CELEX: 61982CJ0234
System of production quotas for steel
Action challenging a Commission decision imposing a fine

1 BY AN APPLICATION LODGED AT THE COURT REGISTRY ON 17 SEPTEMBER 1982 FERRIERE DI ROE VOLCIANO SPA BROUGHT AN ACTION UNDER THE SECOND PARAGRAPH OF ARTICLE 36 OF THE ECSC TREATY CHALLENGING THE COMMISSION ' S DECISION OF 13 AUGUST 1982 IMPOSING A FINE ON IT UNDER ARTICLE 58 OF THE ECSC TREATY AND UNDER COMMISSION DECISION NO 1831/81/ECSC OF 24 JUNE 1981     ESTABLISHING FOR UNDERTAKINGS IN THE IRON AND STEEL INDUSTRY A MONITORING SYSTEM AND A NEW SYSTEM OF PRODUCTION QUOTAS IN RESPECT OF CERTAIN PRODUCTS ( OFFICIAL JOURNAL , 1981 , L 180 , P . 1 ).
2 THE CONTESTED DECISION STATES THAT IN BREACH OF THE AFOREMENTIOND DECISION NO 1831/81 THE APPLICANT EXCEEDED BY 1 012 TONNES THE PRODUCTION QUOTA ALLOCATED TO IT BY THE COMMISSION FOR THE THIRD QUARTER OF 1981 IN RESPECT OF PRODUCTS FALLING WITHIN CATEGORIES V AND VI . IT THEREFORE IMPOSES ON THE APPLICANT A FINE OF 75 900 ECU ( 1 012 BY  75 ), EQUIVALENT TO LIT 100 284 193 .
3 THE APPLICANT SEEKS PRIMARILY TO HAVE THE CONTESTED DECISION DECLARED VOID OR , IN THE ALTERNATIVE , TO HAVE THE FINE REDUCED . IT ALSO REQUESTS THE COURT TO DECLARE THAT A RATE OF INTEREST OF 1% FOR EACH MONTH BY WHICH PAYMENT OF THE FINE IS DELAYED IS SATISFACTORY .
4 IN SUPPORT OF ITS CLAIM THAT THE DECISION SHOULD BE DECLARED VOID THE APPLICANT ARGUES THAT THE CONTESTED DECISION FAILS TO COMPLY WITH ARTICLE 14 OF DECISION NO 2794/80/ECSC AND WITH ARTICLES 3 AND 4 OF THE ECSC TREATY , THAT THE PRINCIPLE OF EQUITY WAS INFRINGED , THAT THE PRODUCTS PRODUCED IN EXCESS OF THE QUOTAS WERE PUT INTO STORAGE AND NOT PUT ON THE MARKET UNTIL NOVEMBER 1982 , AND THAT THE CONTESTED DECISION DISREGARDED THE FACT THAT THE APPLICANT WAS ENTITLED UNDER ARTICLE 11 ( 2 ) AND ( 3 ) OF DECISION NO 1831/81 , TO CARRY FORWARD PART OF ITS QUOTAS AND TO EXCEED THE QUOTAS BY A SMALL MARGIN .
5 THE COURT CONSIDERS IT NECESSARY TO EXAMINE FIRST THE SUBMISSION THAT THE CONTESTED DECISION DISREGARDED THE APPLICANT ' S ENTITLEMENT TO CARRY FORWARD PART OF ITS QUOTAS TO THE NEXT QUARTER .
