Opinion of Mr Advocate General Reischl

Mr President,

Members of the Court,

On 10 August 1981 the Commission notified the applicant in these proceedings of its production quota for Category V and VI products for the third quarter of 1981, pursuant to Decision No 1831/81 (Official Journal L 180, 1. 7. 1981, p. 1), as amended by Decision No 1832/81 (Official Journal L 184, 4. 7. 1981, p. 1), and informed it that of that quota, which amounted to 18057 tonnes, 5079 tonnes could be delivered in the common market.

The applicant has no objection to the above-mentioned production quota, but does object to the restriction on its deliveries in the common market. It informed the Commission in a letter dated 28 August 1981 that until June 1980 60% of its production was for another undertaking and, since that part of its production was disposed of in the common market by the other undertaking, it had not been taken into account in determining the applicant's reference quantity pursuant to Article 8 of Decision No 1831/81. However, the other undertaking for which the applicant had carried out the processing ceased trading in July 1980 and the applicant therefore had to dispose of its production itself in the common market. Since that circumstance had not been taken into account in fixing the delivery quotas, the applicant demanded that its delivery quota should be increased.

The Commission agreed to that demand after Decision No 2804/81 of 23 September 1981 (which was published in Official Journal 278 of 1. 10. 1981, p. 1, and entered into force on the same date) had added the following paragraph to Article 8 of Decision No 1831/81, which contains provisions for determining the reference quantities which are to be used to fix that part of the quotas which may be delivered by each undertaking within the common market;

The Commission stated in a notice dated 4 November 1981 that the reference quantity calculated according to Article 8 (1) of Decision No 1831/81 was causing the applicant grave difficulties because it had not made any exports to non-member countries in its best 12 months of production and deliveries within the common market amounted to only 30.29% of the reference production. In recognition of the fact that in the applicant's case its reference quantity appeared disproportionate in relation to its deliveries in the common market after the processing for another undertaking had ceased, the reference quantity was increased to 90% of the reference production, which resulted in a delivery quota of 15091 tonnes for Category V and VI products in respect of the third quarter of 1981. Furthermore, the Commission stated that the applicant could, in view of the date of the notice of rectification, carry forward the increase allocated to it to the fourth quarter of 1981 in so far as it was not utilized in the third quarter.

In fact, as appeared from subsequent inspections, the applicant did not use its full production quota for the third quarter of 1981, but on the other hand sold 17946 tonnes of its actual production (17966 tonnes) on the Community market. That caused the Commission to commence proceedings against the applicant with a view to the imposition of a penalty and, in a letter dated 25 February 1982, to accuse it of exceeding its delivery quota by 2402 tonnes; that amount arises after taking into account the 3% tolerance laid down in Article 11 (2) of Decision No 1831/81.

The applicant made its observations thereon in a letter dated 9 March 1982. It pointed out that if it had kept to the delivery quota originally laid down its business whould have been ruined. Since the Commission did not agree to an increase in the delivery quota until after the expiry of the third quarter, the applicant was unable to determine during that period the quantities which it could deliver in the common market and that is why — retrospectively — the delivery quota was exceeded. Moreover, the applicant stated that it was ready to compensate for the excess by reducing its deliveries in the common market in another quarter by 2402 tonnes. It repeated that statement at a hearing on 11 June 1982. At the same time it alleged that, since the undertaking for which it processed 60% of its production had gone into liquidation, its production had fallen by some 70 to 80%, causing it grave difficulties, and it pointed out that its deliveries in the common market in the third quarter of 1981 had not in any event reached the level of sales which had been made in normal periods.

Nothing that the applicant said however could alter the Commission's conviction that the applicant had infringed the quota system. Consequently, on 27 November 1982 the Commission adopted a decision pursuant to Article 12 of Decision No 1831/81. The decision stated that the quota system did not allow excess deliveries to be compensated for in subsequent quarters and that the applicant had therefore exceeded its delivery quotas in respect of Categories V and VI by 2402 tonnes. That excess warranted — on the basis of a rate of 75 ECU per tonne of excess — the imposition of a fine of 180150 ECU (the equivalent of LIT 241498281). The applicant was accordingly ordered to pay that amount within two months of receiving notification of the decision and was informed that the amount would be increased by 1% per month of delay in payment.

