Opinion of the Advocate General — ECLI:EU:C:2020:309
Date: 2020-04-23
Language of the case: Spanish
Subject matter: Energy;Taxation
Procedure: Reference for a preliminary ruling
Origin: Spain

Translation C-44/19 — 1 
Case C-44/19 
Request for a preliminary ruling 
Date lodged: 
24 January 2019 
Referring court: 
Tribunal Supremo (Spain) 
Date of the decision to refer: 
27 June 2018 
Appellant: 
Repsol Petróleo, S.A. 
Respondent: 
Administración del Estado 
  
EN 
REQUEST FOR A PRELIMINARY RULING OF 27.6.2018 — CASE C-44/19 
 
2  
 
APPEAL ON A POINT OF LAW […] 
[…] 
TRIBUNAL SUPREMO (Supreme Court, Spain) 
Administrative Division 
Second Chamber 
Order […] 
[…] [composition of the referring court] 
Madrid, 27 June 2018. 
[OMISSIS] [Rapporteur] 
BACKGROUND [OR. 2] 
FIRST.— The main dispute raised and decided in the proceedings at first 
instance whose judgment is the subject of the present appeal […] 
The proceedings at first instance were initiated by REPSOL PETRÓLEO, S.A., 
(‘Repsol’) against the administrative decision which dismissed the complaint it 
had brought against the recovery notice issued to it in respect of the excise duty on 
mineral oils for the years 2007 and 2008. 
The reason for that recovery notice was the adjustment of the self-consumption of 
fuel oil and fuel gas in the production process of mineral oils or energy products 
carried out in the refineries of [Repsol]; an adjustment which, in the tax 
authority’s view, had to be made taking into account the proportion of that self-
consumption which corresponded to the residual products obtained that were not 
mineral oils within the meaning of Ley 38/1992, de 28 de diciembre, de Impuestos 
Especiales (Law No 38/1992 of 28 December 1992 on excise duties, ‘the LIE’). 
Repsol primarily claimed in those proceedings at first instance that the 
regularisation or adjustment drawn up in the recovery notice at issue infringed 
Article 21(3) of Directive 2003/96 of 27 October (restructuring the Community 
framework for the taxation of energy products and electricity), because it was 
based on an interpretation of Article 47(1)(b) of the LIE which is inconsistent with 
that provision of the directive. 
The main argument put forward in support of that claim is that the tax authority 
made the non-taxation of the self-consumption at issue subject to a condition not 
provided for in the directive or the LIE, namely that all products generated 
REPSOL PETRÓLEO 
 
3 
through self-consumption had to be mineral oils and, consequently, energy 
products. 
Repsol claimed in the alternative that, in the event that its interpretation of 
Article 21(3) of the directive was not accepted, the corresponding question should 
be referred to the Court of Justice of the European Union for a preliminary ruling. 
[OR. 3] 
In the judgment under appeal, the primacy of EU law was declared and, on that 
basis, two decisions were adopted. 
First, it was held that the self-consumption of fuel oil and fuel gas was not subject 
to taxation for the proportion corresponding to the production of products which 
could be regarded as mineral oils within the meaning of the LIE, given that, as the 
production process of refining crude oil is integral, the so-called proportional 
method had to be applied to that self-consumption. 
Secondly, the taxation of the self-consumption which the tax authority had 
attributed to non-energy products was held to be lawful. 
SECOND.— The grounds of the judgment under appeal concerning the 
taxation of the proportion of the self-consumption corresponding to the 
production of products which are not deemed to be mineral oils [even though 
they are produced within the same production process in which the energy 
products that Repsol places on the market as consumer goods are produced]. 
1. The judgment under appeal takes the following three provisions into 
consideration. 
– Article 47(1)(b) of the LIE. 
‘Cases not subject to the excise duty. 
The excise duty shall not be charged on self-consumption involving: […]. 
(b) the use of mineral oils as fuel in the production process of mineral oils 
under an excise duty suspension arrangement’. [OR. 4] 
– Article 4(3) of Directive 92/81. 
‘3. The consumption of mineral oils within the curtilage of an establishment 
producing mineral oils shall not be considered a chargeable event giving 
rise to excise duty as long as the consumption is for the purpose of such 
production. 
However, where such consumption is for purposes not related to that 
production and in particular for the propulsion of vehicles, this shall be 
considered a chargeable event giving rise to excise duty’. 
REQUEST FOR A PRELIMINARY RULING OF 27.6.2018 — CASE C-44/19 
 
