JUDGMENT OF 22. 3. 1966 — CASE 30/65 MACCHIORLATI DALMAS v HIGH AUTHORITY

In Case 30/65

THE COURT composed of: Ch. L. Hammes, President, L. Delvaux (Rapporteur), President of Chamber, A. M. Donner, R. Lecourt and R. Monaco, Judges, Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Facts

II — Conclusions of the parties

III — Submissions and arguments — of the parties

A — Admissibility

B — The substance of the case

1. Submissions relating to the individual decision fixing the tonnage of scrap liable to equalization

(a) Inadequate statement of the reasons upon which the decision is based

(b) Infringement of Decision No 2/57 (Article 2 (2)) and of Decision No 16/58 (Article 4 (2))

(c) Infringement of Article 81 of the Treaty in conjunction with Article 80

(d) Infringement of the first paragraph of Article 47 of the Treaty

2. Submission relating to the individual decision fixing the amount of the contribution claimed from the applicant undertaking

3. Submissions relating to the illegality of the general decisions upon which the contested individual decisions are based

(a) Illegality of Decision No 19/60

(b) Illegality of Decisions Nos 18/60 and 20/60 in conjunction with Decision No 7/63

(c) Illegality of Decision No 7/63

(d) Illegality of Decision No 26/55

(c) Illegality of Decisions Nos 7/63, 18/60 and 20/60 fixing the equalization prices and of the decisions upon which they are based

IV — Procedure

Grounds of judgment

A — Admissibility

B — The substance of the case

1. Submissions relating to the individual decision fixing the tonnage of scrap subject to equalization

(a) Inadequate statement of the reasons upon which the decision is based

(b) Inaccuracy of the statement of the reasons upon which the decision is based

(c) Infringement of Articles 4 of Decisions Nos 2/57 and 16/58

(d) Infringement of Articles 80 and 81 of the Treaty

(e) Infringement of Article 47 of the Treaty

2. Submission relating to the individual decision fixing the amount of the equalization contributions

3. Submissions relating to the general decisions upon which the contested individual decisions are based

(a) The determination of the accounting periods

(b) Inclusion in the calculation of scrap treated as imported

(c) Changes in the amounts of scrap brought into equalization

(d) Economies in the use of scrap by the increased use of pig-iron

(e) The fixing of the equalization prices

4. The request by the applicant for measures of inquiry

C — Costs

I —. Facts

A —. On 30 October 1958 the former company Macchiorlati Dalmas e Figli was converted into a limited partnership having the same name.

B —. The applicant has on several occasions brought proceedings against the High Authority.

C —. Following repeated requests from the High Authority the applicant wrote to it on 19 May 1960 and stated that the scrap bought and consumed, for the period 1 April 1954 to 3 November 1958, amounted to 22330 metric tons.

II —. Conclusions of the parties

A —. In its application the applicant,while reserving the right to tender evidence and to make further submissions, claims that the Court should:

B —. In its statement of defence, the defendant contends that the Court should:

C —. In its reply the applicant asks the Court to order the following measures of inquiry:

D —. In its rejoinder the defendant repeats the conclusions set out in its statement of defence.

III —. Submissions and arguments — of the parties

A —. Admissibility

B —. The substance of the case

1. The submissions relating to the individual decisions:

2. The submissions relating to general decisions:

1. Submissions relating to the individual decision fixing the tonnage of scrap liable to equalization

(a). Inadequate statement of the reasons upon which the decision is based

1. The decision states that the copies of the suppliers' invoices prove that 30421 metric tons of scrap were bought, for the period from April 1954 to January 1957. The applicant raises the objection that the source of this statement is the report of the investigation in 1958, which it did not sign. Moreover, two years later, it reported that it had bought 10835 metric tons during the same period. It is clear, the applicant states, that the inspectors made a mistake when they established the relevant data. For the statement of reasons to be valid on this point, it should have mentioned which purchase invoices were taken into account, so as to make it possible to prove errors in calculation.

2. The applicant has produced purchase invoices for the period February 1957 to November 1958 which are consistent with the tonnages it declared. The defendant did not take them into account and made its own assessment based on the invoices for the sale of ingots and rolled products which had been checked in November 1961. The reasons on which this assessment is based are not given, because no mention is made of the data used by the inspectors, there is no record of the investigation, and the invoices are not specified individually.

