JUDGMENT OF 1. 2. 1978 — CASE 78/77 LÜHRS v HAUPTZOLLAMT HAMBURG-JONAS
In Case 78/77 REFERENCE to the Court under Article 177 of the EEC Treaty by the Finanzgericht (Finance Court) Hamburg for a preliminary ruling in the proceedings before that court between
THE COURT composed of: H. Kutscher, President, M. Sørensen and G. Bosco, Presidents of Chambers, A. M. Donner, P. Pescatore, Lord Mackenzie Stuart and A. O'Keeffe, Judges, Advocate General: H. Mayras Registrar: A. Van Houtte
gives the following
JUDGMENT
Facts and issues
I — Facts and procedure
II — Summary of the written observations submitted to the Court
1. Question 1 (protection of legitimate expectation)
2. Question 2 (a) (the exchange rate)
3. Question 2 (b) (discrimination resulting from the application of a fixed exchange rate)
III — Oral procedure
Decision
Costs
I —. Facts and procedure
1. Owing to a decrease in the areas under cultivation and unfavourable weather conditions in 1975 production of potatoes fell sharply in the Community and in other European countries. Considerable supply difficulties and price increases resulted from this in the autumn of 1975 and especially at the beginning of 1976.
2. On 20 February 1976, Firma Johann Lührs exported in all 121000 kg of potatoes falling within subheading 07.01-A-III of the Common Customs Tariff (CCT) to Sweden. On 3 and 9 March and also on 30 April 1976 the Hauptzollamt (Principal Customs Office) Hamburg-Jonas issued to that firm assessments to the export tax amounting to DM 108258.60. The charge to that tax was based on the aforesaid Council Regulation (EEC) No 348/76.
II —. Summary of the written observations submitted to the Court
1. Question 1 (protection of legitimate expectation)
2. Question 2 (a) (the exchange rate)
3. Question 2 (b) (discrimination resulting from the application of a fixed exchange rate)
III —. Oral procedure
1. By an order of 16 June 1977 which was received at the Court on 6 July 1977, the Finanzgericht Hamburg referred to the Court of Justice for a preliminary ruling under Article 177 of the Treaty two questions on the validity and interpretation of Council Regulation No 348/76 of 17 February 1976 on measures to be taken owing to the difficulties affecting potato supplies (OJ L 43, p. 14) and of Commission Regulation No 890/76 of 14 April 1976 providing for exemption in certain cases from the tax on exports of potatoes (OJ L 191, p. 40).
2. These questions have been raised in the context of a dispute between the Hauptzollamt Hamburg-Jonas and a haulier who after exporting 121000 kg of potatoes to Sweden on 20 February 1976 was assessed to tax under Regulation No 348/76, to the amount of DM 108256.60 which was subsequently increased by DM 2456.30.
3. The first question asks whether Regulation No 348/76 in conjunction with Regulation No 890/76, with special reference to the rate of tax levied on the export of potatoes, infringes the principle of the protection of legitimate expectation, in that it does not provide for any general rule exempting from the said tax exports of potatoes delivered under contracts concluded before 17 February 1976.
4. It appears from the case file that on 10 and 16 February 1976 the plaintiff in the main action sold at fixed prices in Sweden potatoes which it had bought in the Netherlands.
5. The Council adopted Regulation No 348/76 owing to the shortage brought about by the very poor potato harvest in 1975, which caused a very sharp increase in prices and supply difficulties in some regions of the Community and threatened to cause an increase in the cost of living.
6. It follows from the stated circumstances that Regulation No 348/76 was adopted pursuant to an overriding public interest, which required that the rules adopted should enter into force immediately.
7. Nor could the level of the export tax surprise informed circles, since at the time when Regulation No 348/76 was adopted import subsidies were already being granted by several non-member countries, such as Sweden which appears to have granted subsidies up to the equivalent of 18 units of account per 100 kg.
8. Pursuant to Article 1 (2) of Regulation No 348/76, the Commission authorized Member States by its Regulation No 890/76 to exempt from the expon tax exports … to the non-member countries or territories listed in the Annex hereto effected before 3 May 1976, provided that such exports are effected pursuant to contracts concluded before 17 February 1976.
9. The interim measure thus adopted can also not be regarded as being more restrictive than is required by the principle of the protection of legitimate expectation, since only traders who had been relying upon the continued existence of well-established, customary economic relations could have had any such expectation.
10. Therefore the appropriate answer is that consideration of the first question raised had disclosed no factor of such a kind as to affect the validity of Regulations No 348/76 and No 890/76.
11. Question 2 (a) asks whether, for the purpose of converting the tax on exports expressed in units of account, the exchange rate applicable to customs duty in Part I, Title 1, C. 3 of Regulation No 950/68 of the Council of 28 June 1968 on the Common Customs Tariff, (JO, L 172) or the exchange rate specified in Regulation No 475/75 of the Council of 27 February 1975 on the exchange rates to be applied in agriculture (OJ L 52, p. 28) is to be applied.
12. Regulation No 348/76 does not contain any express provision as to the exchange rate to be applied for the purpose of converting into national currency the tax of 25 units of account which it laid down.
13. Thus the appropriate answer is that in view of the uncertainties inherent in Regulation No 348/76, natural justice demands that for the purpose of converting the tax on exports into national currency the exchange rate which at the material time was less onerous for the taxpayer concerned should be applied.
14. Question 2 (b) asks whether the fixing of the tax at 25 units of account per 100 kg infringes the prohibition on discrimination laid down in Article 7 of the Treaty in so far as in this matter the currency situation in the exporting country compared to that in the other Member States has not been offset or has been insufficiently offset.
15. There is no need to examine in greater depth the general question thus raised and to consider the extent to which it can and must be taken into account in Community legislation, because it appears from the information supplied by the Commission that as the introduction of the export tax had a general prohibitive effect the tax was applied only in a few isolated instances.
16. Thus consideration of this question has also disclosed no factor of such a kind as to affect the validity of Regulation No 348/76.
17. In view of the foregoing, it does not appear feasible within the framework of the existing rules to statisfy the requirements of natural justice in possibly a few special cases, since provision can be made for such requirements only by the Community legislature through appropriate hardship clauses (Härteklauseln) of the kind found in German revenue law and in that of other Member States.
18. The costs incurred by the Council and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable.
On those grounds, THE COURT in answer to the question referred to it by the Finanzgericht Hamburg by an order of 16 June 1977, hereby rules:
1 Consideration of the questions raised has disclosed no factor of such a kind as to affect the validity of Regulations Nos 348/76 and 890/76.
2 In view of the uncertainties inherent in Council Regulation No 348/76, for the purpose of converting the tax on exports into national currency, of the two exchange rates specified respectively in Regulation No 950/68 of the Council and in Regulation No 475/75 of the Council, the one should be applied which at the material time was the less onerous for the taxpayer concerned.