4  
– Article 21(3) of Directive [2003]/96 of 27 October 2003 [restructuring 
the Community framework for taxation of energy products and 
electricity], which replaces the previous directive. 
‘3. ‘The consumption of energy products within the curtilage of an 
establishment producing energy products shall not be considered as a 
chargeable event giving rise to taxation, if the consumption consists of 
energy products produced within the curtilage of the establishment. 
Member States may also consider the consumption of electricity and other 
energy products not produced within the curtilage of such an establishment 
and the consumption of energy products and electricity within the curtilage 
of an establishment producing fuels to be used for generation of electricity 
as not giving rise to a chargeable event. Where the consumption is for 
purposes not related to the production of energy products and in particular 
for the propulsion of vehicles, this shall be considered a chargeable event, 
giving rise to taxation’. 
2. The judgment under appeal refers to case-law by which, on the basis of 
Article 47(1)(b) of the LIE and Article 4(3) [of Directive 92/81], it was held that 
the self-consumption of energy products in order to obtain products that are not 
mineral oils could not be excluded from taxation (from the chargeable event) 
(citing, inter alia, the Supreme Court judgment of 16 September 2010 ― appeal 
No 5157/2005―, which reiterates the position taken in the [OR. 5] previous 
Supreme Court judgments of 8 July 2010 ― appeal No 4779/2005― and 27 May 
2009 ― appeal No 7096/2003―). 
3. The judgment under appeal states that the new Directive 2003/96 does not 
entail a departure from the previous Directive 92/81 that prevents the application 
of the existing case-law; and it holds that, accordingly, as the compatibility of the 
LIE with Directive 2003/96 is clear, the matter should not be referred for a 
preliminary ruling. 
THIRD.— […] [preparation of the appeal and the decision declaring it 
admissible] [OR. 6] 
FOURTH.— The appeal brought by Repsol, S.A. 
1. — Repsol’s claims. 
Primarily, Repsol requests that the appeal be upheld and, setting aside the 
judgment under appeal, [that] the Supreme Court adjudicate on the dispute raised 
in this case and resolve it by annulling the part of the recovery notice which 
declared taxable the self-consumption attributed to the production of products 
which cannot be regarded as energy products under Directive 2003/96. 
REPSOL PETRÓLEO 
 
5 
Alternatively, only in the event that the Supreme Court considers that, in 
accordance with Article 21(3) of Directive 2003/96, the consumption of fuel oil 
and fuel gas in refineries which the Inspectorate attributed to the production of 
products that are not energy products (Article 2 of Directive 2003/96) should be 
subject to the excise duty on mineral oils, Repsol requests that the following 
question be referred to the Court of Justice of the European Union for a 
preliminary ruling: 
[‘]Is the interpretation of Article 47(1)(b) of the LIE as meaning that the 
self-consumption of energy products in a refinery is subject to the excise 
duty on mineral oils in the proportion in which non-energy products are 
obtained compatible with EU law, and, more specifically, with Article 21(3) 
of Directive 2003/96? 
Taking into account that the following conditions are met: 
(i) the energy products consumed in the refinery were produced in the 
refinery itself; 
(ii) those products are used in that refinery as fuel in the production 
process of energy products under an excise duty suspension 
arrangement; 
(iii) their self-consumption is related to the production of energy products 
in the same establishment; and 
(iv) in that production process, considered as a whole, in addition to 
producing energy products, other residual products are inevitably and 
undesirably [produced] which cannot be regarded as [OR. 7] energy 
products under Article 2 of Directive 2003/96 (for example, the 
sulphur which is removed from the energy products produced in that 
production process)’. 
2.— The infringements of the legislation allegedly made in the judgment 
under appeal. 
The following provisions have allegedly been infringed: 
– Article 47(1)(b) of the LIE; and 
– Article 21(3) of Council Directive 2003/96/EC of 27 October 2003 
restructuring the Community framework for taxation of energy 
products and electricity (‘Directive 2003/96’). 
3.— The arguments put forward to substantiate those infringements. 
Repsol argues that the court adjudicating at first instance erred in its interpretation 
of Article 47(1)(b) of the LIE and Article 21(3) of Directive 2003/96, which led it 
REQUEST FOR A PRELIMINARY RULING OF 27.6.2018 — CASE C-44/19 
 