3. The applicant calls attention to the fact that there is a contradiction between page 4 of the Decision of 7 April 1965 fixing the tonnage of bought scrap subject to equalization, which states that the ratio between the specific charge of bought scrap consumed and one metric ton of steel sold can be determined at 1:1.08 for ingots and 1:1.12 for rolled products and page 6 of the same decision which states on the other hand that the ratio between the specific charge of bought scrap and one metric ton of crude steel produced can be determined at 1:1.015 when the steel is processed into rolled steel and at 1:1.08 when the ingots are sold directly as such.

4. The applicant states that cross-checking the calculation against the consumption of electricity does not provide the contested decision with a credible and reliable statement of the reasons upon which it was based. This calculation, it states, does not take into account own arisings, remeltings and the amounts of pig-iron used in the furnace at Borgaro.

5. According to the applicant the failure to mention specifically the amounts assessed for the different periods of equalization, to which the different rates of equalization correspond, proves the inadequacy of the statement of the reasons upon which the contested decision is based.

(b). Infringement of Decision No 2/57 (Article 2 (2)) and of Decision No 16/58 (Article 4 (2))

(c). Infringement of Article 81 of the Treaty in conjunction with Article 80

1. Previous proceedings before the Court of Justice disclose either specific estoppels by record so far as this complaint is concerned or admissions of facts by which the parties must be bound.

2. The defendant then invokes the Judgment delivered by the Court on 17 December 1959 in the Case Pont-a-Mousson v High Authority (Rec. 1958-1959, pp. 469 to 471) to the effect that the production of goods intended for the market is not the only activity which amounts to production. The result is, the defendant argues, that, even if the final product is outside the Treaty, the actual production of steel is subject to it. And the applicant does not deny that it produces the steel which then undergoes the appropriate treatment for the manufacture of the different products. The defendant says that plates are expressly mentioned in Annex I to the Treaty. With regard to the dog-spikes, during the period from February 1957 to November 1958, their share of the production was 18 metric tons out of a total of 26000 metric tons.

(d). Infringement of the first paragraph of Article 47 of the Treaty

2. Submission relating to the individual decision fixing the amount of the contribution claimed from the applicant undertaking

3. Submissions relating to the illegality of the general decisions upon which the contested individual decisions are based

(a). Illegality of Decision No 19/60

(b). Illegality of Decisions Nos 18/60 and 20/60 in conjunction with Decision No 7/63

1. Decision No 22/54, which established the equalization scheme, did not mention scrap treated as imported scrap in Article 1, which defines the aims of the equalization scheme, but only mentions it incidentally in Article 2. Decisions Nos 18/60, 20/60 and 7/63 which make scrap treated as imported scrap subject to equalization from the entry in force of Decision No 22/54 therefore infringed Article 1 of this Decision.

2. None of the general decisions governing the matter gives a definition of scrap, which, if it was expensive, was treated as imported scrap. Therefore Decision No 7/63 and the preceding decisions, which take into consideration certain amounts of scrap treated as imported and base the equalization accounts on these amounts, infringe Article 15 of the Treaty so far as concerns scrap treated as imported which was taken into account and included in the calculation, because it does not state the reasons for preparing the equalization accounts in this way.

3. The scrap which the High Authority itself admits was unlawfully included in the equalization as a result of frauds discovered during the operation of the scheme was included in the total amount of scrap made subject to equalization by Decisions Nos 18/60, 20/60 and 7/63.

(c). Illegality of Decision No 7/63

(d). Illegality of Decision No 26/55

1. This provision, which restricts the benefits of such a scheme to economies effected by using Siemens-Martin furnaces (Decision No 26/55) and liquid-charge electric furnaces, (Decision No 3/56), discriminates against undertakings, which, like the applicant undertaking, achieved economies in the use of scrap by consuming much more pig-iron but through the adoption of other production processes and are not therefore able to reap the benefit of the bonus for the scrap saved. The applicant submits that for this reason the contested provision infringes Article 4(b) of the Treaty in conjunction with Decision No 14/55 (Articles 1 and 2(c) and Decision No 2/57) (Articles 1(1) and 2(c)).

2. The before-mentioned decisions infringe Article 15 of the Treaty because the statements of the reasons upon which they are based are defective, as solid-charge furnaces can also effect economies in scrap by making greater use of pig-iron.

3. In support of its submission the applicant produces an expert's report (Schedule 42 to the application) showing that a large amount of pig-iron can be used in the solid-charge electric arc furnace at Borgaro, for the production of steel products by the applicant undertaking.

