JUDGMENT OF 30. 11. 1978 — CASE 87/78 WELDING v HAUPTZOLLAMT HAMBURG-WALTERSHOF

In Case 87/78 REFERENCE to the Court under Article 177 of the EEC Treaty by the IVth Senate of the Finanzgericht (Finance Court) Hamburg for a preliminary ruling in the action pending before that court between

THE COURT (Second Chamber) composed of: Lord Mackenzie Stuart, President of Chamber, M. Sørensen and A. Touffait, Judges, Advocate General: F. Capotorti Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and procedure

II — Summary of the written observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice

Ill — Oral procedure

Decision

Costs

I —. Facts and procedure

1. According to Article 15 (5) of Regulation No 3330/74 of the Council (the former Article 14 (5) of Regulation No 1009/67) there is a common organization of the market in sugar entailing the charging of a levy which must be calculated as a flat rate on the basis of the actual content, or the content expressed as sucrose and of the levy on white sugar. The first subparagraph of Article 7 (2) of Regulation No 837/68 lays down the method for determining the sucrose content, including other sugars expressed as sucrose. By way of derogation from that subparagraph the second subparagraph of paragraph 2 makes provision for determining the sucrose content of products containing less than 85 % sucrose by ascertaining the dry matter content and for fixing the method of calculating that content which is to be expressed as sucrose by multiplying by the coefficient 1.

2. Although the powers conferred by the Council on the Commission must in principle be given a wide interpretation (judgment of the Court of 30 October 1975 in Case 23/75 [1975] 2 ECR 1279) it may be wondered whether Article 15 (5) of Regulation No 3330/74, an enabling provision establishing the power of the Commission, permits, in connexion with a product to which the relevant common organization of the market applies, calculation of the levy otherwise than on the basis of the sucrose content and the levy on white sugar; the second subparagraph of Article 7 (2) of Regulation No 837/68 renders subject to the levy applicable to sugar constituents of a product other than those mentioned in the rule for the treatment, for example, of dextrin falling under tariff heading 35.05.

3. This may constitute inequality and thus amount to discrimination within the meaning of the second subparagraph of Article 40 (3) of the EEC Treaty since lighter charges are imposed on separate imports of dextrin and maltose than on imports of a mixture of the two products.

4. The validity of the second subparagraph of Article 7 (2) must also be questioned because no reasons are given for the derogation which it constitutes from the first subparagraph (judgment of 4 July 1963 in Case 24/62 [1963] ECR 63).

5. If this provision is invalid it is important to establish which, of the Commission or the national authorities, can prescribe the methods for fixing the sucrose content of a product constituting the subject-matter of a dispute.

1. Is the second subparagraph of Article 7 (2) of Regulation (EEC) No 837/68 of the Commission of 28 June 1968 as amended by Regulation (EEC) No 878/69 of the Commission of 12 May 1969 invalid because, by way of derogation from the first subparagraph of Article 7 (2) of Regulation (EEC) No 837/68, the sucrose content, including other sugars expressed as sucrose, of products containing less than 85 % sucrose and invert sugar expressed as sucrose is to be determined without regard to the actual sucrose content including other sugars expressed as sucrose by ascertaining the dry matter content?

2. If Question 1 is answered in the affirmative: In calculating the levy and monetary compensation in cases under the second subparagraph of Article 7 (2) of Regulation (EEC) No 837/68 are the national authorities entitled to adopt as a basis the actual sucrose content, including other sugars expressed as sucrose, determined by methods of analysis other than those laid down by the first subparagraph of Article 7 (2) or is it for the Community legislature to specify the method of analysis for the cases covered by the second subparagraph of Article 7 (2)?

II —. Summary of the written observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice

Ill —. Oral procedure

1. By an order of 15 March 1978 which was received at the Court on 29 March 1978 the Finanzgericht Hamburg referred to the Court, pursuant to Article 177 of the EEC Treaty, for a preliminary ruling a question on the validity of the second subparagraph of Article 7 (2) of Regulation No (EEC) 837/68 of the Commission of 28 June 1968 on detailed rules for the application of levies on sugar (Official Journal, English Special Edition 1968 (I), p. 221) as amended by Regulation (EEC) No 878/69 of the Commission of 12 May 1969 (Official Journal, English Special Edition 1969 (I), p. 216).

