JUDGMENT OF 12. 7. 1979 — CASE 260/78 MAGGI v HAUPTZOLLAMT MÜNSTER

In Case 260/78 REFERENCE to the Court under Article 177 of the EEC Treaty by the Finanzgericht [Finance Court] Münster 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: G. Reischl Registrar: A. Van Houtte

gives the following

JUGDMENT

Facts and Issues

I — Facts and procedure

II — Written observations submitted to the Court by the Commission

III — Oral procedure

Decision

Costs

I —. Facts and procedure

1. The plaintiff in the main action regularly imported sugar from France into Germany, processed it into soup preparations on commission for a French customer and exported the products thus manufactured to France and Belgium.

2. By an order of 6 October 1978 the Finanzgericht Münster stayed proceedings in the case and referred the following questions to the Court of Justice for a preliminary ruling pursuant to Article 177 of the EEC Treaty:

3. The order of the Finanzgericht shows that the plaintiff in the main action argued before it that it is impossible to infer from Regulation (EEC) No 1463/73 of the Commission of 30 May 1973 laying down detailed rules for the application of monetary compensatory amounts (Official Journal 1973, L 146, p. 1) or from Regulation (EEC) No 1380/75 which replaced that regulation, both of which were cited in the decision adopted with regard to the objection lodged by the plaintiff in the main action, that in intra-Community trade inward processing traffic cannot result in exemption from monetary compensatory amounts. That inward processing arrangements within the original Member States of the Community are lawful in principle may already be inferred from Regulation (EEC) No 1515/74 of the Commission of 18 June 1974 on the application of inward processing arrangements in trade between the Member States of the Community as originally constituted and the new Member States, and between the new Member States themselves, for such time as customs duties are levied in such trade (Official Journal 1974, L 163, p. 17). The plaintiff in the main action recalled before the Finanzgericht the wording of the 13th recital in the preamble to Regulation No 1380/75:

4. The order of the Finanzgericht also indicated that the defendant and the intervener in the main action claimed that Regulation No 1515/74 does not apply to the case in question since it constitutes an exceptional system for the transitional period in trade with the new Member States. Likewise, the 13th recital in the preamble to Regulation No 1380/75 does not provide grounds for concluding that inward processing traffic is lawful. In fact products which were not in free circulation within the Community could only be those which did not comply with the conditions laid down in Article 9 (2) of the Treaty. On the other hand, goods coming from a Member State fall within one of the situations referred to in Article 9 (2) of the Treaty.

5. The Finanzgericht emphasizes in the order making the reference that the Community provisions applicable to this case do not expressly settle the question whether it is lawful to authorize inward processing arrangements in intra-Community trade for the purposes of granting exemption from monetary compensation.

6. The order making the reference was received at the Court Registry on 13 December 1978.

II —. Written observations submitted to the Court by the Commission

III —. Oral procedure

1. By an order of 6 October 1978, which was received at the Court of Justice on 13 December 1978, the Finanzgericht Münster submitted, under Article 177 of the EEC Treaty, the following questions for a preliminary ruling:

2. Those questions were submitted in the course of an action between the German customs authorities and a German undertaking concerning the refusal by the former to apply inward processing arrangements to certain quantities of sugar imported from France for use in the manufacture of soups intended for export to France and Belgium. The application of inward processing arrangements had been requested in order to obtain exemption for the imported sugar from monetary compensatory amounts on importation in view of the fact that the finished product did not benefit from the grant of monetary compensation on exportation.

3. In order to reply to the question submitted it is necessary first of all to consider the provisions of Regulation (EEC) No 1380/75 of the Commission of 29 May 1975 laying down detailed rules for the application of monetary compensatory amounts (Official Journal 1975, L 139, p. 37) which, pursuant to Article 21 thereof, entered into force on 1 June 1975.

4. Title II (Article 6) of that regulation lays down detailed rules for the application of monetary compensatory amounts in trade with third countries and Title III (Articles 7 to 15) lays down detailed rules for their application in intra-Community trade. Whilst Article 6 provides that the provisions concerning the charging of customs duties shall apply to monetary compensatory amounts, there is no provision of that nature in Title III. Only certain specific customs provisions are applicable to intra-Community trade and the rules relating to inward processing arrangements are not amongst them.

5. This interpretation of the wording of the provisions is in accordance with the intention underlying them. The representative of the Commission explained in the course of the procedure before the Court that, after the achievement of the customs union had removed the justification for inward processing arrangements in intra-Community trade, the Commission wished to ensure that the arrangements were not re-established when the system of monetary compensatory amounts was introduced. Furthermore, it is clear from Article 2 of Council Directive No 69/73 of 4 March 1969 on the harmonization of provisions laid down by law, regulation or administrative action in respect of inward processing (Official Journal, English Special Edition 1969 (I), p. 75 that those arrangements do not apply to goods which are in free circulation within the Member States. It would thus have been necessary to enact specific provisions if it had been intended to re-introduce the arrangements in the context of the system of monetary compensation.

6. The Commission also pointed out that there is no real economic necessity to exempt the importer from monetary compensatory amounts in circumstances such as those in the present case since the Commission, as a matter of policy, also applies the monetary compensation arrangements to derived products where the proportion of raw materials covered by that system exceeds a reasonable level.

7. In those circumstances the reply to the first question referred to the Court should be that the provisions of Regulation No 1380/75 of the Commission of 29 May 1975 laying down detailed rules for the application of monetary compensatory amounts must be interpreted as meaning that a Member State may not apply its national rules in the matter of inward processing traffic so as to exempt from monetary compensation, in intra-Community trade, goods imported from another Member State in which they are in free circulation.

8. In view of that answer to the first question it is unnecessary to reply to the second and third questions.

9. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable; since these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision as to costs is a matter for that court.

On those grounds, THE COURT (Second Chamber), in answer to the questions submitted to it by the Finanzgericht Münster by an order of 6 October 1978, hereby rules: