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

JUDGMENT OF THE COURT (Sixth Chamber)

5 March 2015 (*)

(Reference for a preliminary ruling — Taxation — Directive 92/12/EEC — General arrangements for products subject to excise duty — Imposition of duty on smuggled goods — Goods released for consumption in one Member State and transported to another Member State — Determination of the competent Member State — Right of the transit State to impose duty on those goods)

In Case C‑175/14,

REQUEST for a preliminary ruling under Article 267 TFEU from the Verwaltungsgerichtshof (Austria), made by decision of 28 March 2014, received at the Court on 10 April 2014, in the proceedings

Ralph Prankl

THE COURT (Sixth Chamber),

composed of S. Rodin, President of the Chamber, M. Berger and F. Biltgen (Rapporteur), Judges,

Advocate General: E. Sharpston,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

–        the Austrian Government, by C. Pesendorfer, acting as Agent,

–        the German Government, by T. Henze and K. Petersen, acting as Agents,

–        the European Commission, by M. Wasmeier and R. Lyal, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1        This request for a preliminary ruling concerns the interpretation of Articles 7(1) and (2) and 9(1) of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (OJ 1992 L 76, p. 1), as amended by Council Directive 92/108/EEC of 14 December 1992 (OJ 1992 L 390, p. 124) (‘Directive 92/12’).

2        The request has been made in proceedings between Mr Prankl, a long-distance lorry driver, and the Zollamt Wien (Vienna Customs Office) concerning the latter’s decision to make him subject to payment of the excise duty on tobacco products.

 Legal context

 EU law

3        The fifth to seventh recitals in the preamble to Directive 92/12 are worded as follows:

‘Whereas any delivery, holding with a view to delivery or supply for the purposes of a trader carrying out an economic activity independently or for the purposes of a body governed by public law, taking place in a Member State other than that in which the product is released for consumption gives rise to chargeability of the excise duty in that other Member State;

Whereas in the case of products subject to excise duty acquired by private individuals for their own use and transported by them, the duty must be charged in the country where they were acquired;

Whereas to establish that products subject to excise duty are not held for private but for commercial purposes, Member States must take account of a number of criteria.’

4        Article 6 of Directive 92/12 provides:

‘1.      Excise duty shall become chargeable at the time of release for consumption or when shortages are recorded which must be subject to excise duty in accordance with Article 14(3).

Release for consumption of products subject to excise duty shall mean:

(a)      any departure, including irregular departure, from a suspension arrangement;

(b)      any manufacture, including irregular manufacture, of those products outside a suspension arrangement;

(c)      any importation of those products, including irregular importation, where those products have not been placed under a suspension arrangement.

2.      The chargeability conditions and rate of excise duty to be adopted shall be those in force on the date on which duty becomes chargeable in the Member State where release for consumption takes place or shortages are recorded. Excise duty shall be levied and collected according to the procedure laid down by each Member State, it being understood that Member States shall apply the same procedures for levying and collection to national products and to those from other Member States.’

5        Article 7(1) to (6) of Directive 92/12 states:

‘1.      In the event of products subject to excise duty and already released for consumption in one Member State being held for commercial purposes in another Member State, the excise duty shall be levied in the Member State in which those products are held.

2.      To that end, without prejudice to Article 6, where products already released for consumption as defined in Article 6 in one Member State are delivered or intended for delivery in another Member State or used in another Member State for the purposes of a trader carrying out an economic activity independently or for the purposes of a body governed by public law, excise duty shall become chargeable in that other Member State.

3.      Depending on all the circumstances, the duty shall be due from the person making the delivery or holding the products intended for delivery or from the person receiving the products for use in a Member State other than the one where the products have already been released for consumption, or from the relevant trader or body governed by public law.

4.      The products referred to in paragraph 1 shall move between the territories of the various Member States under cover of an accompanying document listing the main data from the document referred to in Article 18(1). The form and content of this document shall be established in accordance with the procedure laid down in Article 24 of this Directive.

5.      The person, trader or body referred to in paragraph 3 must comply with the following requirements:

(a)      before the goods are dispatched, make a declaration to the tax authorities of the Member State of destination and guarantee the payment of the excise duty;

(b)      pay the excise duty of the Member State of destination in accordance with the procedure laid down by that Member State;

(c)      consent to any check enabling the administration of the Member State of destination to satisfy itself that the goods have actually been received and that the excise duty to which they are liable has been paid.

