CELEX: 62002CJ0236
Milk and milk products
Direct sales
Reference quantity
Overruns
Additional levy on milk
Obligation on producer to keep stock accounts
Contents
Interpretation of Article 7(1)(f) of Regulation (EEC) No 536/93

By decision of 12 June 2002, received at the Court on 27 June 2002, the College van Beroep voor het bedrijfsleven (Administrative
court for trade and industry) referred to the Court for a preliminary ruling  under Article 234 EC a question on the interpretation
of Article 7(1)(f) of  Commission Regulation (EEC) No 536/93 of 9 March 1993 laying down detailed rules on the application
of the additional levy on milk and milk products (OJ 1993 L 57, p. 12).
That question was raised in the course of proceedings between Mr Slob, a milk producer, and the Productschap Zuivel (
Productschap) concerning the stock accounts which milk producers in possession of an individual reference quantity for the direct sale
of milk had to keep in the 1996/97 levy period.
Relevant provisions
Community legislation
Council Regulation (EEC) No 3950/92 of 28 December 1992 establishing an additional levy in the milk and milk products sector
(OJ 1992 L 405, p. 1) extended by seven new consecutive periods of twelve months commencing on 1 April 1993 the additional
levy scheme for milk introduced by Council Regulation (EEC) No 856/84 of 31 March 1984 amending Regulation (EEC) No 804/68
on the common organisation of the market in milk and milk products (OJ 1984 L 90, p. 10).
According to the sixth recital in the preamble to Regulation No 3950/92, if the total guaranteed quantities are overrun, the
consequence for the Member State is that
the producers who contributed to the overrun must pay the levy.
Article 2(1) of Regulation No 3950/92 provides: The levy shall be payable on all quantities of milk or milk equivalent marketed during the 12-month period in question in
excess of the relevant quantity referred to in Article 3. It shall be shared between the producers who contributed to the
overrun....   Under Article 9(c) and (h) of Regulation No 3950/92:
(c)
producer means a natural or legal person or a group of natural or legal   persons farming a holding within the geographical territory
of the   Community:
─
selling milk or other milk products directly to the consumer,and/or
selling milk or other milk products directly to the consumer,and/or
─
supplying the purchaser;
supplying the purchaser;
...
(h)
milk or milk equivalent sold directly for consumption means milk or milkproducts converted into milk equivalent, sold or transferred free without   going through an undertaking treating or processing
milk or other milk   products.
According to the second recital in the preamble to Regulation No 536/93, the provisions of the regulation concern, among other
things,
the rules on checks permitting verification of proper collection of the levy.
Article 1 of Regulation No 536/93 is worded as follows: For the purposes of calculating the additional levy introduced by Regulation (EEC) No 3950/92:
1.
within the meaning of Article 2(1) of that Regulation
quantities of milk  or milk equivalent marketed in a Member State means all quantities of milk or milk equivalent which leave any holding in the territory of that Member
State. ...
2.
the equivalence formulae to be used shall be: ...
─
1 kg butter = 22,5 kg milk.
...
Article 4(1) of Regulation No 536/93 provides: In the case of direct sales, at the end of each of the periods referred to in Article 1 of Regulation (EEC) No 3950/92, the
producer shall make a declaration summarising by product the quantities of milk and/or other milk products sold directly for
consumption and/or to wholesalers, cheese maturers and the retail trade....
Article 7(1) and (3) of Regulation No 536/93 state:
1.
Member States shall take all the verification measures necessary to ensure payment of the levy on quantities of milk and milk
equivalent marketed in excess of any of the quantities referred to in Article 3 of Regulation (EEC) No 3950/92. To that end:
...
(f)
producers with reference quantities for direct sales shall keep available to the competent authority of the Member State for
at least three years stock accounts by 12-month period with details of the quantities, per month and per product, of milk
and/or milk products sold directly for consumption and/or to wholesalers, cheese maturers and the retail trade, together with
registers of livestock held on holdings and used for milk production, in accordance with Article 4(1) of Council Directive
92/102/EEC ..., and supporting documents enabling such stock accounts to be verified.
