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Judgment of the Court (Third Chamber) of 16 December 1993.

Friedrich Schultz v Hauptzollamt Heilbronn.

Reference for a preliminary ruling: Finanzgericht Baden-Württemberg - Germany.

Additional levy on milk - Fat content of milk.

Case C-120/92.

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Judgment of 16 December 1993, Schultz / Hauptzollamt Heilbronn (C-120/92, ECR 1993 p. I-6885) ECLI:EU:C:1993:943

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Friedrich Schultz v Hauptzollamt Heilbronn.

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Keywords

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1. Agriculture ° Common organization of the markets ° Milk and milk products ° Additional levy on milk ° Determination of reference quantities exempt from the levy ° Period to be used in order to determine the fat content of the milk to be considered representative ° Choice of a period outside the options afforded by the Community rules ° Precluded

(Commission Regulation No 1546/88, Art. 12(1))

2. Agriculture ° Common organization of the markets ° Discrimination between producers or consumers ° Additional levy on milk ° Determination of reference quantities exempt from the levy ° Difference in treatment as between producers based on the inability to rely on the fat content of milk delivered outside the reference periods laid down by the Community legislation ° No discrimination

(Commission Regulation No 1546/88, Art. 12(1))

Summary

1. Article 12(1) of Regulation No 1546/88 laying down detailed rules for the application of the additional levy on milk, as amended by Regulation No 1033/89, must be interpreted as meaning that a Member State is entitled to use only the periods of application of the additional levy scheme expressly laid down by that provision for the purposes of determining the fat content of milk to be considered representative which is taken into account when determining the reference quantities exempt from the levy.

In so far as that provision designates the period to be regarded as the reference period and authorizes the choice of another period, which it also designates, in exceptional cases which it lists exhaustively, it lays down precise rules precluding any other possibility.

2. The difference in treatment between, on the one hand, producers the fat content of whose milk declined abnormally during the two periods of application of the additional levy scheme laid down by Article 12(1) of Regulation No 1546/88 for determining the fat content to be considered representative and, on the other, producers who may rely on a representative fat content within one or other of those periods, is objectively justified by the need to lay down, in the interests of both legal certainty and the effectiveness of the additional levy scheme, a limitation on the number of periods which may be taken into account as reference periods. Consequently, that difference in treatment cannot be described as discriminatory.

Parties

In Case C-120/92,

REFERENCE to the Court under Article 177 of the EEC Treaty by the Finanzgericht Baden-Wuerttemberg (Federal Republic of Germany) for a preliminary ruling in the proceedings pending before that court between

Friedrich Schultz

and

Hauptzollamt Heilbronn

on the interpretation and validity of the first subparagraph and the second indent of the second subparagraph of Article 12(1) of Commission Regulation (EEC) No 1546/88 of 3 June 1988 laying down detailed rules for the application of the additional levy referred to in Article 5c of Council Regulation (EEC) No 804/68 (OJ 1988 L 139, p. 12), as amended by Commission Regulation (EEC) No 1033/89 of 20 April 1989 (OJ 1989 L 110, p. 27),

THE COURT (Third Chamber),

composed of: J.C. Moitinho de Almeida, President of the Chamber, F. Grévisse and M. Zuleeg, Judges,

Advocate General: W. Van Gerven,

Registrar: L. Hewlett, Administrator,

after considering the written observations submitted on behalf of:

the Commission of the European Communities, by Dierk Booss, Legal Adviser, acting as Agent,

having regard to the report of the Judge-Rapporteur,

after hearing the Opinion of the Advocate General at the sitting on 19 May 1993,

gives the following

Judgment

Grounds

1 By order of 23 March 1992, received at the Court on 15 April 1992, the Finanzgericht (Finance Court) Baden-Wuerttemberg (Federal Republic of Germany) referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation and validity of the first subparagraph and the second indent of the second subparagraph of Article 12(1) of Commission Regulation (EEC) No 1546/88 of 3 June 1988 laying down detailed rules for the application of the additional levy referred to in Article 5c of Council Regulation (EEC) No 804/68 (OJ 1988 L 139, p. 12), as amended by Commission Regulation (EEC) No 1033/89 of 20 April 1989 (OJ 1989 L 110, p. 27).

2 The questions arose in proceedings between Friedrich Schultz and Hauptzollamt (Principal Customs Office) Heilbronn on the relevant reference period to use with a view to the determination of the fat content of milk.

