Sektkellerei C.A. Kupferberg & Cie KG a.A. v Hauptzollamt Mainz (253/83)

1 —Article 95 of the Treaty

(a) The Commission emphasizes that during the period in question imported products were subject to an equalization duty of DM 1500 per hectolitre of spirit, which was equivalent to the tax levied on similar or competing domestic products whether they were spirits sold by the monopoly and subject to the tax on spirits or spirits not sold to the monopoly and subject to the spirits surcharge.Given that, subject to the observations set out below, the tax on spirits was identical in all three cases, namely DM 1500 per hectolitre of spirit, the tax levied on the products from other Member States did not exceed, directly or indirectly, the tax on similar domestic products. The conditions laid down in Article 95 were therefore met and so, in the Commission's view, Kupferberg is not entitled to have the rate reduced to DM 1430 per hectolitre of spirit.(b) As for Kupferberg's assertion that, in view of the provisions of the Law on the Monopoly in Spirits and having regard to the reduction in the selling price from DM 1833 to DM 1683 per hectolitre of spirit, the rate of equalization duty should have been DM 1430 instead of DM 1500 per hectolitre of spirit, the Commission points out that from the point of view of Community law it is irrelevant whether the lower selling price ought to be viewed under German law as the normal selling price for the purposes of the calculation method laid down in Paragraph 152 (1) of the said Law. All that it is necessary to determine is whether the real tax burden, that is to say, the rate of tax actually applied, is compatible with Community law.Referring to the judgments of the Court of 13 March 1979 (Case 86/78, Peureux v Directeur des Services Fiscaux, [1979] ECR 897) and 7 May 1981 (Case 152/80, Rumhaus Hansen GmbH v Hauptzollamt Flensburg, [1981] ECR 1165), it points out that although Article 95 of the Treaty does not preclude goods imported from another Member State from enjoying more favourable tax treatment than domestic goods it does not require this, since it simply prohibits imported products from being taxed more heavily than domestic products.Finally, the Commission stresses that, as regards the rate of tax actually applied in this case, the rate of DM 1500 per hectolitre of spirit was fixed by the Minister for Finance in his circular of 23 March 1976 without reference in any way to the calculation method set out in Paragraph 152 of the Law on the Monopoly in Spirits.(c) As for Kupferberg's doubts about the amount of tax actually levied on domestic spirits by the monopoly, the Commission points out that the fact that a calculation carried out on the basis of the reduced selling price actually applied by the monopoly (DM 1683 per hectolitre of spirit) and an unchanged basic price (DM 253 per hectolitre of spirit) produces an amount (DM 1430 per hectolitre of spirit) less than the tax (DM 1500) by no means signifies that the Federal Monopoly Administration was partially relieved of its obligation to levy and pay to the Treasury the whole amount of the tax. In its view, it is necessary to start from the principle that the Federal Monopoly Administration always duly levied the tax under Paragraph 84 of the Law on the Monopoly in Spirits and that it always paid the proceeds over to the Treasury in accordance with Paragraph 86.(d) However, the Commission considers that should it turn out, contrary to its belief, that the spirits sold by the monopoly were in fact less heavily taxed owing to the monopoly's being partly released from levying and paying the tax, the issue would take on a different complexion. In that regard, it points out that from an economic point of view exemption from tax to the extent of DM 70, as would be the case, would constitute no more than a partial offsetting in advance of losses incurred by the monopoly. That would be aid, and, as such, would have to be assessed in the light, not of Article 95 of the Treaty, but of Article 37. It adds that it would be wholly specious to seek to make a distinction depending on whether the tax to be paid is reduced immediately or whether it is first paid in full to the Treasury and later partly offset from general tax revenue, in so far as losses are always offset from tax revenue.The Commission considers that even if that view were not accepted, the existence of an infringement of Article 95 would still have to be established in the actual case of the spirits put into free circulation by Kupferberg. In this connection it would, in its view, be necessary to take the following factors into account:— Whisky, geneva, armagnac and pruneaux are distilled spirits which are not comparable with the spirit sold by the Federal Monopoly Administration. The only similar products on the German market, within the meaning of the first paragraph of Article 95, are those products which are not subject to the requirement to be sold to the monopoly, such as the various grain spirits (Steinhäger, for instance) and spirits derived from fruit. Those spirits are subject to the spirits surcharge, which (ignoring the specific decreases and increases mentioned under (e) below) amounted to DM 1500 per hectolitre of spirit, that is to say, it was identical in amount to the tax levied on similar imported products. Any reduction of the monopoly equalization duty by DM 70 therefore did not apply to those products.From the pricing policy practised by the monopoly, as described, neither does it appear that protection, not even indirect protection, of spirit sold by the monopoly has been practised as against the four spirits mentioned above, and hence neither does it appear that the second paragraph of Article 95 has been infringed.— At the most only the liqueur imported from the Netherlands might warrant a different line of argument in so far as spirit is used in its manufacture, as is the case in Germany. If spirit from the monopoly is used to manufacture liqueur, the German liqueur would enjoy preferential tax treatment to the extent of DM 70 per hectolitre of spirit, contrary to the first paragraph of Article 95.(e) Lastly, although this issue is not the subject of the question referred to the Court for a preliminary ruling, the Commission points out that, in order to satisfy the requirements of Article 95 of the Treaty, imported products must be eligible without discrimination for the tax concessions provided for in the Law on the Monopoly in Spirits and, in particular, in Paragraphs 79 and 79a thereof, provided that they satisfy the requisite conditions. It refers in this connection to the Court's case-law, which provides the necessary guidance to enable the Finanzgericht to decide on the matter once it has made the necessary findings of fact.