6.      The excise duty paid in the first Member State referred to in paragraph 1 shall be reimbursed in accordance with Article 22(3).’

6        Article 8 of Directive 92/12 provides:

‘As regards products acquired by private individuals for their own use and transported by them, the principle governing the internal market lays down that excise duty shall be charged in the Member State in which they are acquired.’

7        Article 9(1) and (2) of Directive 92/12 provides:

‘1.      Without prejudice to Articles 6, 7 and 8, excise duty shall become chargeable where products for consumption in a Member State are held for commercial purposes in another Member State.

In this case, the duty shall be due in the Member State in whose territory the products are and shall become chargeable to the holder of the products.

2.      To establish that the products referred to in Article 8 are intended for commercial purposes, Member States must take account, inter alia, of the following:

–        the commercial status of the holder of the products and his reasons for holding them,

–        the place where the products are located or, if appropriate, the mode of transport used,

–        any document relating to the products,

–        the nature of the products,

–        the quantity of the products.

…’

8        Article 10 of Directive 92/12 provides:

‘1.      Products subject to excise duty purchased by persons who are not authorised warehousekeepers or registered or non-registered traders and dispatched or transported directly or indirectly by the vendor or on his behalf shall be liable to excise duty in the Member State of destination. For the purposes of this Article, “Member State of destination” shall mean the Member State of arrival of the dispatch or transport.

2.      To that end, the delivery of products subject to excise duty already released for consumption in a Member State and giving rise to the dispatch or transport of those products to a person as referred to in paragraph 1, established in another Member State, and which are dispatched or transported directly or indirectly by the vendor or on his behalf shall cause excise duty to be chargeable on those products in the Member State of destination.

3.      The duty of the Member State of destination shall be chargeable to the vendor at the time of delivery. However, Member States may adopt provisions stipulating that the excise duty shall be payable by a tax representative, other than the consignee of the products. Such tax representative must be established in the Member State of destination and approved by the tax authorities of that Member State.

The Member State in which the vendor is established must ensure that he complies with the following requirements:

–        guarantee payment of excise duty under the conditions set by the Member State of destination prior to dispatch of the products and ensure that the excise duty is paid following arrival of the products,

–        keep accounts of deliveries of products.

4.      In the case referred to in paragraph 2, the excise duty paid in the first Member State shall be reimbursed in accordance with Article 22(4).

5.      Subject to Community law, Member States may lay down specific rules for applying this provision to products subject to excise duty which are covered by special national distribution arrangements compatible with the Treaty.’

9        Article 20 of Directive 92/12, which is in Title III entitled ‘Movement of goods’, states:

‘1.      Where an irregularity or offence has been committed in the course of a movement involving the chargeability of excise duty, the excise duty shall be due in the Member State where the offence or irregularity was committed from the natural or legal person who guaranteed payment of the excise duties in accordance with Article 15(3), without prejudice to the bringing of criminal proceedings.

Where the excise duty is collected in a Member State other than that of departure, the Member State collecting the duty shall inform the competent authorities of the country of departure.

2.      When, in the course of movement, an offence or irregularity has been detected without it being possible to determine where it was committed, it shall be deemed to have been committed in the Member State where it was detected.

3.      Without prejudice to the provision of Article 6(2), when products subject to excise duty do not arrive at their destination and it is not possible to determine where the offence of irregularity was committed, that offence or irregularity shall be deemed to have been committed in the Member State of departure, which shall collect the excise duties at the rate in force on the date when the products were dispatched … Member States shall take the necessary measures to deal with any offence or irregularity and to impose effective penalties.

4.      If, before the expiry of a period of three years from the date on which the accompanying document was drawn up, the Member State where the offence or irregularity was actually committed is ascertained, that Member State shall collect the excise duty at the rate in force on the date when the goods were dispatched. In this case, as soon as evidence of collection has been provided, the excise duty originally levied shall be refunded.’

10      Article 22 of Directive 92/12, which is in Title IV entitled ‘Reimbursement’, provides:

‘1.      In appropriate cases, products subject to excise duty which have been released for consumption may, at the request of a trader in the course of his business, be eligible for reimbursement of excise duty by the tax authorities of the Member State where they were released for consumption when they are not intended for consumption in that Member State.

However, Member States may refuse a request for reimbursement where it does not satisfy the correctness criteria they lay down.

