CELEX: 62010CJ0505
Directive 92/81/EEC
Excise duties on mineral oils
Exemption
Concept of ‘navigation’
Fuel used for an excavator affixed to a vessel and operating independently of the vessel’s engine

This reference for a preliminary ruling concerns the interpretation of Article 8 of Council Directive 92/81/EEC of 19 October
1992 on the harmonisation of the structures of excise duties on mineral oils (OJ 1992 L 316, p. 12), as amended by Council
Directive 94/74/EC of 22 December 1994 (OJ 1994 L 365, p. 46) (‘Directive 92/81’).
The reference has been made in the context of proceedings between Partrederiet Sea Fighter (‘Sea Fighter’) and the Skatteministeriet
(Danish Ministry for Fiscal Affairs) concerning the latter’s refusal to exempt from the excise duty on mineral oils which
are fuels used by an excavator affixed to a vessel belonging to Sea Fighter.

Legal context

European Union legislation
Article 8 of Directive 92/81 states:
‘1. In addition to the general provisions set out in 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)] on exempt
uses of excisable products, and without prejudice to other Community provisions, Member States shall exempt the following
from the harmonised excise duty under conditions which they shall lay down for the purpose of ensuring the correct and straightforward
application of such exemptions and of preventing any evasion, avoidance or abuse:
…
(c)      mineral oils supplied for use as fuel for the purposes of navigation within Community waters (including fishing), other than
in private pleasure craft.
For the purposes of this Directive, “private pleasure craft” shall mean any craft used by its owner or the natural or legal
person who enjoys its use either through hire or through any other means, for other than commercial purposes and in particular
other than for the carriage of passengers or goods or for the supply of services for consideration or for the purposes of
public authorities;
…
2.      Without prejudice to other Community provisions, Member States may apply total or partial exemptions or reductions in the
rate of duty to mineral oils or to other products intended for the same uses which are used under fiscal control:
…
(b)      for navigation on inland waterways other than for private pleasure craft;
…
(g)      in respect of dredging operations in navigable waterways and in ports.
…’

National legislation
Article 8(1)(c) of Directive 92/81 has been implemented in Danish law by section 9(4) of the Law on the duty on mineral oils
(Mineralolieafgiftsloven) and section 7(4) of the Law on the duty on carbon dioxide (Kuldioxidafgiftsloven).
The enabling provision in Article 8(2)(g) of Directive 92/81 has not been taken up in Danish law.
Paragraph 1 of section 9(4) of the Law on the duty on mineral oils reads as follows:
‘Duty shall be reimbursed in respect of … goods used for rail or boat transport and for commercial navigation with vessels
other than those referred to in paragraph 1(3), apart from private pleasure craft …’
Paragraph 1 of Article 7(4) of the Law on duties on carbon dioxide provides inter alia:
‘Duty shall be repaid in respect of … goods subject to duty …. used by a business registered under the Law on value added
tax for navigation with ships and fishing vessels.’

The dispute in the main proceedings and the question referred for a preliminary ruling
The
M/S Grete Fighter
is a purpose-built vessel operated by Sea Fighter for marine excavation and construction works. The vessel has permanently-affixed
digging equipment on the deck of the vessel which operates with its own motor and its own fuel tank. The excavator operates
independently of the vessel’s propulsion engine. The fuel used to replenish the fuel tank of the excavator’s motor comes from
the vessel’s main fuel tank. When the excavator is used for digging, the vessel is anchored, whereas it is in motion when
the excavated material is dumped at sea. Sea Fighter sought reimbursement of duties paid on mineral oils used on the
M/S Grete Fighter
in the period 1 January 2001 to 30 September 2003.
By decision of 19 February 2004 the ToldSkat Østjylland (East Jutland Customs and Tax Office) found that, for that period,
Sea Fighter was not entitled to reimbursement of oil and carbon dioxide duties for diesel fuel used for the excavator. It
noted in particular that the excavator ran independently of the vessel’s engine.
The Landskatteretten (National Tax Appeals Commission) upheld that decision on 4 March 2005.
Sea Fighter appealed against that decision to the Vestre Landsret (Western Regional Court) which found in favour of the tax
administration in a judgment of 29 February 2008.
That judgment was the subject of an appeal to the Højesteret (Supreme Court) which decided to stay the proceedings and to
refer the following question to the Court of Justice for a preliminary ruling:
‘Is Article 8(1)(c) of Directive 92/81 … to be interpreted as meaning that mineral oils supplied for use in an excavator which
is affixed to a vessel but which, because it has its own separate motor and fuel tank, operates independently of the vessel’s
propulsion engine, in circumstances such as those of the present case, are exempt from duty?’

