C-395/00

CIPRIANI

O P I N I O N OF ADVOCATE GENERAL MISCHO delivered on 21 March 2002 1

Introduction or legal person authorised by the competent authorities of a Member State to produce, process, hold, receive and dispatch prod- ucts subject to excise duty in the course of his business, excise duty being suspended 1. Reference has been made to the Court by under a tax-warehousing arrangement. the Tribunale di Trento (District Court, According to Article 4(c), 'suspension Trento, Italy) for a preliminary ruling in a arrangement' means a tax arrangement case concerning alcohol products moving applied to the production, processing, hold- under a duty-suspension arrangement. ing and movement of products, excise duty being suspended.

4. Under the terms of Article 15(3) of the The Community provisions applicable Directive:

2. Under Article 3(1) of Council Directive 92/12/EEC of 25 February 1992 on the 'The risks inherent in intra-Community general arrangements for products subject movement shall be covered by the guaran- to excise duty and on the holding, move- tee provided by the authorised warehouse- ment and monitoring of such products 2 keeper of dispatch, as provided for in ('the Directive'), the provisions of the Article 13, or if need be, by a guarantee Directive apply to alcohol and alcoholic jointly and severally binding both the beverages. consignor and the transporter. If appropri- ate, Member States may require the con- signee to provide a guarantee.

3. Article 4(a) of the Directive defines an 'authorised warehousekeeper' as a natural The detailed rules for the guarantee shall be laid down by the Member States. The 1 — Original language: French. guarantee must be valid throughout the 2 — OJ 1992 L 76, p. 1. Community.'

Where the excise duty is collected in a Member State other than that of departure, the Member State collecting the duty shall 6. Article 19(4) of the Directive stipulates inform the competent authorities of the that '[w]here the products subject to excise country of departure. duty which are moving under the duty- suspension arrangement as defined in Article 4(c) are exported, this arrangement should be discharged by an attestation drawn up by the customs office of depar- ture from the Community confirming that the product has indeed left the Community. 2. When, in the course of movement, an That office must send back to the consignor offence or irregularity has been detected the certified copy of the accompanying without it being possible to determine document intended for him'. According to where it was committed, it shall be deemed Article 19(5), '[i]f there is no discharge, the to have been committed in the Member consignor shall inform the tax authorities State where it was detected. of his Member State within a time-limit to be fixed by those tax authorities. The time-limit may not, however, exceed three months from the date of dispatch of the goods.'

3. Without prejudice to the provision of Article 6(2), when products subject to excise duty do not arrive at their desti- nation and it is not possible to determine 7. Article 20 of the Directive is worded as where the offence or irregularity was com- follows: mitted, that offence or irregularity shall be deemed to have been committed in the Member State of departure, which shall collect the excise duties at the rate in force on the date when the products were ' 1 . Where an irregularity or offence has dispatched unless within a period of four been committed in the course of a move- months of the date of dispatch of the

The main proceedings and the questions referred for a preliminary ruling 10. The file shows that it was not until after the notices demanding the payment of excise duty had been served by the Italian 8. Distillerie Fratelli Cipriani SpA ('Ci- tax authorities that Cipriani became aware priani') has been active in the alcohol of the falsification of the stamps on the distilling business for a number of years. AADs. The notices were served after the As an authorised warehousekeeper of dis- expiry of the period of four months from patch under Article 15(3) of the Directive, the date of dispatch laid down in between December 1996 and November Article 20(3) of the Directive. 1997 Cipriani carried out various oper- ations involving the movement under the duty-suspension arrangements of alcohol products intended for export to non-Com- munity countries via one or more Member States. These products were dispatched under cover of the accompanying adminis- 11. Cipriani then brought an action before trative documents ('AADs') provided for in the national court, arguing that no excise the Directive. duty was payable as there was no proof

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occurred, or, in such a case, does the operation has not been successfully com- presumption set out in Article 20(2) of pleted, the competent authorities entitled to Directive 92/12/EEC apply? If that collect the excise duty must first notify the presumption applies, may evidence be consignor of the fact that the suspension furnished of the correctness of the arrangement has not been discharged in operation or of the place where the order that he may be able to provide, irregularity in fact occurred or where within the four-month period laid down in the offence was in fact committed, and Article 20(3) of the Directive, evidence of is such evidence subject to the time- the correctness of the operation or of the limit laid down in Article 20(3)? place where the offence was in fact com- mitted.

