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

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1 . PRELIMINARY QUESTIONS - REFERENCE TO THE COURT - CONDITIONS - EX PARTE PROCEEDINGS - PROPRIETY OF REFERENCE
( EEC TREATY, ARTICLE 177 )
2 . AGRICULTURE - COMMON ORGANIZATION OF MARKETS - CEREALS - BROKEN RICE INTENDED FOR MANUFACTURE OF BEER - PRODUCTION REFUND - BREWERY USING THE PRODUCT - NO DIRECT RIGHT - TRANSFER BY THE PRODUCER
( REGULATION NO 359/67 OF THE COUNCIL, ARTICLE 9; REGULATION NO 367/67 OF THE COUNCIL, ARTICLE 1; REGULATION NO 2085/68 OF THE COMMISSION )

1 . ARTICLE 177 DOES NOT MAKE THE REFERENCE TO THE COURT SUBJECT TO WHETHER THE PROCEEDINGS IN WHICH THE NATIONAL COURT HAS DRAWN UP THE REFERENCE FOR A PRELIMINARY RULING WERE OR WERE NOT DEFENDED .
2 . A BREWER WHO HAS PAID AT THE MARKET PRICE FOR BROKEN RICE INTENDED FOR THE BREWING OF BEER CANNOT ASSERT A DIRECT RIGHT TO THE GRANT OF THE REFUND REFERRED TO IN ARTICLE 9 OF REGULATION NO 359/67 OF 25 JULY 1967, ARTICLE 1 OF REGULATION NO 367/67 OF 25 JULY 1967 AND REGULATION NO 2085/68 OF 20 DECEMBER 1968 .
MEMBER STATES MAY, BY DOMESTIC IMPLEMENTING MEASURES, PERMIT THE TRANSFER TO BREWERIES OF THE RIGHT TO THE REFUND BY VIRTUE OF THE FORMAL CONSENT OF THE PRODUCER .

IN CASE 162/73
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE PRETORE DI ROMA ( STIPENDIARY MAGISTRATE OF ROME ) FOR A PRELIMINARY RULING IN THE APPLICATION PENDING BEFORE HIM FOR AN ORDER OF THE COURT AGAINST THE AMMINISTRAZIONE DELLE FINANZE DELLO STATO ( STATE ADMINISTRATION OF FINANCE ) BY
BIRRA DREHER SPA, WHOSE REGISTERED OFFICE IS IN VENICE,

ON THE INTERPRETATION OF REGULATION NO 367/67 OF THE COUNCIL OF 25 JULY 1967, FIXING PRODUCTION REFUNDS ON MAIZE GROATS AND MEAL AND BROKEN RICE USED IN THE BREWING INDUSTRY, AND OF REGULATION NO 2085/68 OF THE COMMISSION OF 20 DECEMBER 1968, ON CERTAIN DETAILED RULES FOR GRANTING THE PRODUCTION REFUND ON BROKEN RICE,