2. That reference was made in the course of a dispute between the Hauptzollamt Hamburg and the Welding undertaking concerning the method of calculating the dry matter content expressed as sucrose contained in maltrin 10 and maltrin 20 which determines the amount of the levy payable in respect of customs clearance on the importation of these products.

3. The defendant, in calculating the amount of the levy, employed the method prescribed by the second subparagraph of Article 7 (2) of Regulation No 837/68 as amended by Regulation No 878/69 whereby the sucrose content, including other sugars expressed as sucrose, of products containing less than 85 % sucrose and invert sugar expressed as sucrose, is determined by ascertaining the dry matter content; this latter content is determined according to the specific gravity of the solution diluted in a proportion of one to one by weight and, for solid products, by drying and when expressed as sucrose by multiplying by the coefficient 1.

4. The national court has doubts regarding the validity of the method of determining the criteria adopted for calculating the levy which entails extending the levy applicable to sugar to the constituents of a product other than those mentioned in the enabling provision in Article 14 (5) of Regulation No 1009/67/EEC of the Council of 18 December 1967 on the common organization of the market in sugar (Official Journal, English Special Edition 1967, p. 304) as amended by Article 15, (5) of Regulation No 3330/74 of the Council of 19 December 1974 (Official Journal L 359, p. 1) which provides that the levy shall be calculated, where appropriate, at a standard rate on the basis of the sucrose content (including other sugars expressed as sucrose) of the product concerned.

5. According to the provisions in force since products such as maltrin 10 and maltrin 20 have a maltose, reducing sugar, content exceeding 10 % they fall, according to the second sentence of Note 2 to Chapter 35 of the Common Customs Tariff, in heading 17.02 and not in heading 35.05 which covers products having a reducing sugar content not exceeding 10 %.

6. Since Article 15 (5) of Regulation (EEC) No 3330/74 provides that the levy on the products listed in Article 1 (1) (d) shall be calculated, where appropriate, as a flat rate on the basis of the sucrose content (including other sugars expressed as sucrose) of the product concerned and the levy on white sugar the use of the words on the basis of shows that the Council has ruled out the need, in all cases, for the actual sucrose content of the various products to correspond exactly to the amount of the levy applicable to them.

7. In the present case the second subparagraph of Article 7 (2) of Regulation No 837/68 provides that the calculation of the levy on products containing less than 85 % sucrose shall be based on the ascertainment of the sucrose content, including other sugars expressed as sucrose.

8. With regard to the complaint of infringement of the second subparagraph of Article 40 (3) of the Treaty, on the ground that traders who import the constituents of the product separately, that is to say dextrin and maltose, pay lower duties than traders who import the said constituents ready mixed, it must be observed on the one hand that such alleged unfavourable treatment of importers of malto-dextrose in relation to those who import maltose or dextrin separately does not constitute a discrimination at the expense of specified persons or of a group or category and that anyone may freely choose to import the two substances separately and on the other that the result complained of does not originate from the second subparagraph of Article 7 (2) of Regulation (EEC) No 837/68 but from the definition of dextrin according to the Common Customs Tariff.

9. The national court lastly expresses doubts on the validity of the second subparagraph of Article 7 (2) of Regulation (EEC) No 837/68 since no reasons are stated for the derogation which this provision entails from the rules contained in the foregoing subparagraph.

10. The extent of the duty to provide a statement of reasons prescribed in Article 190 of the Treaty, depends on the nature of the measure in question.

11. The present case concerns the implementation of an existing regulation on detailed rules for the application of levies on sugar.

12. Furthermore it does not appear from the file that the Court of Justice should of its own motion find any other ground of invalidity and consideration of the file has disclosed no factor of such a kind as to affect the validity of Article 7 (2) of Regulation (EEC) No 837/68 of the Commission of 28 June 1968 on detailed rules for the application of levies on sugar as amended by Regulation (EEC) No 878/69 of the Commission of 12 May 1969.

13. Since the reply to the first question submitted by the Finanzgericht Hamburg is in the negative there is no occasion to reply to the second question.

14. The costs incurred by the Commission of the European Communities which has submitted observations to the Court are not recoverable.

On those grounds, THE COURT (Second Chamber) in answer to the questions referred to it by the Finanzgericht Hamburg by an order of 15 March 1978 hereby rules: