed is capable of mately on the conditions prevailing on those 'neutralizing' altogether the economic markets and on the corresponding consequences of placing the cereals on the assessments made by the parties concerned. market. The purchase of animal feed is an Those transactions, by their very nature, operation carried out on a market down affect the overall balance of the relevant stream and has only indirect repercussions markets, first and foremost the market in on the market in cereals upstream, that is to cereals. say only as a result of the behaviour of, and the choices made by, industrial processors.
Hence although the sale of cereals Accordingly, in so far as they limit contributes directly to the creation of exemption from the levy solely to surpluses, it does not follow that the consignments of cereals processed 'on purchase by the producer of animal feed account of' the producer — that is to say, produced from cereals necessarily offsets the only consignments which can genuinely and therefore neutralizes that effect.
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It seems to me, therefore, that there are the system of applying the co-responsibility objective grounds which justify provision for levy. If the reasoning of the parties to the exemption being made only in the case of main proceedings were taken to its logical processing under contract (where the cereals conclusion, it would have to be do not enter the market at all), but not in acknowledged that the levy is not payable, the situation forming the subject of the and must therefore be reimbursed, indepen dispute in the main proceedings where the dently of the time which has elapsed cereals enter the normal commercial chain, between the sale of cereals and the purchase even though they may subsequently be of animal feed and, in the final analysis, purchased and used by the same producer as even where the producer purchases animal animal feed. feed from a processing undertaking other than that to which he sold the cereals; in Conversely, to provide for identical any event, he would use on his own holding treatment in both of those situations, cereals of the same quality as those notwithstanding the objective difference previously placed on the market and would between them, would be tantamount to therefore contribute, albeit after a time, to defying the rationale on which the levy finding an outlet for the cereals produced system is based and which entails, as is quite and marketed by himself. Such conse clear from the judgment in Case 300/86, quences clearly seem contrary to the the application of the levy solely to cereals rationale behind the levy system which, at placed on the market in order to discourage least in its present form, aims essentially to production thereof. reduce income from sales of cereals and 10. It is clear, moreover, that a different thereby discourage the marketing of cereal solution would also drastically affect production. 4
11. In the light of those considerations, I propose that the question submitted by the national court should be answered as follows: consideration of the question raised has not disclosed any factors of such a kind as to invalidate Commission Regulations Nos 2324/88 and 3779/88.
4 — See the Opinion in Case C-8/89 Zardi [1990] ECR I-2515.
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