AS TO THE JURISDICTION OF THE COURT
2 THE GOVERNMENT OF THE ITALIAN REPUBLIC, IN THE COURSE OF THE ORAL PROCEDURE, EXPRESSED DOUBTS AS TO THE JURISDICTION OF THE COURT TO GIVE A RULING IN PURSUANCE OF ARTICLE 177 OF THE EEC TREATY ON A PRELIMINARY QUESTION RAISED IN THE COURSE OF AN APPLICATION FOR AN ORDER OF THE COURT BROUGHT BEFORE THE PRETORE BY AN INDIVIDUAL AGAINST THE ADMINISTRATION .
IT MAKES THE POINT IN THIS CONNEXION THAT SUCH A PROCEDURE HAS NOT THE CHARACTERISTICS OF A NORMAL DEFENDED ACTION INASMUCH AS THE COURT, ADJUDICATING SIMPLY ON THE BASIS OF ALLEGATIONS PRESENTED BY THE PLAINTIFF, CAN MAKE AN ORDER AGAINST THE OTHER PARTY WITHOUT HAVING GIVEN HIM THE OPPORTUNITY TO PRESENT HIS OBSERVATIONS . THE PROCEEDINGS ARE CONTESTED ONLY IN THE EVENT OF THE PARTY AGAINST WHOM THE ORDER IS MADE RAISING OBJECTIONS TO THE DECISION . IN THE COURSE OF THE PROCEEDINGS THE PARTY CONCERNED HAS NO OPPORTUNITY TO SUBMIT HIS OBSERVATIONS ON THE EXPEDIENCY OF A REFERENCE FOR A PRELIMINARY RULING OR, IF NEED BE, TO TAKE PART OR COLLABORATE WITH THE NATIONAL COURT IN DRAWING UP THE QUESTIONS TO BE REFERRED TO THE COURT OF JUSTICE .
3 ACCORDING TO ARTICLE 177 OF THE TREATY, THE PROCEDURE REGARDING PRELIMINARY RULINGS IS OPEN TO ANY NATIONAL COURT OR TRIBUNAL . IT IS SUFFICIENT TO DETERMINE THAT THE PRETORE, IN HEARING THE APPLICATION FOR THE GRANT OF AN ORDER, IS EXERCISING THE FUNCTIONS OF A COURT OR TRIBUNAL WITHIN THE MEANING OF ARTICLE 177 - AS HAS MOREOVER PREVIOUSLY BEEN DECIDED - AND THAT AN INTERPRETATION OF COMMUNITY LAW HAS BEEN CONSIDERED BY THAT COURT AS ESSENTIAL FOR IT TO ARRIVE AT A DECISION, WITHOUT ITS BEING NECESSARY FOR THE COURT OF JUSTICE TO CONSIDER THE STAGE OF THE PROCEEDINGS AT WHICH THE QUESTION WAS PUT . ARTICLE 177 DOES NOT MAKE THE REFERENCE TO THE COURT SUBJECT TO WHETHER THE PROCEEDINGS AT THE CONCLUSION OF WHICH THE NATIONAL COURT HAS DRAWN UP THE REFERENCE FOR A PRELIMINARY RULING WERE OR WERE NOT DEFENDED .
AS TO THE SUBSTANCE OF THE CASE
4 THE QUESTIONS PUT ARE DIRECTED SUBSTANTIALLY TO ENQUIRING WHETHER THE RIGHT TO THE REFUND LAID DOWN BY REGULATIONS NOS 367/67 AND 2085/68 FOR BROKEN RICE USED BY THE BREWING INDUSTRY IS VESTED EXCLUSIVELY IN THE PRODUCER OR WHETHER THE BENEFIT OF THE REFUND MAY IN CERTAIN CIRCUMSTANCES BE CLAIMED DIRECTLY BY THE BREWERY USING THE RICE .
WHEREAS THE FIRST AND SECOND QUESTIONS RELATE TO THE ECONOMIC OBJECTIVE PURSUED BY THE ABOVE REGULATIONS,
- THE THIRD QUESTION ENQUIRES WHETHER A BREWER WHO HAS PAID FOR BROKEN RICE AT THE 'NORMAL' MARKET PRICE - THAT IS, THE PRICE FIXED WITHOUT TAKING ACCOUNT OF THE PAYMENT OF THE REFUND - CAN ASSERT A RIGHT TO BENEFIT DIRECTLY FROM IT; AND
- THE FOURTH QUESTION ENQUIRES WHETHER MEMBER STATES CAN, BY DOMESTIC IMPLEMENTING LEGISLATION, MAKE THE EXERCISE OF ANY RIGHT ON THE PART OF THE BREWER TO PAYMENT OF THE REFUND SUBJECT TO THE PRODUCTION OF THE WRITTEN AGREEMENT OF THE PRODUCER OF THE BROKEN RICE .
5 IN PURSUANCE OF ARTICLE 9 OF REGULATION NO 359/67 OF THE COUNCIL OF 25 JULY 1967 ON THE COMMON ORGANIZATION OF THE MARKET IN RICE ( OJ NO 174, P . 1 ), A 'PRODUCTION REFUND' SHALL BE GRANTED FOR BROKEN RICE WHICH HAS BEEN USED EITHER BY THE STARCH INDUSTRY OR BY THE BREWING INDUSTRY .
THIS PROVISION CORRESPONDS TO THAT OF ARTICLE 11 OF REGULATION NO 120/67 OF THE COUNCIL OF 13 JUNE 1967 ON THE COMMON ORGANIZATION OF THE MARKET IN CEREALS ( OJ NO 117, P . 2269 ), WHICH MAKES PROVISION FOR A SIMILAR REFUND FOR MAIZE AND COMMON WHEAT USED BY THE STARCH INDUSTRY AS WELL AS FOR MAIZE USED FOR THE MANUFACTURE OF MAIZE GROATS AND MEAL ( GRITZ ) USED BY THE BREWING INDUSTRY .
6 BY VIRTUE OF ARTICLE 1 OF REGULATION NO 367/67, MEMBER STATES SHALL GRANT A PRODUCTION REFUND BOTH FOR MAIZE GROATS AND MEAL AND FOR BROKEN RICE USED IN THE BREWING INDUSTRY . ARTICLE 2 OF THE SAME REGULATION REQUIRES THEM IN ADDITION TO TAKE ALL NECESSARY MEASURES TO ENSURE THAT THE REFUNDS ARE LIMITED TO THE QUANTITIES OF MAIZE GROATS AND MEAL AND OF BROKEN RICE ACTUALLY USED BY THAT INDUSTRY .
