C-41/97

5. Subsequently Council Regulation (EEC) I — The relevant Community legislation No 1463/82 of 27 May 1982 4 amended Council Regulation (EEC) No 2915/79, as regards the conditions for the entry of cer­ tain cheeses under certain tariff headings, and Regulation No 950/68. Kashkaval cheese came under tariff heading 04.04 E I b) 2. As 3. By Regulation (EEC) No 2307/70 of 2 in the abovementioned regulations, there was 10 November 1970, the Council introduced a note stating that 'entry under this subhead­ ing is subject to conditions to be determined by the competent authorities'. * Original language: French. 1 — OJ 1982 L 196, p. 1. 2 — Regulation amending, as regards certain cheeses, Regulation (EEC) No 823/68 determinine the groups of products and the special provisions for calculating levies on milk and milk 3 — OJ 1979 L 329, p. 1. products (OJ, English Special Edition 1970 (III), p. 758). 4 — OJ 1982 L 159, p. 1.

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6. As from 1 January 1988, Council Regu­ 2. The products listed in Annex I shall lation (EEC) No 2658/87 of 23 July 1987 on qualify for the abovementioned import levies the tariff and statistical nomenclature and on only on production of an IMA 1 certificate the Common Customs Tariff 5amended the drawn up according to the specimen in tariff nomenclature of the Common Cus­ Annex II, subject to compliance with the toms Tariff. Henceforth, Kashkaval cheese conditions laid down in this Regulation.' came under CN Code 0406 90 29, in relation to which footnote 2 stated that 'Cheese, imported from a third country in the frame­ work of a special arrangement concluded between that country and the Community Under Article 3(1) and (2): subject to the production of an IMA 1 cer­ tificate delivered in accordance with the con­ ditions laid down in the relevant Commu­ nity provisions, is subject to a reduced levy'.

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10. Annex II contains the specimen IMA 1 that under the Community rules the prefer­ certificate referred to in Article 1(2) of the ential system applies only in the case of regulation. Kashkaval made exclusively from sheep's milk, the Belgian authorities therefore requested Foodie on 18 December 1989 to pay the difference between the amount of the normal rate of levy and the preferential rate 11. Annex III sets out the rules for filling already paid. out the certificates and provides with regard to Kashkaval cheese that the following must be completed, in addition to boxes 1 to 6, 9, 17 and 18: 14. That amount was not paid and on 8 January 1992 the Belgian State brought an action against Foodie seeking payment of BFR 66 424 325, namely the amount of the '2. Box 10 by specifying "exclusively home- additional levies plus the securities lodged, produced sheep's milk"'. being forfeit on the ground that the import certificates had been misused.

II — Facts and proceedings before the national court 15. The Rechtbank van Eerste Aanleg (Court of First Instance), Antwerp, delivered judgment on 29 June 1994, dismissing, for the most part, the Belgian State's application.

12. Between 24 December 1987 and 13 October 1988, Foodie BV ('Foodie') imported 860 000 kilos of Kashkaval cheese from Hungary. Each of the 16 import decla­ rations was accompanied, in accordance with 16. The Belgian State then appealed against Article 1(2) of Regulation No 1767/82, by an that judgment to the Hof van Beroep, Ant­ IMA 1 certificate. Those certificates all stated werp. that it was Kashkaval cheese made from cows' milk.

20. The second recital in the preamble to Regulation No 1767/82 states that: 'admis­ (2) Does an IMA 1 certificate issued pursu­ sion to tariff headings is no longer the sole ant to Regulation (EEC) No 1767/82 factor to be considered for the purposes of but completed in a manner contrary to applying the specific levy'. the instructions set out in the annexes to that regulation satisfy the requirements of Article 2 of that regulation, and, if not, does this result in forfeiture of entitlement to a reduced rate of import levy?' 21. Article 1(2) of the regulation provides that two conditions must be met in order to qualify for the preferential system, namely:

The first question — production of an IMA 1 certificate drawn up according to the specimen in Annex II

18. It appears from the order for reference that the respondents in the main proceedings and (the importers) consider that Kashkaval may also be made from cows' milk. They point out that the Hungarian authority which filled out the IMA 1 certificate expressly stated in Box 10 on the form that it related — compliance with the conditions laid to cheese made from cows' milk, thereby down in Regulation No 1767/82.

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22. One of those latter conditions is speci­ specification, in its tariff headings, the fied in Article 3(2), which provides that the Belgian State may not draw a distinction certificate must contain the particulars set according to whether the cheese is made out in Annex III. from cows' milk or sheep's milk'. By 'tariff headings' they clearly mean Annex I to the regulation.

28. It should be noted that (with a single exception) Annex I does not provide any 25. In their written observations, the information regarding the raw material to be respondents in the main proceedings claim used to make the other cheeses which are that 'the wording of Regulation (EEC) No listed in it by name (Emmental, Cheddar, 1767/82 of 1 July 1982 does not distinguish Tilsit and Finlandia, for example). In the case between Kashkaval cheese made from cows' of all those cheeses it is necessary to refer to milk and Kashkaval cheese made from Annex III, which specifies the raw material sheep's milk; that subtle distinction is intro­ to be used for most of the cheeses concerned. duced only in the annex, but one may ask So Annex III serves to clarify Annex I. The whether the wording of the annex to the two annexes complement one another and regulation prevails over that of the regulation form a whole. itself. The answer is clearly that it does not' (paragraph 16 of the observations lodged with the Court).