2.      In the application of paragraph 1, the following provisions shall apply:

(a)      before dispatch of the goods, the consignor must make a request for reimbursement from the competent authorities of his Member State and provide proof that the excise duty has been paid. However, the competent authorities may not refuse reimbursement on the sole grounds of non-presentation of the document prepared by the same authorities certifying that the initial payment had been made;

(b)      movement of the goods referred to in (a) shall take place in accordance with the provisions of Title III;

(c)      the consignor shall submit to the competent authorities of his Member State the returned copy of the document referred to in (b) duly annotated by the consignee which must either be accompanied by a document certifying that the excise duty has been secured in the Member State of consumption or have the following details added:

–        the address of the office concerned of the tax authorities in the Member State of destination,

–        the date of acceptance of the declaration by this office together with the reference or registration number of that declaration;

(d)      products subject to excise duty and released for consumption in a Member State and thus bearing a tax marking or an identification mark of that Member State may be eligible for reimbursement of the excise duty due from the tax authorities of the Member State which issued the tax markings or identification marks, provided that the tax authorities of the Member State which issued them has established that such markings or marks have been destroyed.

3.      In the cases referred to in Article 7, the Member State of departure is required to reimburse the excise duty paid only where the excise duty was previously paid in the Member State of destination in accordance with the procedure laid down in Article 7(5).

However, Member States may refuse this request for reimbursement where it does not satisfy the correctness criteria they lay down.

4.      In the cases referred to in Article 10 the Member State of departure must, at the vendor’s request, reimburse the excise duty paid where the vendor has followed the procedures laid down in Article 10(3).

However, Member States may refuse this request for reimbursement where it does not satisfy the correctness criteria they lay down.

Where the vendor is an authorised warehousekeeper, Member States may stipulate that the reimbursement procedure be simplified.

5.      The tax authorities of each Member State shall determine the monitoring procedures and methods applying to reimbursement made in their territory. Member States shall ensure that the reimbursement of excise duty does not exceed the sum actually paid.’

 Austrian law

11      Paragraph 27(1) and (2) of the Law on tobacco duty of 1995 (Tabaksteuergesetz 1995, BGBl.704/1994, ‘the TabStG’) provides:

‘(1)      If tobacco products are obtained from free circulation in a Member State for commercial purposes, a liability to tax arises if the person obtaining them

1.      receives the tobacco products within the customs territory,

2.      brings or causes to be brought into the customs territory tobacco products received outside the customs territory.

The person liable to pay the duty is the person obtaining them. Obtaining by a body governed by public law is equivalent to obtaining for commercial purposes.

(2)      If tobacco products are brought from free circulation in a Member State into the customs territory in circumstances other than those set out in sub-paragraph (1), a liability to duty arises when custody is taken of them or they are used for the first time within the customs territory for commercial purposes. The person liable to pay the duty is the person who has custody of or uses those products.’

 The dispute in the main proceedings and the question referred for a preliminary ruling

12      Between April and October 2005, Mr Prankl, acting on the instructions of a person who was resident in Austria, transported 12 650 000 cigarettes from Hungary to the United Kingdom. Those cigarettes, which had been smuggled by unknown persons into the customs territory of the European Union, were transported in the course of five successive journeys, passing in transit, inter alia, through Austria. They were concealed under the load which was referred to in the transport documents as the whole load. In the United Kingdom, those cigarettes were, in four cases, unloaded from the lorry by unknown individuals, and, in one case, confiscated by the United Kingdom authorities.

13      By decision of 11 April 2011, the Zollamt Wien imposed tobacco duty of EUR 1 249 820 on Mr Prankl, on the ground that he had held the cigarettes at issue and had brought them to Austria.

14      Mr Prankl brought an appeal against that decision. In support of his appeal, he stated that he had been hired by a third person to transport those cigarettes illegally from Hungary to the United Kingdom. He submitted that he had only a subordinate position in the hierarchy of the extensive cigarette smuggling organisation for which he had undertaken the journeys. In addition, he stated that he had not had any information about the amount of cigarettes loaded on board the vehicle he was driving and did not know the plans for selling them. Furthermore, he submitted that, as a mere heavy goods vehicle driver, he did not, from a commercial point of view, have any right of disposal of those cigarettes and was not therefore the person who had obtained them for the purposes of Paragraph 27 of the TabStG. Moreover, he stated that he had not placed the cigarettes in question on the market in Austria and that the mere ‘transit’ of tobacco products through Austria is not covered by that paragraph.