7 IN ITS TURN REGULATION NO 2085/68 OF THE COMMISSION LAYS DOWN CERTAIN DETAILED RULES FOR GRANTING A REFUND ON THE IMPORTATION OR PRODUCTION OF BROKEN RICE . IN PARTICULAR ARTICLE 3 ( 2 ) OF THIS REGULATION SPECIFIES THAT IN ORDER TO RECEIVE PAYMENT OF THE REFUND THE 'PRODUCER' OF BROKEN RICE SHALL SUBMIT TO THE COMPETENT AUTHORITIES AN APPLICATION ACCOMPANIED BY CERTAIN EVIDENCE INTENDED TO ESTABLISH THAT THE RICE HAS BEEN USED FOR THE PURPOSES REFERRED TO IN THE REGULATION .
8 THE WORDING OF THESE DIFFERENT REGULATIONS SPECIFIES BEYOND ANY POSSIBLE DOUBT THAT THEY APPLY TO PRODUCTION REFUNDS AND THAT THE RIGHT TO THEM IS CONFERRED ON PRODUCERS AND NOT USERS . THESE PROVISIONS ARE EXPLAINED BY THE ECONOMIC OBJECTIVE OF THE RULES IN QUESTION WHICH AIM NOT AT CONFERRING AN ADVANTAGE ON THE BREWING INDUSTRY BUT AT AVOIDING A SITUATION WHEREBY THE DETERMINATION OF THE PRICE LEVEL OF CERTAIN BASIC PRODUCTS - NAMELY MAIZE, COMMON WHEAT AND RICE - MIGHT LEAD TO THE CLOSING TO THESE PRODUCTS OF THE OUTLETS WHICH THE STARCH INDUSTRY AND THE BREWING INDUSTRY REPRESENT FOR THEM .
MORE PARTICULARLY THESE PROVISIONS, BY PUTTING ON A BASIS OF EQUALITY THE DIFFERENT PRODUCTS - MAIZE GROATS AND MEAL, BROKEN RICE AND STARCH - USED BY THE BREWING INDUSTRY, AIM AT PRESERVING A BALANCE BETWEEN THE OUTLETS PROVIDED FOR THE PRODUCTS IN QUESTION BY THE STARCH INDUSTRY AND THE BREWING INDUSTRY, STARCH BEING IN ITS TURN CAPABLE OF BEING LISTED AMONGST THE RAW MATERIALS USED BY THE LATTER INDUSTRY .
9 THIS INTENTION IS EXPRESSED IN THE PREAMBLE TO REGULATION NO 367/67, ACCORDING TO WHICH THE REFUND IN QUESTION 'SHOULD BE FIXED AT SUCH A LEVEL AS TO ACHIEVE A BALANCE BETWEEN THE COSTS OF SUPPLYING THE BREWING INDUSTRY WITH MAIZE STARCH ON THE ONE HAND AND WITH MAIZE GROATS AND MEAL AND BROKEN RICE ON THE OTHER '.
ALTHOUGH THIS SYSTEM MAY ALLOW THE BREWING INDUSTRY TO SUPPLY ITSELF ON CONDITIONS MORE FAVOURABLE THAN THOSE WHICH WOULD RESULT FROM THE GENERAL PRICE SYSTEM, THIS ADVANTAGE CAN HOWEVER ONLY BE CONFERRED UPON IT THROUGH THE INTERMEDIARY OF THE MARKET AND NOT IN THE FORM OF A RIGHT DIRECTLY GRANTED BY THE REGULATIONS .
10 THIS CONCLUSION IS NOT INVALIDATED BY THE FACT THAT REGULATION NO 2085/68 OF THE COMMISSION GRANTS THE REFUND NOT ONLY TO THE PRODUCER BUT ALSO TO THE IMPORTER OF BROKEN RICE . THIS IMPLEMENTING PROVISION, NECESSITATED BY THE FACT THAT, FOR IMPORTED BROKEN RICE, THE PRODUCER IS OUTSIDE THE SPHERE OF APPLICATION OF COMMUNITY LAW, DOES NOT RESULT IN ANY MODIFICATION IN THE NATURE OF THE REFUND, AS A PRODUCTION REFUND, LAID DOWN BY THE BASIC REGULATION NO 359/67 AND CONFIRMED BY THE IMPLEMENTING REGULATION NO 367/67 OF THE COUNCIL .
THESE PARTICULAR DETAILED IMPLEMENTING RULES INTRODUCED BY THE REGULATION OF THE COMMISSION IN FACT ONLY AIM AT PLACING ON A BASIS OF EQUALITY IMPORTED BROKEN RICE AND BROKEN RICE ORIGINATING WITHIN THE COMMUNITY WITHOUT AT THE SAME TIME ALTERING THE INTRINSIC NATURE OF THE REFUND . NO ARGUMENT CAN THEREFORE BE BASED ON THE FACT THAT THE BREWER-USER MAY OCCASIONALLY BE IDENTICAL WITH THE IMPORTER OF THE GOODS .
11 FINALLY, A NATIONAL IMPLEMENTING PROVISION WHICH RECOGNIZES A RIGHT TO THE REFUND ON THE PART OF THE BREWER USING THE BROKEN RICE ONLY IN THE EVENT OF SUCH RIGHT'S HAVING BEEN EXPRESSLY ASSIGNED TO HIM BY THE PRODUCER CANNOT BE CONSIDERED AS INCOMPATIBLE WITH THE SYSTEM SET UP BY THE COMMUNITY'S REGULATIONS . IN FACT, SINCE THE BREWER USING THE BROKEN RICE CANNOT AVAIL HIMSELF OF A RIGHT DIRECTLY CONFERRED BY THE SAID REGULATIONS, SUCH A RIGHT CAN ONLY BE VESTED IN HIM BY VIRTUE OF AN EXPRESS ASSIGNMENT BY THE PRODUCER .
12 CONSEQUENTLY IT IS APPROPRIATE TO REPLY TO THE QUESTIONS PUT, IN SO FAR AS THEY RAISE A LEGAL PROBLEM OF INTERPRETATION, THAT THE BREWER WHO HAS PAID FOR BROKEN RICE AT THE MARKET PRICE NOT TAKING ACCOUNT OF THE REFUND CANNOT ASSERT A DIRECT RIGHT TO BENEFIT FROM THE LATTER, AND THAT A SYSTEM PERMITTING THE TRANSFER TO THE BREWER OF THE RIGHT TO THE REFUND BY VIRTUE OF THE FORMAL AGREEMENT OF THE PRODUCER, WITH THE CONSEQUENCE THAT IN THE ABSENCE OF SUCH AN AGREEMENT THE BREWER CANNOT ASSERT ANY DIRECT RIGHT, IS NOT INCOMPATIBLE WITH THOSE REGULATIONS .

