Court of Justice of the European Communities (including Court of First Instance Decisions)

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1 . POLICY OF THE EEC - COMMON RULES - TAX PROVISIONS - INTERNAL TAXATION IMPOSED BY ONE MEMBER STATE ON PRODUCTS COMING FROM OTHER MEMBER STATES - SIMILARITY BETWEEN SUCH PRODUCTS - CONCEPT
( EEC TREATY, ARTICLE 95, FIRST PARAGRAPH )
2 . POLICY OF THE EEC - COMMON RULES - TAX PROVISIONS - INTERNAL TAXATION IMPOSED BY ONE MEMBER STATE ON PRODUCTS COMING FROM OTHER MEMBER STATES - PRINCIPLE OF NON-DISCRIMINATION - APPLICATION
( EEC TREATY, ARTICLE 95, FIRST PARAGRAPH )

1 . PRODUCTS WHICH FALL UNDER THE SAME CLASSIFICATION FOR TAX PURPOSES MUST BE CONSIDERED AS " SIMILAR " WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY .
2 . THE PRINCIPLE OF NON-DISCRIMINATION CONTAINED IN ARTICLE 95 IS VALID INDEPENDENTLY OF THE EFFECT OF FACTORS OTHER THAN TAXATION ON THE RESPECTIVE PRODUCTION COSTS OF THE PRODUCTS TO BE COMPARED .

IN CASE 28/69
COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISER, GIUSEPPE MARCHESINI, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ITS LEGAL ADVISER, EMILE REUTER, 4 BOULEVARD ROYAL, APPLICANT,
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GOVERNMENT OF THE ITALIAN REPUBLIC, REPRESENTED BY ADOLFO MARESCA, MINISTER PLENIPOTENTIARY, ACTING AS AGENT, ASSISTED BY PIETRO PERONACI, ASSISTANT TO THE AVVOCATO GENERALE DELLO STATO ( STATE ADVOCATE-GENERAL ), WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE EMBASSY OF THE ITALIAN REPUBLIC, DEFENDANT,

APPLICATION UNDER THE SECOND PARAGRAPH OF ARTICLE 169 OF THE EEC TREATY FOR A DECLARATION THAT THE ITALIAN REPUBLIC HAS FAILED TO FULFIL AN OBLIGATION UNDER ARTICLES 95 AND 96 OF THE TREATY BY IMPOSING ON VARIOUS PRODUCTS IMPORTED FROM OTHER MEMBER STATES AN EXCISE DUTY EXCEEDING THAT IMPOSED ON SIMILAR DOMESTIC PRODUCTS, AND BY GRANTING ON EXPORTS OF VARIOUS NATIONAL PRODUCTS A REFUND OF THE SAID DUTY IN EXCESS OF THE SUM ACTUALLY PAID,