Consideration of the question referred
It should be noted at the outset that, it is apparent from the third and fifth recitals in the preamble to Directive 92/81
that the latter is intended to render more precise a number of common definitions for mineral oil products which are to be
subject to the general excise system and to lay down certain exemptions relating to those products which are obligatory at
European Union level (see Case C-389/02
Deutsche See-Bestattungs-Genossenschaft
[2004] ECR I-3537, paragraph 17, and Case C-391/05
Jan De Nul
[2007] ECR I-1793, paragraph 21).
Therefore, the provisions concerning those exemptions should be interpreted independently on the basis of their wording and
the purpose of Directive 92/81 (see
Deutsche See-Bestattungs-Genossenschaft
, paragraph 19, and
Jan De Nul
, paragraph 22).
As regards the first subparagraph of Article 8(1)(c) of Directive 92/81, under the terms of which mineral oils supplied for
use as fuel for the purposes of navigation within European Union waters are exempted from the harmonised excise duty, it should
be pointed out that that provision provides for one exception to the exemption system in providing that the exemption does
not apply to mineral oils used for navigation ‘in private pleasure craft’. The second subparagraph of that provision defines
the notion of ‘private pleasure craft’ as being vessels used ‘for other than commercial purposes’ (see
Deutsche See-Bestattungs-Genossenschaft
, paragraph 22).
The Court therefore held, at paragraphs 23 and 25 of that judgment, that all navigation activity for commercial purposes comes
within the scope of the exemption from the harmonised excise duty provided for in the first subparagraph of Article 8(1)(c)
of Directive 92/81, without any distinction being made as to the purpose of the navigation referred to.
Thus, the purpose of a vessel’s voyage within European Union waters is irrelevant for the application of the exemption of
mineral oils from excise duties when that navigation involves the provision of services for consideration.
As regards the technical characteristics of such navigation, the Court stated, at paragraph 40 of
Jan De Nul
, that manoeuvres carried out by a hopper dredger during its pumping and discharge of materials, that is to say, movements
inherent in the carrying out of dredging activities, come within the scope of the term ‘navigation’ as used in the first subparagraph
of Article 8(1)(c) of Directive 92/81. Thus, that term requires that the provision of services for consideration be inherent
in the vessel’s movement.
On the other hand, that provision cannot be interpreted as meaning that it may be applied to all services provided from a
vessel within European Union waters, that is to say, to the consumption of mineral oils which is not linked to a vessel’s
movement.
It is apparent from the wording of that provision that the exemption at issue is subject to the requirement that the mineral
oils be used as fuel for the purposes of navigation within European Union waters.
Furthermore, it is evident from the purpose of Directive 92/81, namely that Member States are to impose a harmonised excise
duty on mineral oils, that the directive does not seek to establish general exemptions.
As regards the case in the main proceedings, it is not disputed that the consumption of mineral oils by the excavator affixed
to the vessel at issue is totally independent of the vessel’s propulsion.
In those circumstances, that consumption cannot be considered to be inherent in the movement of the vessel to which the excavator
is affixed.
Therefore, the answer to the question is that Article 8(1)(c) of Directive 92/81 must be interpreted as meaning that mineral
oils supplied for use in an excavator which is affixed to a vessel but which, because it has its own separate motor and fuel
tank, operates independently of the vessel’s propulsion engine, are not exempt from excise duties.

Costs
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 (Third Chamber) hereby rules:
Article 8(1)(c) of Council Directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of excise duties
on mineral oils, as amended by Council Directive 94/74/EC of 22 December 1994, must be interpreted as meaning that mineral
oils supplied for use in an excavator which is affixed to a vessel but which, because it has its own separate motor and fuel
tank, operates independently of the vessel’s propulsion engine, are not exempt from excise duties.
[Signatures]
*
Language of the case: Danish.