15      The Unabhängiger Finanzsenat (Independent Tax Chamber) upheld the imposition of tobacco duty in the abovementioned amount, basing its decision on Paragraph 27(2) of the TabStG. According to that court, although Mr Prankl had not been the person who obtained the cigarettes in question, he nevertheless knew about the irregularity of the transports, for which he had moreover been paid. It took the view that, as the driver of the heavy goods vehicle which was used to transport those cigarettes, Mr Prankl was the first to have custody of them, for commercial purposes, in Austrian customs territory and was therefore liable, in Austria, to pay the tobacco duty.

16      The Verwaltungsgerichtshof (Higher Administrative Court), before which Mr Prankl brought an appeal to have the decision of the Unabhängiger Finanzsenat set aside, enquires whether the provisions of Directive 92/12, and in particular Article 7 thereof, do not preclude the outcome which the Unabhängiger Finanzsenat arrived at on the basis of the national legislation. It takes the view that the conclusion that, during a transport such as that at issue in the main proceedings, excise duty has to be levied in each transit Member State is inconsistent with the scheme inherent in that directive, namely that goods subject to excise duty which are held for commercial purposes are to be taxed in the Member State of destination.

17      It is true that the Court has already held that the EU legislature has not established prevention of double taxation as an absolute principle (judgment in BATIG, C‑374/06, EU:C:2007:788). However, the referring court is of the opinion that that finding must be viewed in the context of the facts which gave rise to the case in question, in which the goods subject to excise duty had been illegally released for consumption in a Member State other than that of which it already bore the tax markings.

18      In those circumstances, the Verwaltungsgerichtshof decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Are Article 7(1) and (2) and Article 9(1) of … Directive 92/12 … to be interpreted as precluding national provisions which provide that where excise goods … have been released for consumption in a (first) Member State and, without an accompanying document in accordance with Article 7(4) of that directive, have been transported by land to another Member State (Member State of destination) through one or more other [transit] Member States … in order to be sold in the Member State of destination, excise duty … is charged also in a transit Member State?’

 The question referred for a preliminary ruling

19      By its question, the referring court asks, in essence, whether Article 7(1) and (2) and Article 9(1) of Directive 92/12 are to be interpreted as meaning that, where goods subject to excise duty that have been smuggled into the territory of a Member State are transported, without the accompanying document prescribed in Article 7(4) of that directive, to another Member State, in the territory of which those goods are discovered by the competent authorities, the transit Member States are permitted also to levy excise duty on the driver of the heavy goods vehicle who transported them for having held those goods for commercial purposes in their territory.

20      It should be noted at the outset that the aim of Directive 92/12 is to lay down a number of rules on the holding, movement and monitoring of products subject to excise duty, in particular so as to ensure that chargeability of excise duties is identical in all the Member States. That harmonisation makes it possible, in principle, to avoid double taxation in relations between Member States (judgments in Scandic Distilleries, C‑663/11, EU:C:2013:347, paragraphs 22 and 23, and Gross, C‑165/13, EU:C:2014:2042, paragraph 17).

21      It must also be borne in mind that Article 7(1) and (2) of Directive 92/12 lays down a general rule that where a product subject to excise duty and released for consumption in one Member State is held for commercial purposes in another Member State, the excise duty is to be levied in the latter State. The excise duty is therefore chargeable in the Member State for which the product is intended rather than the State where it is released for consumption (judgment in Meiland Azewijn, C‑292/02, EU:C:2004:499, paragraph 35).

22      The interpretation to the effect that the levying of the excise duty occurs, in general, in one Member State only, namely that for which the product concerned is intended and in which it will be consumed, is moreover borne out by Article 22 of Directive 92/12, which provides, under certain conditions, for the reimbursement of the excise duties paid in another Member State (judgment in Scandic Distilleries, EU:C:2013:347, paragraph 24).

23      It is true that neither Article 7(1) and (2) of Directive 92/12 nor Article 9(1) thereof expressly precludes excise duty from being levied on smuggled goods in a Member State through which those goods have passed in transit, even though the goods are no longer in the territory of that State and have arrived in the Member State of destination.