29. As the text of Annex I thus cannot take precedence over the text of Annex III, the 26. In a later paragraph the respondents in Community legislature's intention to grant the main proceedings add: 'Since the original entitlement to the preferential rate of levy version of the regulation in question men­ only to Kashkaval cheese made from sheep's tioned only "Kashkaval", with no further milk is beyond doubt.

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36. Moreover, as the Commission correctly states, it was not competent to make any 120,, p. 56 6 — OJ 1990 L 120 56.. amendments to the characteristics of the

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BELGIAN STATE v FOODIC AND OTHERS

Kashkaval cheese concerned, since they had of Article 1 of Regulation No 1767/82. I been laid down by the Council in Regulation shall base my answer to the question on that No 2307/70. article.

40. Article 1 stipulates that the conditions 37. There is thus no doubt that the answer laid down in the regulation must be com­ to the first question referred by the national plied with. One of those conditions is laid court should be in the affirmative: the Kash­ down in Article 3(2), which states that the kaval cheese referred to in Regulation No IMA 1 certificate must contain the particu­ 1767/82 must have been made exclusively lars set out in Annex III. from sheep's milk.

41. It is also stated in Article 5(1) that a cer­ The second question tificate is 'valid only if duly completed'.

49. Submission of an IMA 1 certificate com­ plying with all the requirements laid down in Regulation No 1767/82, and in particular all the instructions set out in Annex III, as 45. In reply to the first part of the second regards both substance and form, is therefore question, therefore, it should be held that an a necessary precondition for qualifying for IMA 1 certificate issued pursuant to Regu­ the preferential rate of levy. lation No 1767/82, which is filled out in a manner contrary to the instructions set out in the annexes to that regulation, does not satisfy the requirements of that regulation.

50. The respondents in the main proceedings further maintain, however, that the regu­ 46. The Hof van Beroep also asks whether lation does not provide for any penalties and such failure to comply with the instructions that the benefit of the preferential rate there­ results in 'forfeiture of entitlement to a fore cannot be withdrawn. reduced import tariff (see point 17, above).

47. The consequences of failure to comply 51. On that view, the goods imported would with the requirements laid down in Regu­ thus qualify for the preferential rate under lation No 1767/82 are set out in Article 1(2). the regulation even though the conditions That provision, I repeat, states that the prod­ laid down in the regulation were not ucts listed will qualify for the preferential complied with (Article 1 (2)) and even though rate only if the conditions laid down in the the certificates submitted were not valid regulation have been complied with. (Article 5(1)).

55. If the Court were to answer the ques­ 'The competent authorities may refrain from tions referred by the Hof van Beroep in this taking action for the post-clearance recovery manner, the respondents in the main pro­ of import duties or export duties which were ceedings submit that Article 5(2) of Council not collected as a result of an error made by Regulation (EEC) No 1697/79 of 24 July the competent authorities themselves which 1979 on the post-clearance recovery of import duties or export duties which have not been required of the person liable for payment on goods entered for a customs 7 — OJ 1979 L 197, p. 1.

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could not reasonably have been detected by 61. At the same time, the competent autho­ the person liable, the latter having for his rity of the importing country made an error part acted in good faith and observed all the in charging the reduced rate of levy when the provisions laid down by the rules in force as IMA 1 certificates stated that the cheese had far as his customs declaration is concerned.' been made from cows' milk. A check on Regulation No 1767/82 would have shown them that such products did not qualify for the preferential rate.

59. That provision thus lays down three requirements for the competent authorities to be able to refrain from taking action for post-clearance recovery, those three require­ ments being cumulative: 62. Did the person liable act in good faith?

— the duties must have not been collected as a result of an error made by the com­ petent authorities themselves; 63. Without doubt, the person liable did not commit fraud in this particular case and did not resort to deceptive practices in that there was no misrepresentation to the Hungarian or Belgian authorities as to the raw material — the person liable must have acted in good used in making the cheeses. However, it was faith, that is to say, must have been quite wrong to seek IMA 1 certificates from unable to detect the error made by the the authorities of the exporting country in competent authorities; and respect of products which did not qualify for the preferential rate.

67. As stated above, the Commission acknowledged in the second recital in the preamble to Regulation No 1225/90 cited above that 'certain difficulties have arisen in the description of that cheese when the IMA 1 certificate is drawn up'. As a result, it replaced the description 'Kashkaval' in 70. The respondents in the main proceedings Annex I to Regulation No 1767/82 by the also rely on the principle of legitimate expec- description 'Kashkaval cheese of sheep's tations. In that connection, it is sufficient to 9 milk', and at the same time added some other quote the Krücken judgment, in which the particulars concerning the characteristics of Court ruled that 'the principle of the protec­ that cheese. tion of legitimate expectations cannot be relied upon against a precise provision of Community law and that the conduct of a national authority responsible for applying Community law, which acts in breach of that law, cannot give rise to legitimate expecta­ tions on the part of an economic operator that he will benefit from treatment which is 68. However, as I have already explained in contrary to Community law'. connection with the answer to the first ques­ tion, I am of the view that a professional importer seeking to qualify under a derogat­ ing system should have read through the 9 — Case 316/86 [1988] ECR 2213, paragraph 24.

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Conclusion

71. In the light of the foregoing I consider that the two questions raised by the Hof van Beroep, Antwerp, should be answered as follows:

(1) 'Kashkavaľ, in Commission Regulation (EEC) No 1767/82 of 1 July 1982 lay­ ing down detailed rules for applying specific import levies on certain milk products, refers to cheese produced exclusively from sheep's milk.