3.
Member States shall physically verify the accuracy of the accounting with regard to the quantities of milk and milk equivalent
marketed and, to that end, shall check milk transport during collection at farms and shall, in particular, check:
...
(b)
at the premises of the producers with a reference quantity for direct sales,   the credibility of the declaration referred
to in Article 4(1) and the stock accounts referred to in paragraph 1(f).
...
Commission Regulation (EC) No 1392/2001 of 9 July 2001 laying down detailed rules for applying Council Regulation (EEC) No
3950/92 establishing an additional levy on milk and milk products (OJ 2001 L 187, p. 19) has repealed Regulation No 536/93
with effect from 31 March 2002. The first paragraph of Article 6(1) is identical to the first paragraph of Article 4(1) of
Regulation 536/93.
The second subparagraph of Article 6(2) of Regulation No 1392/2001 provides: The Member State may require producers with reference quantities for direct sales to declare that they have not sold any milk
during the period concerned, where such is the case.
Article 4(1)(a) of Council Directive 92/102/EEC of 27 November 1992 on the identification and registration of animals (OJ
1992 L 335, p. 32) is worded as follows:
1.
Member States shall ensure that:
(a)
any keeper of bovine or porcine animals listed in Directive 64/432/EEC and contained in the list provided for in Article
3(1)(a) keeps a register stating the number of animals present on the holding. This register shall include an up-to-date record of all births, deaths and   movements (numbers of animals concerned by each
entering and leaving operation) at least on the basis of aggregate movements, stating as appropriate their origin or destination,
and the date of such movements. The identification mark applied in conformity with Articles 5 and 8 shall be   stated in all cases. ...
National legislation
Articles 4, 26, 29 and 31 of the Regeling superheffing 1993 (Dutch order of 1993 on additional levies,
Nederlandse Staatscourant
1993 No 60, p. 18;
the Regeling superheffing), which introduced in the Netherlands the additional levy scheme for milk, provides: Article 4
1.
With regard to the direct sale for consumption of a quantity of milk or milk equivalent that exceeds his reference quantity
the producer shall be liable to pay a levy.
2.
The provisions of Article 2(2) shall apply mutatis mutandis.
Article 26The Productschap shall be responsible for the setting, imposition and collection of the levies referred to in Articles 2 ...
and 4.Article 29
1.
The producer referred to in Article 4 shall provide particulars to the Productschap, in accordance with the provisions of
Article 4 of Regulation (EEC) No 536/93 and in accordance with the rules adopted by the Productschap in this regard, of the
quantity of milk or other milk products that he has delivered directly to the consumer ... in the previous levy period, specified
per product.
...Article 31
1.
The ... producer who either is or may be liable to pay a levy pursuant to Articles ... 4, shall be obliged to keep records
in accordance with the provisions of Article 7 of Regulation (EEC) No 536/93 and in accordance with the rules adopted by the
Productschap.
2.
The productschap may, acting on its own initiative, determine the quantity delivered if the obligations laid down in the first
paragraph and in Article 27(2) and Article 29(1) are either not or, in the opinion of the Productschap, incompletely performed.
With effect from 31 March 2002, the Kingdom of the Netherlands exercised its right, referred to in the second subparagraph
of Article 6(2) and in conjunction with Article 29(7) of the Regeling superheffing, to require producers with reference quantities
for direct sales to declare that they have not sold any milk during the period under consideration, where such is the case.
Article 11(1) of the Zuivelverordening 1994, Uitvoering regeling superheffing (Order of 1994 implementing in the Netherlands
the regulation on additional levies, PBO-blad 1994, p. 26; hereinafter
the Zuivelverordening) reads as follows: The producer shall be obliged to keep records of everything regarding his business or holding in such a manner as to enable
the production, stock and the quantities received or delivered of processed or manufactured milk, together with the financial
data relating thereto, to be ascertained at all times, and to keep such records and data for a period of at least three years.
The main proceedings
Mr Slob is a milk producer in possession of an individual reference quantity of 647 910 kilograms for the direct sale of milk
in the 1996/97 levy period.