(c). Illegality of Decisions Nos 7/63, 18/60 and 20/60 fixing the equalization prices and of the decisions upon which they are based

1. The infringement of Articles 3(b) and (c) and 4(b) of the Treaty consists in the fact that the method of determining the equalization price, carried out in accordance with criteria varying according to the equalization period, but invariably with the object of establishing weighted average prices for specific periods of time, does not take into account the prices actually paid by undertakings in the Common Market. As a result the equalization contribution, calculated by subtracting from the average price of imported scrap the average weighted price of internal scrap, is a charge which affects undertakings unequally, because undertakings which bought scrap in the internal market at prices above the average weighted price of internal scrap pay a greater contribution and the undertakings which bought at lower prices pay a smaller contribution. According to the applicant the High Authority should have adopted different methods of calculation, dispensing with the fixing of averages and working on the actual prices payable by the consumers.

2. The infringement of the second paragraph of Article 47 of the Treaty lies in the fact that the High Authority should have made known by adequate publication the entire data used to determine the equalization price and, in particular, the average prices determined during the different periods in the different areas of the Community and the quantities included in the calculation of the weighted averages.

IV —. Procedure

A —. Admissibility

B —. The substance of the case

1. Submissions relating to the individual decision fixing the tonnage of scrap subject to equalization

(a). Inadequate statement of the reasons upon which the decision is based

(b). Inaccuracy of the statement of the reasons upon which the decision is based

(aa). With regard to the period from April 1954 to January 1957, in respect of which the decision refers to the invoices for the purchase of scrap checked by the inspectors on the spot, the simple allegation of the applicant, which consists only of describing the defendant's findings as absurd, cannot be regarded as having any validity. Since from the beginning of the operation of the equalization scheme disputes arose concerning the declarations and compulsory contributions, the applicant was under a duty to keep all the documents required to prove the alleged inaccuracy of the calculations until the questions still in dispute had been finally settled. The defendant's answer to the applicant's allegation that certain invoices came not from the suppliers of scrap but from transport undertakings was that these invoices apparently related to deliveries of scrap by the Waggon Department of the Italian railways, and the applicant has not adduced any evidence to the contrary.

(bb). With regard to the period from February 1957 to November 1958 in respect of which the decision refers to data relating to the sale of finished products the applicant disputes the accuracy of the data used. It submits, in particular, that the decision is based on finished products which fall outside the ambit of the ECSC Treaty.

(cc). The applicant finally criticizes the checking of the consumption of scrap on the basis of the consumption of electricity.

(dd). This submission is therefore unfounded.

(c). Infringement of Articles 4 of Decisions Nos 2/57 and 16/58

(d). Infringement of Articles 80 and 81 of the Treaty

(e). Infringement of Article 47 of the Treaty

2. Submission relating to the individual decision fixing the amount of the equalization contributions

3. Submissions relating to the general decisions upon which the contested individual decisions are based

(a). The determination of the accounting periods

(b). Inclusion in the calculation of scrap treated as imported

(aa). The applicant submits that scrap treated as imported has been wrongly included in the equalization of prices, so that the total equalization charges and therefore the amount of the contributions payable by the applicant have been increased.

(bb). The applicant submits that the equalization calculations are inaccurate, because they include amounts of scrap accepted for equalization as a result of frauds.

(cc). For these reasons this submission is unfounded.

(c). Changes in the amounts of scrap brought into equalization

(d). Economies in the use of scrap by the increased use of pig-iron

(e). The fixing of the equalization prices

(aa). The applicant submits that the equalization prices could not have been validly determined because the prices paid for Community scrap have not been accurately established or checked.

(bb). The applicant also submits that the determination of uniform equalization prices for the whole of the Community had a discriminatory effect because of the differences in the prices of Community scrap which in fact existed inside the Community. It claims that in fact the prices which it paid for scrap inside the market were distinctly higher than the equalization prices and that for this reason it has been placed at a disadvantage by comparison with undertakings which could acquire scrap inside the market at a price lower than the equalization price.

(cc). Finally the applicant pleads infringement of Article 47 of the Treaty on the ground that all the factors necessary to determine the various equalization data have not been published or notified to the undertakings.

(dd). For these reasons this last submission must be dismissed as unfounded.

4. The request by the applicant for measures of inquiry

C —. Costs

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to Articles 3, 4, 15, 33, 36, 47, 80, 81 of Annex I to the Treaty establishing the European Coal and Steel Community; Having regard to the Protocol on the Statute of the Court of Justice annexed to the Treaty establishing the European Coal and Steel Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, especially Article 69, THE COURT hereby:

1 Dismisses Application 30/65 as unfounded;

2 Orders the applicant to bear the costs.