1 HAVING DELIVERED A REASONED OPINION ON 17 JANUARY 1967 THE COMMISSION, BY AN APPLICATION LODGED ON 24 JUNE 1969, APPLIED TO THE COURT UNDER ARTICLE 169 OF THE EEC TREATY FOR A DECLARATION THAT THE ITALIAN REPUBLIC HAD FAILED IN ITS OBLIGATIONS UNDER ARTICLES 95 AND 96 OF THE TREATY .
THE FIRST SUBMISSION
2 THE COMMISSION CLAIMS THAT THE ITALIAN LEGISLATION IN FORCE WHEN THE APPLICATION WAS MADE CONTRAVENED ARTICLE 95, BY IMPOSING ON COCOA POWDER IMPORTED FROM OTHER MEMBER STATES AN EXCISE DUTY ( 312.50 LIRE PER KILOGRAMME ) WHICH WAS HIGHER THAN THAT IMPOSED ON THE SAME PRODUCT OBTAINED IN ITALY BY MILLING COCOA BEANS IMPORTED DUTY-FREE UNDER THE TEMPORARY IMPORT SYSTEM ( 200 LIRE PER KILOGRAMME ).
3 THE DEFENDANT CONSIDERS THAT AS A RESULT OF AMENDMENTS MADE TO THE ITALIAN LEGISLATION IN THE COURSE OF THE PROCEEDINGS THE COMMISSION SHOULD BE DEEMED TO HAVE WITHDRAWN THIS COMPLAINT . IT IS HOWEVER CLEAR FROM THE PROCEDURAL DOCUMENTS THAT THE COMMISSION HAS MAINTAINED ITS CONCLUSIONS IN CONNEXION WITH THIS SUBMISSION .
4 ALTHOUGH THE ABOVE-MENTIONED FIGURES ARE NOT DISPUTED THE DEFENDANT CLAIMS THAT THE COMMISSION IS MAKING A COMPARISON BETWEEN PRODUCTS WHICH ARE NOT " SIMILAR " AS REQUIRED BY ARTICLE 95, THAT IS, COCOA POWDER CONTAINING LESS THAN 1 PER CENT OF BUTTER AND POWDER RICHER IN OILS AND FATS .
5 THE COMPARISON MADE BY THE COMMISSION IS BASED ON ARTICLE 13 OF DECREE LAW NO 50 OF 11 MARCH 1950 AND ARTICLE 2 OF LAW NO 291 OF 25 MAY 1950 . THE SAID ARTICLE 13 CONCERNING IMPORTED POWDER DOES NOT MAKE A DISTINCTION ACCORDING TO THE OIL AND FAT CONTENT OF PRODUCTS . ALTHOUGH ARTICLE 2 OF LAW NO 291 CONCERNING POWDER PRODUCED IN ITALY MAKES EXPRESS REFERENCE ONLY TO A PRODUCT WITH A CONTENT OF LESS THAN 1 PER CENT OF OILS AND FATS IT NEVERTHELESS FOLLOWS THAT THE ALLEGED DISCRIMINATION EXISTED AT LEAST WITH REGARD TO THAT PRODUCT .
6 FURTHERMORE, PRODUCTS SUCH AS THOSE IN QUESTION WHICH FALL UNDER THE SAME CLASSIFICATION FOR TAX PURPOSES MUST BE CONSIDERED AS " SIMILAR " WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 95 .
7 CONSEQUENTLY THE ITALIAN GOVERNMENT' S OBJECTION IS UNFOUNDED .
8 THE ITALIAN GOVERNMENT FURTHER CLAIMS THAT ACCOUNT SHOULD HAVE BEEN TAKEN, IN RESPECT OF COCOA POWDER PRODUCED IN ITALY, OF THE HIGHER MANUFACTURING LOSSES AND COSTS INVOLVED IN MILLING .
9 HOWEVER, NO EVIDENCE OF THE RELEVANCE OF THIS ARGUMENT TO THE PRESENT CASE HAS BEEN ADDUCED . MOREOVER, THE PRINCIPLE OF NON-DISCRIMINATION CONTAINED IN ARTICLE 95 IS VALID INDEPENDENTLY OF THE EFFECT OF FACTORS OTHER THAN TAXATION ON THE RESPECTIVE PRODUCTION COSTS OF THE PRODUCTS TO BE COMPARED .
10 CONSEQUENTLY THE ITALIAN REPUBLIC HAS FAILED TO FULFIL ITS OBLIGATION UNDER ARTICLE 95 OF THE TREATY BY IMPOSING ON COCOA POWDER IMPORTED FROM OTHER MEMBER STATES AN EXCISE DUTY IN EXCESS OF THAT IMPOSED ON THE SIMILAR PRODUCT PRODUCED IN ITALY BY MILLING COCOA BEANS IMPORTED DUTY-FREE UNDER THE TEMPORARY IMPORT SYSTEM .