At the time of an inspection of his holding in December 1997, the Algemene Inspectiedienst (General Inspection Service;
the AID) of the Ministerie van Landbouw, Natuurbeheer en Visserij (Netherlands Ministry of agriculture, nature management and fisheries)
determined among other things that there was a difference of approximately 250 000 kilograms of milk between production capacity,
calculated on the basis of the size of the dairy herd kept by Mr Slob on his holding in the 1996/97 levy period on the one
hand, and sales, as shown on the declaration made to the Productschap by Mr Slob, on the other.
Mr Slob acknowledged that difference and explained that he had processed the 250 000 kilograms of milk in question into butter
in order to obtain buttermilk which he used to manufacture cheese. He claimed to have destroyed the butter produced in this
way, 10 000 kilograms, immediately after production, by throwing it in a manure pit. He did not keep any stock accounts in
relation to that production and destruction since such accounts were required only in relation to the cheese obtained at the
end of the process.
By decision of 1 October 1999, the Productschap, acting on its own initiative pursuant to Article 31(2) of the Regeling superheffing,
determined the quantities of milk and other milk products which Mr Slob delivered for consumption during the 1996/97 levy
period and informed the latter that he was liable for a sum of HFL 180 976.77 of additional levy in accordance with Article
4(2) of Regulation No 536/93.
Following an objection by Mr Slob, by decision of 4 April 2000 the Productschap reduced the amount of the additional levy.
However, it stated that the objections of Mr Slob were unfounded in so far as the abovementioned difference was concerned.
In that decision it determined that no accounts had been kept for approximately 250 000 kilograms of milk. It concluded that
Mr Slob had not kept a correct and complete record for the 1996/97 levy period of the production, stock and delivery of milk
and milk products, as prescribed by Article 7 of Regulation No 536/93, in conjunction with Article 31(1) of the Regeling superheffing
and Article 11 of the Zuivelverordening 1994.
Mr Slob lodged an appeal against the decision of 4 April before the referring court. The parties are divided over the question
of what happened to the 10 000 kilograms of butter in question. To Mr Slob's mind, the Productschap is wrong to submit that,
in the absence of records relating to the destruction of the butter, that quantity has also been sold.
Mr Slob takes the view that, in the light of the applicable Community legislation, he was not required to keep records in
relation to the products which had not been sold and had been destroyed. He claims that the quantity of butter in question
remained on his holding and that, for that reason, the obligation to keep records did not apply to that butter and that therefore
an additional levy was wrongly imposed.
The Productschap contends that Mr Slob was required to keep records regarding the milk in question.
The question referred
The national court points out that the producer's obligation under Article 4(1) and (2) of Regulation No 536/93 relates exclusively,
in view of its wording, to the quantities of milk and/or milk products sold during the period concerned and does not appear
to relate to non-delivered quantities. However it is uncertain whether the producer's obligations referred to in Article 7(1)(f)
of Regulation No 536/93 also relate to unsold quantities of milk products and, more specifically, whether the passage
details of the quantities, per month and per product, of milk and/or milk products sold directly for consumption ... must be regarded as regulating exhaustively what the stock accounts must include, or whether that passage is meant to indicate
that stock accounts must also mention the data in question here.
According to the national court, it is conceivable that the obligation to maintain a stock account must be understood in the
sense that the producer is required to record every operation relating to his production so that any difference between the
actual production and the recorded deliveries is made transparent for the national inspection and implementing authorities.
The fact that the checks for which the Member States are responsible under Article 7(3)(b) of Regulation No 536/93 are simplified
would militate in favour of that interpretation.
On the other hand, from the viewpoint of legal certainty, there could be objections to the acceptance of an obligation on
the producer which is not stated in so many words in the applicable legislation, particularly since the Productschap, on the
basis of Article 31(2) of the Regeling superheffing, attaches serious financial consequences to non-fulfilment of that obligation.