6 ARTICLE 11 ( 3 ) OF DECISION NO 1831/81 IS WORDED AS FOLLOWS :
' ' ANY UNDERTAKING WHICH HAS NOT COME TO THE END OF ITS PRODUCTION QUOTAS OR OF THE PART OF ITS QUOTAS WHICH MAY BE DELIVERED ON THE COMMON MARKET MAY CARRY FORWARD INTO THE ENSUING QUARTER UP TO 5% OF , AS THE CASE MAY BE , THEIR QUOTAS OR PART OF QUOTAS FOR THE SAME CATEGORY OF PRODUCT . ' '
7 THE APPLICANT MAINTAINS THAT BY VIRTUE OF THAT PROVISION IT WAS ENTITLED TO CARRY FORWARD TO THE THIRD QUARTER OF 1981 A PROPORTION OF THE 2 512 TONNES OF THE QUOTA WHICH IT DID NOT USE UP DURING THE SECOND QUARTER OF 1981 , PROVIDED THAT THE AMOUNT CARRIED FORWARD DID NOT EXCEED 5% OF THE QUOTA OF 12 729 TONNES ALLOCATED TO IT FOR THE THIRD QUARTER OF 1981 , THAT IS TO SAY 636 TONNES . THE EXCESS PRODUCTION WITH WHICH IT IS CHARGED IS THEREBY REDUCED TO 376 TONNES .
8 THE COMMISSION REJECTS THAT ARGUMENT AND CONTENDS THAT IT WAS NOT POSSIBLE TO CARRY FORWARD PRODUCTION QUOTAS FROM THE SECOND QUARTER OF 1981 TO THE THIRD QUARTER OF 1981 BY REASON OF THE CHANGES MADE TO THE PRECEDING SYSTEM BY THE NEW GENERAL DECISION , DECISION NO 1831/81 , WHICH CAME INTO FORCE ON 1 JULY 1981 . THE COMMISSION EMPHASIZES , FIRST , THAT THAT DECISION INTRODUCED NEW RULES FOR CALCULATING THE AMOUNT WHICH MAY BE CARRIED FORWARD : UNDER THE SYSTEM ESTABLISHED BY DECISION NO 2794/80 UP TO 50% OF THE UNUSED PART OF THE QUOTA COULD BE CARRIED FORWARD TO THE FOLLOWING QUARTER , WHEREAS DECISION NO 1831/81 ENABLES UP TO 5% OF A QUOTA , OR OF THE PART OF A QUOTA WHICH MAY BE DELIVERED IN THE COMMON MARKET , TO BE CARRIED FORWARD WHERE THE QUOTA OR PART OF THE QUOTA HAS NOT BEEN EXHAUSTED . SECONDLY , DECISION NO 1831/81 PROVIDED A NEW CLASSIFICATION OF STEEL PRODUCTS : GROUP IV , DEFINED IN ARTICLE 2 OF DECISION NO 2794/80 AS COVERING ' ' LIGHT SECTIONS ( COILED WIRE ROD , CONCRETE REINFORCING BARS AND OTHER MERCHANT BARS ) ' ' , WAS SUBDIVIDED INTO THREE NEW CATEGORIES BY ARTICLE 1 OF DECISION NO 1831/81 ( CATEGORY IV : WIRE ROD , CATEGORY V : REINFORCING BARS , CATEGORY VI : MERCHANT BARS ).
9 IT SHOULD BE NOTED , AS THE COMMISSION HAS ITSELF RECOGNIZED , THAT THE POSSIBILITY OF CARRYING FORWARD TO THE FOLLOWING QUARTER ALL OR PART OF THE UNUSED PORTION OF A QUOTA ALLOCATED FOR THE PREVIOUS QUARTER EXPRESSES THE COMMISSION ' S WISH TO MAKE THE APPLICATION OF THE GENERAL SYSTEM OF PRODUCTION QUOTAS MORE FLEXIBLE , SO AS TO TAKE INTO ACCOUNT THE DIFFICULTIES ENCOUNTERED BY PRODUCERS IN ADAPTING THE RHYTHM OF THEIR PRODUCTION TO A SYSTEM OF QUARTERLY QUOTAS .
