Opinion of Mr Advocate General Mischo

Mr President,

Members of the Court,

By a decision of 7 May 1985 the Bundesfinanzhof has referred to the Court for a preliminary ruling a question on the interpretation of Council Regulation (EEC) No 1224/80 of 28 May 1980 on the valuation of goods for customs purposes (Official Journal 1980, L 134, p. 1).

The facts of the case are the following:

On 30 December 1980 the respondent in the main proceedings imported a consignment of frozen beef from Argentina. It was found that the goods had been damaged by thawing which, according to experts, had occurred during loading in Argentina and had reduced the value of the whole shipment by 17%. The defendant, who had already paid the purchase price to its supplier and considered that it was for practical purposes impossible to bring a claim for damages against the supplier, was indemnified by its transport insurers for a diminution in value of 14%, so that it had to bear 3% itself. The customs value was nevertheless fixed on the basis of the transaction value (including the cost of shipping and insurance).

The defendant considers that that valuation is incorrect: it takes the view that the diminution in value should be taken into account in assessing the customs value.

After an unsuccessful administrative appeal the respondent was successful before the Finanzgericht, on the basis of the same arguments. The court held that it was necessary to interpret by analogy the term transaction value as defined in Article 3 of Regulation (EEC) No 1224/80, which is worded as follows:

The court went on to hold that its view was supported by the second sentence of Article 4 of Commission Regulation (EEC) No 1495/80 (as amended by Commission Regulation No 1580/81, Official Journal 1981, L 154, p. 36), which provides as follows:

The Hauptzollamt Itzehoe brought an appeal on a point of law against that judgment. It considers that under Regulation No 1224/80 the only point to be taken into account is the fact that the respondent paid the whole of the invoice price; in its view none of the applicable provisions permit a diminution in value resulting from a defect in the goods to be taken into account. The second sentence of Article 4 of Regulation No 1495/80 cannot be taken into account since that provision, according to Article 2 of Regulation No 1580/81, came into force only in June 1981.

The Bundesfinanzhof seems inclined, on the basis of the wording of Regulation No 1224/80, to uphold the Hauptzollamt's argument; however, it has doubts regarding that interpretation, in view of its economically absurd result. For that reason, it stayed the proceedings and asked the Court to give a preliminary ruling on the following question:

On that question I should like to make the following remarks:

1. The general principle established by Council Regulation No 1224/80 of 28 May 1980 on the valuation of goods for customs purposes is the following (Article 2 (1]:

2. In opposition to that interpretation, however, the Commission argues that Article 3 cannot be applied in the case of damage affecting the whole of a consignment, because the price actually paid (the transaction value) will have been agreed upon not for damaged goods, such as those delivered, but for undamaged goods.

1 Translated from the French.