3 The plaintiff in the main proceedings is a milk producer who, between 1981 and 1984, sustained considerable losses in his dairy herd as a result of various outbreaks of disease. In order to offset those losses, he was forced to purchase young cows. Subsequently, the average fat content of the milk produced by the herd declined very sharply. The fat content regained its normal level after the 1985 to 1986 period.

4 In view of the low average fat content over the 1985 to 1986 period, Mr Schultz already had to pay additional levy in respect of accounting periods prior to 1989-1990 under Article 5c of Regulation No 804/68, Articles 1, 9, 10 and 11 of Council Regulation (EEC) No 857/84 of 31 March 1984 adopting general rules for the application of the levy referred to in Article 5c of Regulation (EEC) No 804/68 in the milk and milk products sector (OJ 1984 L 90, p. 13) and Article 12 of Regulation No 1546/88. For the 1989-1990 period, he was assessed to a further additional levy of DM 5 529.03.

5 After making an unsuccessful complaint, Mr Schultz brought an action in the Finanzgericht Baden-Wuerttemberg with a view to obtaining an increase in his reference quantity by means of a fresh determination of the fat content which is to be considered representative. In his view, the normal average fat content as recorded during the 1989-1990 period should be taken into account.

6 Considering that its decision turned on the interpretation and validity of a provision of the Community legislation on the additional levy on milk, the Finanzgericht Baden-Wuerttemberg stayed the proceedings and referred the following two questions to the Court for a preliminary ruling under Article 177 of the EEC Treaty:

"1. Are the provisions of the first subparagraph of Article 12(1) and the second indent of the second subparagraph of Article 12(1) of Commission Regulation (EEC) No 1546/88 of 3 June 1988 laying down detailed rules for the application of the additional levy referred to in Article 5c of Regulation (EEC) No 804/68 (OJ 1988 L 139, p. 12), as amended by Commission Regulation (EEC) No 1033/89 of 20 April 1989 (OJ 1989 L 110, p. 27), invalid or to be interpreted as meaning that a Member State may, by way of exception, provide that the representative fat content is to be that in the period of application in which the average fat content of the delivered milk

(a) was last unreduced or, if this is not possible,

(b) for the first time after the second period of application of the additional levy was no longer reduced?

2. If Question 1 is answered in the negative, are the provisions in Article 12(1) and (2) of the abovementioned regulation invalid in so far as they do not alter the period of application (1985/86) which is applicable in principle?"

7 In the grounds of its order, the Finanzgericht considers that the equity clause set out in the second indent of the second subparagraph of Article 12(1) of Regulation No 1546/88, under which a Member State may adopt as the reference period the first period of application from 1 April 1984 to 31 March 1985, instead of the second period of application, is insufficient. Where the fat content of a producer' s milk declined abnormally during the two periods in question, he is precluded from taking advantage of that clause. Consequently, he can use only part of his quota.

8 Reference is made to the Report of the Judge-Rapporteur for a fuller account of the facts of the case, the relevant law, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

9 In its first question, the national court essentially seeks to establish whether the first subparagraph and the second indent of the second subparagraph of Article 12(1) of Regulation No 1546/88 must be interpreted as meaning that a Member State is entitled to use a period of application not expressly mentioned in those provisions for the purposes of determining the fat content of milk which is regarded as representative. In its second question, the national court asks as to the validity of the second paragraph of Article 12(1) of Regulation No 1546/88, in particular the equity clause set out therein, in so far as it provides for only one other period of application to be used as the reference period for determining the representative fat content of milk.

Relevant legislation

10 In order usefully to answer those two questions, it should be recalled in limine that, under Article 2 of Council Regulation No 857/84, the reference quantity exempt from the additional levy on milk is equal to the quantity of milk or milk equivalent delivered or purchased during the reference year. According to Article 11(c) of that regulation, in order to establish those quantities of milk delivered or purchased, the Commission has to determine "the characteristics of the milk and, in particular, the fat content thereof, considered to be representative".

11 According to the first subparagraph of Article 12(1) of Regulation No 1546/88, the characteristics to be considered representative are those recorded for the milk delivered during the second period of application of the additional levy arrangements, namely 1 April 1985 to 31 March 1986. However, the second subparagraph of Article 12(1) sets out three exceptions to that rule. In particular, where the fat content of the milk delivered or purchased was abnormally low during the period referred to in the first subparagraph, the Member State may decide that the fat content considered to be representative is to be "the average content recorded during the first period of application of the additional levy arrangements", namely 1 April 1984 to 31 March 1985 (second indent of the second subparagraph).