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OPINION OF MR MISCHO — CASE C-3 95/00

ation or of the place where the offence or 21. This copy must be sent back at the irregularity was actually committed. latest within 15 days following the month of receipt of the AAD by the customs office of departure. If that is not done within that time-limit — which means that there has been no discharge — it is the consignor who must so inform the tax authorities of his Member State within a time-limit to be 17. Both Cipriani and the Commission fixed by those tax authorities. Under argue that this principle should be extended Article 19(5) of the Directive, this time- to the excise-duty suspension arrange- limit may not exceed three months from the ments, given the points of resemblance date of dispatch of the goods. between the latter and the Community transit procedure.

22. Thus, the consignor is the first to be 18. However, it should be noted that the informed of the non-discharge of the duty Community transit procedure differs from suspension arrangements and it is he who the excise duty Directive in two important must transmit the information to the com- respects. petent tax authorities of his Member State. Accordingly, the logic of the system makes it unnecessary for the competent tax auth- orities to notify the economic operator.

28. If the document is not received, he can only conclude that the goods have not arrived at their destination and must immediately seek to clarify the situation. 25. But does that rule still apply in the Since, in these circumstances, he will be circumstances envisaged in the national aware of the probable existence of an court's first question, that is to say, where offence within the four-month period from the mechanism provided has failed to the date of dispatch, the Directive requires function properly because the copy of the him also to furnish proof of the correctness AAD sent back to the consignor has been of the operation or of the place where the falsified and the consignor was not in a offence or irregularity was in fact com- position to know that it was false? This mitted within that time-limit. brings me to the third question, which is so closely bound up with the first question that it seems preferable to deal with it before the second, in conjunction with the first.

29. However, the circumstances of the present case are quite different. Thus, the party concerned received an AAD that bore the usual stamps and signatures, which led it to believe that everything was in order Third question and no further action was needed.

26. Essentially, in posing this question the national court is seeking to learn whether the four-month time-limit within which a trader must furnish proof of the correctness 30. In this respect, the order for reference of the operation or of the place where the makes clear that Cipriani had no reason to irregularity or offence was committed can doubt the authenticity of the document. It be relied on against a trader who was not concludes that it was objectively impossible informed in good time that there had been for Cipriani to apprise itself of the existence no proper discharge from the suspension of an irregularity, namely the falsification arrangement. of the stamps on the AAD.

34. At issue in the present case is whether, in such a situation, the economic operator retains his basic procedural rights. The question of his obligation to pay does not 37. As the Commission rightly points out, arise until later. Accordingly, there is no this is also the case if the measure in reason to extend the application of these question is taken by a national authority decisions to the present case. The fact that implementing Community law under cir- cumscribed powers.

4 — See, for example, Joined Cases 98/83 and 230/83 Van Gend & Loos v Commission (1984) ECR 3763 and Case 5 — Case C-462/98 P Mediocurso v Commission [20001 C-446/93 SEIM [1996] ECR I-73. ECR I-7183.

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38. It follows that, if it was objectively have less time than that at his disposal, impossible for an operator who has guar- since the time taken by the goods to reach anteed payment of excise duty promptly to the consignee and the fact that the Directive learn of the existence of a suspected allows the latter a certain amount of time irregularity or offence, he cannot be sub- within which to return the AAD must be jected to the time-limit for which taken into account. Article 20(3) of the Directive provides.

42. Thus, the real problem posed by 39. Accordingly, such an operator must be Article 20(3) of the Directive is the date accorded a new time-limit which runs from from which the four-month period starts to the moment at which the tax authorities run. have officially informed him that the sus- pension arrangement had not been properly discharged.

46. According to settled case-law, one of 50. On the other hand, these precedents, the rules for interpreting Community law is which concern disputes relating to provi- that the interpretation should be consistent sions less clear than the one now at issue, with the provision having practical effect. do not tell us when this must be deemed to Thus, the provision must be interpreted in be the case. such a way as to preserve its effectiveness.

51. Indeed, the Commission's own argu- ments raise doubts in this respect. 47. Secondly, according to the Commis- sion, it has also consistently been held that a provision must be so interpreted as to make it consistent with the Treaty and hence, a fortiori, with the fundamental principles of Community law, which include respect for the rights of defence. 52. Thus, the Commission contradicts itself by asserting that, in normal circumstances, there can be no objection to the literal application of Article 20(3) of the Direc- tive, while insisting, as part of its argument based on effectiveness, that in many instances such an interpretation would result in that provision remaining a 'dead 48. These arguments, however attractive letter'. they may seem, are nevertheless only ostensibly indisputable. They clearly indi- cate what might be considered desirable, but not necessarily what is feasible.