The decision resulted in an application to the Court on 6 January 1983 for annulment of the notice of 24 November 1981 imposing the fine and, in the alternative, for an appropriate reduction in the fine.

My opinion thereon is as follows :

1. To begin with, the applicant complained in its written observations that notification of the delivery quotas for the third quarter of 1981 was not given until 10 August 1981. It considered that to be unlawful from the point of view of retroactivity. In its view, a measure which was not notified until 10 August 1981 could apply only from that date, especially if it is borne in mind that the annual closure of the applicant's undertaking took place at that time and that there therefore remained only a month in the relevant quarter for organizing production and sales.

2. The applicant further claimed that the restriction of its deliveries to 5079 tonnes, as originally notified, was to be regarded as unlawful because it would have caused the applicant considerable difficulties, since it would have been compelled either to reduce its production in so far as its sale was not allowed or to accumulate stocks, which would have absorbed capital needed for purchases. The delivery quota should have been assessed in relation to the volume of production allowed; in any event it was not permissible to restrict deliveries to that which was actually sold during a reference period when it was apparent that at the relevant time 60% to 70% of the production consisted of processing carried out on behalf of another undertaking and that from July 1980 that processing was no longer carried out because the other undertaking had ceased to trade.

3. With regard to the subsequent increase in its delivery quota notified to it on 4 November 1981, the applicant stressed in the written procedure that notification was not given until after the expiry of the third quarter of 1981. It maintains that it therefore had no means of knowing during the third quarter what its correct delivery quota was and it was therefore surely excusable that, during that period, it should have sold more of its permitted production within the common market than the Commission ultimately allowed. I stated at the hearing that the fact that it assumed in good faith that could sell direct to the common market in place of the firm for which it had previously carried out processing was apparent from a letter which that firm had sent to it on 13 August 1981. Furthermore, as regards the rectification notice of 4 November 1981, it stated at the hearing that not only were inadequate reasons given for restricting the increase to 90% of the reference quantity, but such a restriction was inappropriate and consequently its legal basis unjust.

4. Finally, the applicant considers that there was an inconsistency in the Commission's attitude which is relevant to the appraisal of the decision imposing the fine. That inconsistency lay in the fact that, whilst the rectification notice of 4 November 1981 allowed any unused part of the delivery quota to be carried forward to the fourth quarter of 1981, the Commission was not prepared to allow any excess over the delivery quota in the third quarter of 1981 to be compensated for in a subsequent quarter.

5. Accordingly, since none of the arguments put forward by the applicant is capable of justifying a declaration that the contested decision is void, it now remains for me to consider the claim for a reduction in the fine. This may certainly be considered if a reduced degree of culpability is to be attributed to the undertaking which has infringed the quota system or there are some other mitigating circumstances.

6. If the outcome of these proceedings is that which I consider correct, the decision on costs should not cause any particular problems. The application must be considered successful at least in part and there may be said to be exceptional circumstances within the meaning of Article 69 (3) of the Rules of procedure, because the Commission did not make provision in due time in Decision No 1831/81 for the correct determination of the delivery quotas. Accordingly, it seems appropriate that the Commission should be ordered to pay the applicant's costs.

7. I therefore propose that the Court should allow the application, in so far as the alternative claim for a reduction in the fine imposed on the applicant is concerned, and that — after fixing the fine at an appropriate level — it should order the Commission to pay the costs.

1 Translated from the German.

2 Judgment of 19. 10. 1983 in Case 265/83 Union Sidérurgique du Nord et de l'Est de la Frunce Usinor ν Commission oj the Europem Communities [1983] ECR 3105.

3 Case 348/82 Industrie Riunite Odalesi SpA ν Commission of the European Communities [1983] ECR 1237.

4 Judgment of 19. 10. 1983 in Case 179/82 Lucchini Siderurgica SpA ν Commission of the European Communities [1983] ECR 3083.