Interpretation of Article 12(1) of Regulation No 1546/88

12 None of the aforementioned provisions of Article 12(1) of Regulation No 1546/88 allow account to be taken of a period of application not expressly provided for therein because the milk delivered has a low fat content, as the national court proposed in its first question.

13 As far as Articles 2 and 3(3) of Regulation No 857/84 concerning the determination of the reference quantity exempt from additional levy are concerned, the Court has already held that those provisions do not allow deliveries of milk outside the period between 1981 and 1983 laid down by Article 2 to be taken into account even when the persons concerned had no representative production during the whole of that period (see Case 84/87 Erpelding v Secrétaire d' Etat à l' Agriculture et à la Viticulture [1988] ECR 2647, Case 113/88 Leukhardt v Hauptzollamt Reutlingen [1989] ECR 1991 and Case C-177/90 Kuehn v Landwirtschaftskammer Weser-Ems [1992] ECR I-35).

14 The wording of Article 12(1) of Regulation No 1546/88 also makes it clear with regard to the period to be referred to in determining the fat content that the provisions of that article list exhaustively the situations in which another period may be chosen, and that they lay down precise rules on such periods. Consequently, Article 12(1) precludes any possibility of choosing in the producer' s favour a reference period prior to 1 April 1984 or later than 31 March 1986.

15 On those grounds, Article 12(1) of Regulation No 1546/88 must be interpreted as meaning that a Member State is entitled to use only the periods of application of the additional levy scheme expressly laid down by that provision for the purposes of determining the fat content of milk which is to be considered representative.

Validity of Article 12(1) of Regulation No 1546/88

16 In the light of this interpretation, the national court expresses doubts as to the validity of the provisions at issue. It considers that the equity clause set out in the second subparagraph of Article 12(1) of Regulation No 1546/88 is insufficient, since it gives the Member State the choice of only one other period of application, and that this insufficiency entails for certain milk producers, such as the plaintiff in the main proceedings, unequal treatment which is not objectively justified.

17 That argument based on discrimination between producers in the Community cannot be accepted any more than it was accepted in the judgments in Erpelding, Leukhardt and Kuehn (at paragraphs 30, 19 and 18, respectively).

18 The difference in treatment complained of by the plaintiff in the main proceedings results from the fact that, as the rules in question did not make provision for a fat content based on another more representative period to be used for producers in his situation, they affect that category of producers more severely than those who can rely on a representative fat content within the period provided for in Regulation No 1546/88. That effect is justified by the need to lay down, in the interests both of legal certainty and the effectiveness of the scheme of the additional levy on milk, a limitation on the number of periods which may be taken into account as reference periods. The resulting difference in treatment is therefore objectively justified and hence cannot be described as discriminatory.

19 That analysis is not invalidated by the fact that Article 12(1) of Regulation No 1546/88, which limits the choice to only one other reference period, is more restrictive than Article 3(3) of Regulation No 857/84, which was at issue in the case-law cited above. As the Commission has argued, first, it is impossible to go further back into the past than the period most recently chosen by all the Member States for the purpose of calculating the reference period and, secondly, the purpose of a quota system precludes taking a more recent period into account. Lastly, it should be observed that milk producers' interests are less affected by the determination of the fat content than by fixing the quantity of milk.

20 It follows from the foregoing that the reply to the question relating to the validity of the rules in question must be that consideration of the second subparagraph of Article 12(1) of Regulation No 1546/88, as amended by Regulation No 1033/89, has disclosed no factor of such a kind as to affect its validity.

Decision on costs

Costs

21 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. 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.

Operative part

On those grounds,

THE COURT (Third Chamber),

in answer to the questions referred to it by the Finanzgericht Baden-Wuerttemberg (Federal Republic of Germany), by order of 23 March 1992, hereby rules:

1. Article 12(1) of Commission Regulation (EEC) No 1546/88 of 3 June 1988 laying down detailed rules for the application of the additional levy referred to in Article 5c of Council Regulation (EEC) No 804/68, as amended by Commission Regulation (EEC) No 1033/89 of 20 April 1989, must be interpreted as meaning that a Member State is entitled to use only the periods of application of the additional levy scheme expressly laid down by that provision for the purposes of determining the fat content of milk which is to be considered representative.

2. Consideration of the second subparagraph of Article 12(1) of Commission Regulation (EEC) No 1546/88 of 3 June 1988, as amended by Commission Regulation (EEC) No 1033/89 of 20 April 1989, has disclosed no factor of such a kind as to affect its validity.

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