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

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1 . TAX PROVISIONS - INTERNAL TAXATION - DOMESTIC PRODUCTS AND IMPORTED PRODUCTS - IDENTICAL RATE - STAGE OF PROCESSING OF THE PRODUCTS - DIFFERENTIAL BASIS - DISCRIMINATION
( EEC TREATY, ARTICLE 95 )
2 . MEMBER STATES - OBLIGATIONS - FAILURE TO FULFIL - LIABILITY - EXTENT - CONSTITUTIONALLY INDEPENDENT INSTITUTIONS
( EEC TREATY, ARTICLE 169 )

1 . A SINGLE FLAT-RATE TRANSFERENCE DUTY WHICH IS IMPOSED ON NATIONAL PRODUCTS AND IMPORTED PRODUCTS AT THE SAME RATE, BUT HAS THE EFFECT, BY REASON OF THE DIFFERENT BASIS ON WHICH IT IS APPLIED, OF TAXING IMPORTED PRODUCTS IF THEY HAVE BEEN SUBJECTED TO PROCESSING, MORE HEAVILY THAN NATIONAL PRODUCTS AT A SIMILAR STAGE OF PROCESSING, IS OF A DISCRIMINATORY NATURE AND IS CONTRARY TO THE FIRST PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY .
2 . THE LIABILITY OF A MEMBER STATE UNDER ARTICLE 169 ARISES WHATEVER THE AGENCY OF THE STATE WHOSE ACTION OR INACTION IS THE CAUSE OF THE FAILURE TO FULFIL ITS OBLIGATIONS EVEN IN THE CASE OF A CONSTITUTIONALLY INDEPENDENT INSTITUTION .

IN CASE 77/69
COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISER, CESARE MAESTRIPIERI, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICES OF ITS LEGAL ADVISER, EMILE REUTER, 4, BOULEVARD ROYAL, APPLICANT,
V
KINGDOM OF BELGIUM, REPRESENTED BY GILBERT DE KLERCK, ACTING DIRECTOR OF ADMINISTRATION AT THE MINISTRY FOR FOREIGN AFFAIRS AND EXTERNAL TRADE, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE BELGIAN EMBASSY, DEFENDANT,

APPLICATION FOR A DECLARATION THAT THE KINGDOM OF BELGIUM HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 95 OF THE EEC TREATY IN RESPECT OF THE FLAT-RATE TRANSFERENCE DUTY ON WOOD,