In those circumstances, the national court has decided to stay the proceedings and to refer the following question to the
Court for a preliminary ruling: Can it be inferred from Article 7(1)(f) of Regulation (EEC) No 536/93 that the producer is obliged to maintain accounts recording,
among other things, the availability, production, storage, use, processing and destruction of milk and/or milk products on
his holding, such
stock accounts also being required to contain declarations of the quantity per month and per product of the milk and/or milk products sold,
or does that provision only lay down an obligation to record those data as to sales?
The question referred
It should be stated at the outset that it is for the national court alone to determine the subject-matter of the questions
which it wishes to refer to the Court. The Court cannot, at the request of one party to the main proceedings, examine questions
which have not been submitted to it by the national court. If, in view of developments in the proceedings, the national court
were to consider it necessary to obtain further interpretations of Community law, it would be for that court to make a fresh
reference to the Court (see in particular Case 311/84
CBEM
[1985] ECR 3261, paragraph 10, and Case C-189/95
Franzén
[1997] ECR I-5909, paragraph 79).
The issue of whether the Member States are competent to enact legislation imposing reporting obligations on milk producers
within their territory that go beyond those in the provision to be interpreted, which was examined at the hearing, is not
the subject-matter of the question referred.
Article 7(1)(f) of Regulation No 536/93 provides that producers with reference quantities for direct sales are to keep both
stock accounts and registers of livestock held, in accordance with Article 4(1) of Directive 92/102.
The wording of Article 7(1)(f) of Regulation No 536/93 states that the stock accounts are to cover the quantities, per month
and per product, of milk and/or milk products sold directly. It does not refer to that data by way of example.
The second paragraph of Article 6(2) of Regulation No 1392/2001 also suggests an interpretation which excludes from stock
accounts data on such other matters as the availability, production, storage, use, processing and destruction of those products,
in so far as that provision expressly authorises the Member States, from 31 March 2002, to require producers with reference
quantities for direct sales to declare that they have not sold any milk during the period concerned, where such is the case.
It is true that, in a situation such as that in the main proceedings, a Member State may have difficulty in adequately and
efficiently accomplishing its task of verification under the first sentence of Article 7(1) of Regulation No 536/93.
However, the scheme of Article 7(1) and (3) is coupled with rules enabling checks to be carried out. Thus, Article 7(1)(f)
of Regulation No 536/93 makes it possible, by comparing the register of livestock with the stock accounts, to carry out a
first check on the quantities of milk and/or milk products sold directly. Likewise, Article 7(3) provides for on-the-spot
checks of the credibility of the stock accounts.
Moreover, any inadequacies in that verification process, in a situation such as that in the main proceedings, cannot be remedied
by imposing on producers, by means of a wide interpretation of Community law, with retroactive effect and serious financial
consequences, an obligation in the matter of stock accounts which they did not expect.
Such an interpretation would run counter to the principle of legal certainty. That principle, which is a fundamental principle
of Community law, requires in particular that a rule such as the one before the Court, which may lead to the imposition of
charges on the economic operators concerned, must be clear and precise, so that they know unequivocally what their rights
and obligations are and can take steps accordingly (see, to that effect,  Case C-143/93
Van Es Douane Agenten
[1996] ECR I-431, paragraph 27, and Case C-354/95
National Farmers' Union and Others
[1997] ECR I-4559, paragraph 57).
It follows from the foregoing considerations that the answer to the question referred must be that the first sentence of Article
7(1) and Article 7(1)(f) of Regulation No 536/93 should be interpreted as meaning that the stock accounts which producers
are required to keep need state only the quantities, per month and per product, of milk and/or milk products sold.
Costs
The costs incurred by the Netherlands Government and by the Commission, which have 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.
On those grounds,
THE COURT (Sixth Chamber),
in answer to the question referred to it by the College van Beroep voor het bedrijfsleven by decision of 12 June 2002, hereby
rules:
Gulmann
Cunha Rodrigues
Puissochet
Macken
Colneric
Delivered in open court in Luxembourg on 12 February 2004.
R. Grass
V. Skouris
Registrar
President
–
Language of the case: Dutch.