24      However, the Court has held that, if products which are unlawfully introduced into the territory of the European Union are, like the goods at issue in the main proceedings, held for commercial purposes, it is apparent from Article 6(1), in conjunction with Article 7(1), of that directive that the authorities in the Member State in which those products were discovered are competent to collect the excise duty (judgment in Dansk Transport og Logistik, C‑230/08, EU:C:2010:231, paragraph 114, and order in Febetra, C‑333/11, EU:C:2012:134, paragraph 41). In the case in the main proceedings the authorities concerned are the United Kingdom authorities.

25      By contrast, it is only if the products at issue are not held for commercial purposes that the Member State of departure remains competent, pursuant to Article 6 of Directive 92/12, to collect the excise duty, even if the unlawfully introduced products were only discovered subsequently by the authorities in another Member State (see, to that effect, judgment in Dansk Transport og Logistik, EU:C:2010:231, paragraph 115, and order in Febetra, EU:C:2012:134, paragraph 42).

26      In those circumstances, it must be held that, in the same way as the Member State of departure, the transit Member States are not competent to collect the excise duty if such products are discovered by the authorities of another Member State in the territory of which they are held for commercial purposes.

27      It cannot reasonably be maintained that the EU legislature intended to favour the prevention of abuse and evasion by generally allowing, in cases where products subject to excise duty are unlawfully transported, all the transit Member States to levy excise duty.

28      The fact that, in paragraph 57 of the judgment in BATIG (EU:C:2007:788), the Court held that the EU legislature favoured the prevention of abuse and evasion to the detriment of the principle that taxation should occur in only one Member State does not cast doubt on that interpretation. That assessment is part, as is apparent from the first sentence of that paragraph, of the specific factual context of the case which gave rise to that judgment, which concerned the situation of an unlawful departure from a suspension arrangement on account of the theft of products to which tax markings had already been affixed in the Member State of departure and which was characterised by the fact that the Member State which had issued those tax markings was unable to establish that they had been destroyed. Those products thus gave rise to payment of excise duties in both the Member State in which they were released for consumption and the Member State in which they were intended for consumption and of which they already bore the tax markings.

29      By contrast with the situation in the case which gave rise to the judgment in BATIG (EU:C:2007:788), the goods at issue in the main proceedings did not bear any tax markings and did not disappear between the point of departure of the transport and the Member State of destination. In those circumstances, as the European Commission has pointed out, such a levy of the excise duty in the transit Member States, which may lead to multiple taxation, is not necessary to prevent abuse and evasion since both the importing Member State and the Member State of destination are known and it is common ground that the goods were delivered in the latter State.

30      It is also necessary to add that that interpretation is also not called into question by the argument that, in cases of illegal transport, the chargeability of the excise duty is determined according to the detailed rules set out in Article 9(1) of Directive 92/12.

31      Regardless of whether, as the German Government submits, Article 9(1) of Directive 92/12 may be considered to be a catch-all provision which is applicable if, in cases of illegal transit, the goods subject to excise duty were held for commercial purposes and the holding of those goods was not justified by way of an order or a delivery, it is sufficient to point out that, in a situation such as that at issue in the main proceedings, excise duty has become chargeable in the Member State of destination, in which the goods concerned have actually been released for consumption, and that, as is apparent from paragraph 29 of the present judgment, the levy of the excise duty in another or even in several other Member States is not necessary to prevent abuse and evasion.

32      In the light of all of those considerations, the answer to the question referred is that Article 7(1) and (2) and Article 9(1) of Directive 92/12 must be interpreted as meaning that, where goods subject to excise duty that have been smuggled into the territory of a Member State are transported, without the accompanying document prescribed in Article 7(4) of that directive, to another Member State, in the territory of which those goods are discovered by the competent authorities, the transit Member States are not permitted also to levy excise duty on the driver of the heavy goods vehicle who transported them for having held those goods for commercial purposes in their territory.

 Costs

33      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Sixth Chamber) hereby rules:

Article 7(1) and (2) and Article 9(1) of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products, as amended by Council Directive 92/108/EEC of 14 December 1992, must be interpreted as meaning that, where goods subject to excise duty that have been smuggled into the territory of a Member State are transported, without the accompanying document prescribed in Article 7(4) of that directive, to another Member State, in the territory of which those goods are discovered by the competent authorities, the transit Member States are not permitted also to levy excise duty on the driver of the heavy goods vehicle who transported them for having held those goods for commercial purposes in their territory.

[Signatures]

* Language of the case: German.

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