10 IT MUST BE NOTED , MOREOVER , THAT ALL THE GENERAL DECISIONS ADOPTED BY THE COMMISSION SINCE 1980 ESTABLISHING THE SUCCESSIVE SYSTEMS OF PRODUCTION QUOTAS FOR STEEL WHICH HAVE APPLIED SINCE THE FOURTH QUARTER OF 1980 MADE PROVISION FOR SUCH CARRYING FORWARD FROM ONE QUARTER TO THE NEXT . MORE     SPECIFICALLY , DECISION NO 1831/81 DID NOT CONTAIN ANY PROVISION EXCLUDING THE POSSIBILITY OF CARRYING FORWARD UNUSED QUOTAS FROM THE SECOND QUARTER OF 1981 TO THE THIRD QUARTER .
11 IN THOSE CIRCUMSTANCES THE COMMISSION WAS UNDER A DUTY TO ENSURE , FOR THE BENEFIT OF EVERY PRODUCER , THE CONTINUITY OF THE SYSTEM OF CARRYING FORWARD QUOTAS BETWEEN THE SECOND AND THIRD QUARTERS OF 1981 , AT LEAST IN SO FAR AS THE AMENDMENTS MADE BY DECISION NO 1831/81 TO THE SYSTEM WHICH HAD PREVIOUSLY BEEN IN FORCE DID NOT MAKE IT TECHNICALLY IMPOSSIBLE TO CALCULATE THE AMOUNT WHICH THE PRODUCER IN QUESTION WAS ENTITLED TO CARRY FORWARD . THE RELEVANCE OF THE ARGUMENTS PUT FORWARD BY THE COMMISSION IN ITS DEFENCE MUST BE EXAMINED IN THE LIGHT OF THAT DUTY .
12 IN THAT RESPECT , IT MUST BE NOTED THAT NO DIFFICULTIES OF A TECHNICAL NATURE PREVENTED ARTICLE 11 ( 3 ) OF DECISION NO 1831/81 FROM BEING APPLIED IN FAVOUR OF THE APPLICANT .
13 IN FACT , THE COMMISSION ' S FIRST ARGUMENT , BASED UPON THE ALTERATION IN THE METHOD OF CALCULATING THE AMOUNT WHICH MAY BE CARRIED FORWARD , IS WITHOUT SUBSTANCE , SINCE THAT ALTERATION DOES NOT , OF ITSELF , PREVENT THE AMOUNT TO BE CARRIED FORWARD FROM BEING CALCULATED ON THE BASIS OF THE NEW PROVISIONS .
14 SECONDLY , WITH REGARD TO THE ARGUMENT CONCERNING THE NEW CLASSIFICATION OF STEEL PRODUCTS ESTABLISHED WITH EFFECT FROM THE THIRD QUARTER OF 1981 , IT IS SUFFICIENT TO NOTE THAT THE UNDERTAKING IN QUESTION PRODUCED ONLY ONE CATEGORY OF PRODUCT DURING THE SECOND AND THIRD QUARTERS OF 1981 , NAMELY CONCRETE REINFORCING BARS . THE FACT THAT SUCH BARS WERE ORIGINALLY CLASSIFIED IN GROUP IV BY DECISION NO 2794/80 AND WERE THEN PLACED IN CATEGORY V BY DECISION NO 1831/81 DID NOT MAKE IT IMPOSSIBLE , OR EVEN MORE DIFFICULT , TO CALCULATE THE AMOUNT OF THE QUOTA WHICH THE APPLICANT WAS ENTITLED TO CARRY FORWARD .
15 IT WOULD APPEAR , IN THOSE CIRCUMSTANCES , THAT THE APPLICANT WAS ENTITLED TO CARRY FORWARD TO THE THIRD QUARTER OF 1981 PART OF THE UNUSED PORTION OF THE QUOTA ALLOCATED TO IT FOR THE SECOND QUARTER OF 1981 , WITHIN THE LIMIT SET BY ARTICLE 11 ( 3 ) OF DECISION NO 1831/81 , THAT IS TO SAY UP TO 5% OF THE QUOTA ALLOCATED FOR THE SECOND QUARTER OF 1981 .