THE SECOND SUBMISSION
11 THE COMMISSION FURTHER COMPLAINS THAT THE ITALIAN REPUBLIC HAS FAILED TO FULFIL ITS OBLIGATION UNDER ARTICLE 95 IN THAT ITS LEGISLATION IMPOSES ON COCOA POWDER, COCOA BUTTER AND SHELLS AND HUSKS IMPORTED FROM OTHER MEMBER STATES AN EXCISE DUTY WHICH IS IN EXCESS OF THAT IMPOSED ON SIMILAR PRODUCTS PRODUCED IN ITALY BY THE MILLING OF COCOA BEANS IMPORTED FOR DOMESTIC CONSUMPTION .
12 IT IS NOT DISPUTED THAT THIS DIFFERENCE EXISTS AND THAT ITS AMOUNT IS IDENTICAL WITH THE DUTY IMPOSED ON SHELLS AND HUSKS IMPORTED FROM OTHER MEMBER STATES .
13 IT IS MOREOVER AGREED THAT SUCH PRODUCTS, WHETHER IMPORTED OR PRODUCED BY THE ITALIAN PROCESSING INDUSTRY, ARE EXEMPT FROM ITALIAN EXCISE DUTY IF THEY ARE USED FOR THE EXTRACTION OF THEOBROMINE OR IN THE MANUFACTURE OF COFFEE SUBSTITUTES .
14 CONSEQUENTLY THE ALLEGED INFRINGEMENT COULD OCCUR ONLY IF THE ITALIAN REPUBLIC IN FACT IMPORTED SHELLS AND HUSKS INTENDED FOR PURPOSES OTHER THAN THOSE FOR WHICH THE EXEMPTION IS AVAILABLE . THE ITALIAN GOVERNMENT HAS STATED THAT SINCE THE LEGISLATURE HAS PROHIBITED THE USE OF THE PRODUCTS IN QUESTION FOR THE PRODUCTION OF COCOA AND CHOCOLATE IT ENDEAVOURED TO DISCOURAGE SUCH USE BY IMPOSING A HIGH EXCISE DUTY ON THOSE PRODUCTS, THUS ENTIRELY PREVENTING THE USE OF SHELLS AND HUSKS FOR PURPOSES OTHER THAN THOSE FOR WHICH THE EXEMPTION IS AVAILABLE .
15 BY IMPOSING A DUTY OF 250 OR 180 LIRE ON PRODUCTS WITH A VERY LOW COMMERCIAL VALUE THE DEFENDANT HAS IN FACT PRECLUDED THE SALE OF THOSE PRODUCTS FOR PURPOSES OTHER THAN THOSE FOR WHICH IT HAS PROVIDED FOR EXEMPTION .
16 IT IS THEREFORE UNNECESSARY TO ASCERTAIN WHETHER THE SHELLS AND HUSKS MIGHT STILL IN EXCEPTIONAL CASES BE USED FOR PURPOSES OTHER THAN THOSE MENTIONED ABOVE .
17 IT MUST CONSEQUENTLY BE FOUND THAT SINCE THE COMMISSION HAS FAILED TO PROVE THE INFRINGEMENT ALLEGED IN ITS SECOND SUBMISSION ITS APPLICATION SHOULD BE DISMISSED WITH REGARD TO THIS POINT .
THE THIRD SUBMISSION
18 SINCE THE COMMISSION HAS FORMALLY WITHDRAWN THIS SUBMISSION IT IS UNNECESSARY TO GIVE A RULING ON IT .

19/20 UNDER THE TERMS OF ARTICLE 69 ( 3 ) OF THE RULES OF PROCEDURE, WHERE EACH PARTY SUCCEEDS ON SOME AND FAILS ON OTHER HEADS THE COURT MAY ORDER THE PARTIES TO BEAR THEIR OWN COSTS IN WHOLE OR IN PART . THIS PROVISION IS APPLICABLE IN THE PRESENT CASE .

THE COURT
HEREBY :
1 . RULES THAT BY IMPOSING ON COCOA POWDER IMPORTED FROM OTHER MEMBER STATES AN EXCISE DUTY IN EXCESS OF THAT IMPOSED ON THE SIMILAR PRODUCT PRODUCED IN ITALY BY MILLING COCOA BEANS IMPORTED DUTY-FREE UNDER THE TEMPORARY IMPORT SYSTEM, THE ITALIAN REPUBLIC HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 95 OF THE EEC TREATY;
2 . DISMISSES THE SECOND SUBMISSION;
3 . ORDERS THE PARTIES TO BEAR THEIR OWN COSTS .