53. In any event, the fact that in a certain number of cases the regulations can be applied seems to me irrelevant, however large that number may be. The fact that the 49. In fact, from the case-law 6 to which the incompatibility of the provision with fun- Commission refers it follows that a provi- damental rights is due merely to its incom- sion should be given an interpretation pleteness or to some other factor is of no compatible with the principle of effective- consequence as far as the existence of the ness and with fundamental rights, when- incompatibility and its seriousness are con- ever possible. cerned. Whether the violation of funda- mental rights is the result of what is present in or missing from the provision is imma- 6 — Case 15/81 Schul [1982] ECR 1409 and Case C-135/93 terial as far as the extent of the incom- Spain v Commission [1995] ECR I-1651. patibility is concerned.

55. It should also be pointed out that the 58. The Commission offers no argument solution proposed by the Commission on that might justify such differential treat- the basis of the arguments analysed above ment, and indeed there is none that springs is far from being beyond reproach from the to mind. standpoint of respect for fundamental rights. Thus, the Commission suggests the application of the normal rule, namely, a period of four months from the dispatch of the products, provided that the operator has been informed, in one way or another, of the existence of an offence or irregularity 59. Does this mean that in the present case before that period has expired. On the there is no room for interpretation and that other hand, if he was not informed until the Court can only conclude that afterwards, then, according to the Com- Article 20(3) of the Directive is invalid? mission, he should be granted a period of That, indeed, is my view. four months starting from the date on which he actually learned of the offence or irregularity.

60. The solution proposed by the Commis- sion is tantamount to adding a subpara- graph which would treat the situation with which this case is concerned as an excep- 56. It is immediately obvious that this tion to the general rule. solution results in a considerable difference in the treatment of operators, depending on when they learned of the irregularity or offence. There appears to be no justifi- cation for this differential treatment. 61. This, it seems to me, would be going 7 well beyond what is normally meant by — Joined Cases 117/76 and 16/77 Ruckdeschel and Others [1977] ECR 1753. interpretation. Indeed, the provision in

68. As this incompatibility is not due to the fixing of a time-limit as such, but to the 65. Admittedly, the national court refers choice of its dies a quo, it is consequently only to the interpretation of the provision for the national court to make the period and not to its validity. However, it is apparent from settled case-law that the Court is entitled to rephrase a question in 8 — See, to that effect, Case 16/65 Schwane [1965) ECR 877 order to furnish the national court with an and Case 145/79 Roquette [1980] ECR 2917.

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granted to the operator by the Directive for movement and monitoring of such prod- furnishing the necessary evidence start from ucts is invalid in so far as it does not afford the date on which he received notification such an operator the opportunity to pro- from the tax authorities, for example vide that evidence.' through a tax demand, that the arrange- ment had not been properly discharged.

69. I add that, to deal with this problem in Second question future, it will be for the Community legis- lature, where appropriate, to draw the consequences of the judgment of the Court. 71. The national court's second question is essentially aimed at determining whether the opportunity for the operator to prove the correctness of the transaction or of the place where the offence or irregularity was 70. In the light of the above, it is proposed committed, afforded by Article 20(3) of the that the first and third questions referred Directive, also exists where Article 20(2) for a preliminary ruling be answered as applies. follows:

76. Article 20(3), on the other hand, applies only when another condition is 80. In its referral order, the national court fulfilled, namely, the non-arrival of the states that the goods in question did not goods at their destination. In this case, it is arrive at their destination, as required by the State of departure that is deemed to be Article 20(3). The conditions of application competent. of that provision are therefore fulfilled and, consequently, paragraph 2 does not apply in this case.

77. Thus, as the Commission points out, if both provisions were applied to the same case, two Member States would be found competent to levy tax on the goods in question. This would lead to a conflict of 81. It is therefore merely for the sake of jurisdiction if the Member State in which completeness that I make the following the offence was detected was not the same observations. as the Member State of departure of the goods, whereas the two rules for assigning jurisdiction in paragraphs 2 and 3 of Article 20 are intended precisely to prevent or, in any event, resolve such conflicts. 82. Paragraphs 1 and 2 of Article 20 both address the situation in which an offence or irregularity has been committed in the course of a movement. Within this context, 78. The fact that, in the present case, the paragraph 1 concerns the situation in two provisions would designate the same which the place of the said offence or

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irregularity is known and paragraph 2 the 84. In the light of the above, it is proposed situation in which it is not. that the second question be answered as follows:

OPINION OF MR MISCHO — CASE C-395/00

of the place where the offence or irregularity was actually committed starts to run only from the time of such notification. Article 20(3) of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products is invalid in so far as it does not afford such an operator the opportunity to provide that evidence.

Second question

Where the goods in question have not arrived at their destination, Article 20(2) of the Directive does not apply.

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