1 BY AN APPLICATION LODGED AT THE REGISTRY ON 22 DECEMBER 1969, THE COMMISSION MADE AN APPLICATION TO THE COURT UNDER ARTICLE 169 OF THE TREATY FOR A DECLARATION " THAT THE KINGDOM OF BELGIUM, BY APPLYING THE SAME RATE LAID DOWN IN ARTICLE 31 - 14 OF THE GENERAL REGULATION ON DUTIES ASSIMILATED TO STAMP DUTIES ( ROYAL DECREE OF 3 MARCH 1927 ) TO HOME-GROWN WOOD TRANSFERRED STANDING OR FELLED AND TO IMPORTED WOOD CALCULATED ON ITS VALUE AT THE TIME OF THE DECLARATION OF ENTRY FOR HOME USE, HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 95 OF THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY ".
2 UNDER ARTICLE 31 - 14 OF THE ROYAL DECREE OF 3 MARCH 1927 INTRODUCING THE GENERAL REGULATION ON DUTIES ASSIMILATED TO STAMP DUTIES AS AMENDED IN PARTICULAR BY THE ROYAL DECREE OF 27 DECEMBER 1965, A SINGLE FLAT-RATE DUTY OF 14 PER CENT IS LEVIED ON THE TRANSFER OF HOME-GROWN OR IMPORTED WOOD .
3 ALTHOUGH THE RATE OF TAX IS UNIFORM FOR ALL WOOD WHATEVER ITS ORIGIN, THE BASIS AND THE DETAILED METHODS OF LEVYING THE DUTY ARE DIFFERENT FOR HOME-GROWN WOOD AND FOR PRODUCTS COMING FROM ABROAD .
4 IN RESPECT OF THE FORMER, THE FLAT-RATE DUTY IS PAID, ACCORDING TO ARTICLE 31 - 14 ( 1 ) ( 1 ) AND ARTICLE 31 - 14 ( 3 ) OF THE ROYAL DECREE OF 3 MARCH 1927, AT THE TIME OF SALE BY THE PRODUCER OF WOOD TRANSFERRED STANDING OR FELLED .
5 ON THE OTHER HAND, IN RESPECT OF IMPORTED PRODUCTS, ASSESSMENT TAKES PLACE, IN ACCORDANCE WITH PARAGRAPH 3 ( 1 ) OF THE SAME ARTICLE, AT THE TIME OF THE DECLARATION OF ENTRY FOR HOME USE, TAKING INTO ACCOUNT THE MORE OR LESS ADVANCED STATE OF PROCESSING, DEFINED BY PARAGRAPH 1 ( 2 ) ( A ) TO ( J ).
6 ACCORDING TO THE WORDING OF PARAGRAPH 3 ( 1 ), " THE FLAT-RATE DUTY SHALL COVER ALL SUBSEQUENT TRANSFERS UNTIL THE ARRIVAL OF THE GOODS IN THE HANDS OF THE CONSUMER OR THE PERSON WHO SUBMITS THEM TO AN INDUSTRIAL PROCESS ", IT BEING UNDERSTOOD HOWEVER THAT " PROCESSING OF ONE OF THE PRODUCTS ENUMERATED IN PARAGRAPH 1 INTO ANOTHER OF THOSE PRODUCTS SHALL NOT BE REGARDED AS INDUSTRIAL PROCESSING ".
7 IT FOLLOWS FROM THIS SYSTEM THAT, BECAUSE OF THE FACT THAT THE FLAT-RATE DUTY IS PAID AT THE TIME OF THE TRANSFER OF STANDING OR FELLED WOOD, HOME-GROWN WOOD IS EXEMPTED FROM ALL SUBSEQUENT CHARGES ARISING OUT OF THE INCREASE IN VALUE DUE TO THE PROCESSING DEFINED BY THE ROYAL DECREE .
8 THE SAME TREATMENT IS NOT EXTENDED TO IMPORTED WOOD WHICH, UNDER THE TERMS OF THE SAME DECREE, IS TAXED IN RELATION TO ITS MORE ADVANCED STATE OF PROCESSING AND ASSESSED CONSEQUENTLY ON THE BASIS OF A HIGHER VALUE THAN THAT OF WOOD TRANSFERRED STANDING OR FELLED .
9 THE SYSTEM ESTABLISHED BY ARTICLE 31 - 14 OF THE ROYAL DECREE OF 3 MARCH 1927 THUS HAS, AS A RESULT OF THIS DIFFERENTIATION IN THE BASIS OF THE SINGLE FLAT-RATE DUTY, THE EFFECT OF TAXING IMPORTED WOOD, IF IT HAS ALREADY UNDERGONE PROCESSING, MORE HEAVILY THAN NATIONAL PRODUCTS IN A SIMILAR STAGE OF PROCESSING .
10 IT APPEARS CONSEQUENTLY THAT, ALTHOUGH THE RATE OF TAX IS APPARENTLY A UNIFORM ONE, THE SCHEME BROUGHT INTO FORCE BY THE ROYAL DECREE OF 3 MARCH 1927 RESULTS IN DISCRIMINATION BETWEEN HOME-GROWN AND IMPORTED WOOD CONTRARY TO THE PROHIBITION OF THE FIRST PARAGRAPH OF ARTICLE 95 OF THE TREATY .
11 THE DEFENDANT DOES NOT DISPUTE THE EXISTENCE OF DISCRIMINATION RESULTING FROM THE PROVISIONS WHICH FORM THE SUBJECT-MATTER OF THE PROCEEDINGS .
12 FOLLOWING A SERIES OF STEPS TAKEN BY THE COMMISSION THE FIRST OF WHICH DATES BACK TO 1963, THE BELGIAN GOVERNMENT HAS SHOWN ITS WILLINGNESS TO TAKE THE NECESSARY MEASURES WITH A VIEW TO ELIMINATING THE DISCRIMINATION COMPLAINED OF .
13 A DRAFT LAW INTENDED TO MAKE POSSIBLE A REVISION OF THE DISPUTED SCHEME WAS PUT BEFORE PARLIAMENT IN 1967 AND PROVISIONS WERE LATER ADOPTED IN ORDER TO REVIVE THIS DRAFT LAW WHICH HAD LAPSED OWING TO THE DISSOLUTION OF THE BELGIAN PARLIAMENT IN THE MEANWHILE .
14 IN THESE CIRCUMSTANCES THE BELGIAN GOVERNMENT CONSIDERS THAT THE DELAY IN ENACTING THE LAW AMOUNTS AS FAR AS IT IS CONCERNED TO A " CASE OF FORCE MAJEURE ".
15 THE OBLIGATIONS ARISING FROM ARTICLE 95 OF THE TREATY DEVOLVE UPON STATES AS SUCH AND THE LIABILITY OF A MEMBER STATE UNDER ARTICLE 169 ARISES WHATEVER THE AGENCY OF THE STATE WHOSE ACTION OR INACTION IS THE CAUSE OF THE FAILURE TO FULFIL ITS OBLIGATIONS, EVEN IN THE CASE OF A CONSTITUTIONALLY INDEPENDENT INSTITUTION .
16 THE OBJECTION RAISED BY THE DEFENDANT CANNOT THEREFORE BE SUSTAINED .
17 IN THESE CIRCUMSTANCES, BY APPLYING A DUTY AT THE SAME RATE, AS LAID DOWN BY ARTICLE 31 - 14 OF THE ROYAL DECREE OF 3 MARCH 1927 AS AMENDED, TO HOME-GROWN WOOD TRANSFERRED STANDING OR FELLED AND TO IMPORTED WOOD CALCULATED ON ITS VALUE AT THE TIME OF THE DECLARATION OF ENTRY FOR HOME USE, THE KINGDOM OF BELGIUM HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 95 OF THE TREATY .

18 UNDER THE TERMS OF ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .
19 THE DEFENDANT HAS FAILED IN ITS SUBMISSIONS .

THE COURT
HEREBY :
1 . DECLARES THAT, BY APPLYING A DUTY AT THE SAME RATE, AS LAID DOWN BY ARTICLE 31 - 14 OF THE ROYAL DECREE OF 3 MARCH 1927 AS AMENDED BY THE ROYAL DECREE OF 3 MARCH 1927 AS AMENDED BY THE ROYAL DECREE OF 27 DECEMBER 1965, TO HOME-GROWN WOOD TRANSFERRED STANDING OR FELLED AND TO IMPORTED WOOD CALCULATED ON ITS VALUE AT THE TIME OF THE DECLARATION OF ENTRY FOR HOME USE, THE KINGDOM OF BELGIUM HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 95 OF THE EEC TREATY;
2 . ORDERS THE DEFENDANT TO PAY THE COSTS .