16 IN FACT , IT IS CLEAR FROM THE EVIDENCE , FIRST , THAT THE COMMISSION INFORMED THE APPLICANT ON 6 APRIL 1981 THAT IT HAD BEEN ALLOCATED A QUOTA OF 13 789 TONNES FOR THE SECOND QUARTER OF 1981 IN RESPECT OF PRODUCTS FALLING WITHIN GROUP IV AND , SECONDLY , THAT ITS PRODUCTION OF REINFORCING BARS IN THAT QUARTER ONLY AMOUNTED TO 11 217 TONNES , WHICH FIGURE HAS NOT BEEN DISPUTED . THE UNUSED PORTION OF THE QUOTA ALLOCATED FOR THAT QUARTER THEREFORE AMOUNTS TO 2 512 TONNES .
17 CONSEQUENTLY , THE APPLICANT WAS ENTITLED TO CARRY FORWARD A PROPORTION OF THAT AMOUNT NOT EXCEEDING 5% OF THE QUOTA OF 13 789 TONNES , THAT IS TO SAY 689 TONNES .
18 AS A RESULT THE AMOUNT WHICH IT PRODUCED UNLAWFULLY IN EXCESS OF ITS QUOTA IS REDUCED FROM 1 012 TONNES TO 323 TONNES .
19 AS THE COMMISSION ITSELF ADMITTED AT THE HEARING , IT FOLLOWS A WELL ESTABLISHED PRACTICE , IN RELATION TO ALL UNDERTAKINGS IN THE STEEL INDUSTRY , OF WAIVING THE IMPOSITION OF A FINE WHERE AN UNDERTAKING INFRINGES THE QUOTA SYSTEM FOR THE FIRST TIME AND EXCEEDS ITS QUOTA BY LESS THAN 500 TONNES .
20 IT IS ACCEPTED THAT THE TWO CONDITIONS UPON WHICH THE OPERATION OF THAT PRACTICE DEPENDS ARE SATISFIED IN THIS CASE .
21 CONSEQUENTLY , THE COMMISSION WAS PRECLUDED FROM IMPOSING A FINE ON THE APPLICANT BY VIRTUE OF THE PRINCIPLE OF EQUALITY , WHICH REQUIRES THAT SIMILAR SITUATIONS SHOULD NOT BE TREATED DIFFERENTLY , UNLESS DIFFERENT TREATMENT CAN BE JUSTIFIED OBJECTIVELY , WHICH IS NOT THE CASE HERE .
22 FROM THE WHOLE OF THE FOREGOING , AND WITHOUT ITS BEING NECESSARY TO CONSIDER THE OTHER SUBMISSIONS PLEADED , IT FOLLOWS THAT THE APPLICANT WAS JUSTIFIED IN SEEKING A DECLARATION THAT THE CONTESTED DECISION IMPOSING A FINE ON IT WAS VOID .
23 ACCORDINGLY , THE SUBMISSIONS PLEADED IN THE ALTERNATIVE FOR THE REDUCTION OF THE FINE AND THE SUBMISSIONS CONCERNING THE RATE OF INTEREST APPLICABLE TO FINES IMPOSED IN 1982 HAVE LOST THEIR PURPOSE AND IT IS THEREFORE NOT NECESSARY TO GIVE A RULING ON THEM .
Decision on costs
COSTS
24 ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE PROVIDES THAT THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS . AS THE COMMISSION HAS FAILED IN ITS SUBMISSIONS , IT MUST BE ORDERED TO PAY THE COSTS .
Operative part
ON THOSE GROUNDS ,
THE COURT ( FIFTH CHAMBER )
HEREBY :
1 . DECLARES VOID THE COMMISSION ' S DECISION OF 13 AUGUST 1982 IMPOSING A FINE OF 75 900 ECU ON FERRIERE DI ROE VOLCIANO SPA ; AND
2.ORDERS THE COMMISSION TO PAY THE COSTS .