13 THE COSTS INCURRED BY THE GOVERNMENT OF THE ITALIAN REPUBLIC AND THE COMMISSION OF THE EUROPEAN COMMUNITIES, WHICH HAVE SUBMITTED THEIR OBSERVATIONS TO THE COURT, ARE NOT RECOVERABLE, AND AS THE PROCEEDINGS ARE A STEP IN THE ACTION PENDING BEFORE THE ROME PRETORE, IT IS FOR THE LATTER TO DECIDE AS TO COSTS .

THE COURT
IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE PRETORE OF ROME BY ORDER OF 29 AUGUST 1973, HEREBY RULES :
1 . A BREWER WHO HAS PAID AT THE MARKET PRICE FOR BROKEN RICE INTENDED FOR THE BREWING OF BEER CANNOT ASSERT A DIRECT RIGHT TO THE GRANT OF THE REFUND REFERRED TO IN ARTICLE 9 OF REGULATION NO 359/67 OF 25 JULY 1967 AND REGULATION NO 2085/68 OF 20 DECEMBER 1968;
2 . MEMBER STATES MAY, BY DOMESTIC IMPLEMENTING MEASURES, PERMIT THE TRANSFER TO BREWERIES OF THE RIGHT TO THE REFUND BY VIRTUE OF THE FORMAL CONSENT OF THE PRODUCER .