6  
to take the view that the proportion of the self-consumption of fuel oil and fuel gas 
that is related to the production of non-energy products should be subject to the 
excise duty on mineral oils. That must be regarded as incorrect because the court 
overlooked the fact that the aim of those provisions is to subject to taxation only 
mineral oils or energy products which are released for consumption but not those 
whose use is necessary and mandatory within the refining process to obtain final 
energy products, even where other non-energy products are inevitably obtained in 
that process. 
The main point developed in support of that alleged error of interpretation is the 
different wording of the two directives and the necessary legislative amendment 
which it involves. This can be explained as follows: [OR. 8] 
– Article 4(3) of Directive 92/81 […] 
[…] 
[…] [text of the article cited above] expressly required, in order to exclude the 
consumption of mineral oils from the chargeable event, that that consumption 
‘[be] for the purpose of such production’ (of mineral oils). 
– Article 21(3) of the new Directive 2003/96 […] 
[…] 
[…] [text of the article cited above] should, according to the appellant, be 
construed as meaning that the explicit purpose that appeared in the previous 
directive is no longer required when determining the self-consumption that is 
exempt from taxation; it is sufficient, for that purpose, that the consumption 
should occur within the curtilage of an establishment producing energy products. 
[OR. 9] 
– Repsol also states that this approach to interpretation has been 
followed by the Tribunal Superior de Justicia del País Vasco (High 
Court of Justice, Basque Country, Spain) (judgment No 503/2016 of 
16 November 2016; administrative appeal No 451/2015). 
– That judgment of the court for the territory of the Basque Country, 
which is cited in the judgment under appeal here, states, in the third 
legal ground, the following: 
‘Article 21(3) of Directive 2003/96/EC does not make non-taxation (‘negatively’) 
conditional upon the fact that the self-consumption of energy products within the 
curtilage of the producing establishment is carried out for the purpose of 
producing energy products, without that consumption having any other output, 
but (on the contrary) that it is carried out for purposes related to the production 
of energy products. It would be absurd to establish such a condition or exception 
to the non-taxation rule bearing in mind that the (ad hoc, derivative or residual) 
REPSOL PETRÓLEO 
 
7 
generation of non-energy products (such as CO2 or sulphur) is inevitable in the 
single, indivisible process of producing energy products through the self-
consumption of the latter. 
Nor did Article 4(3) of Directive 92/81/EEC make the application of the non-
taxation regime conditional upon linking the self-consumption of mineral oils to 
the production solely of products of that kind, but on the fact that the consumption 
is for the purpose of such production, even though that provision is, as the 
appellant has also noted, more restrictive in that regard than Article 21(3) of 
Directive 2003/96/EC. 
Therefore, the EU legislation applicable to this case does not negatively define the 
chargeable event by the cause-effect relationship between the self-consumption of 
energy products under an excise duty suspension arrangement and the output of 
that consumption, but by its purpose or finality determined by linking the self-
consumption with the production of energy products. 
In conclusion, the recovery notices under appeal must be annulled in so far as 
they subject to taxation the self-consumption of [energy] products (fuel oil and 
fuel gas) produced in the appellant’s establishment in Biscay for the purposes of 
producing new products of that kind, while also generating different products 
(sulphur and CO2)’. 
The fifth legal ground in that judgment adds: 
‘The judgments of the Supreme Court of 17 September 2010 (appeal 
No 4355/2005) and of 18 November 2010 (appeal No 3109/2007) were issued in 
respect of recovery notices for the years 2000 and 2002 which [OR. 10] did not 
apply Directive 2003/96/EC but Directive 92/81/EEC and, having regard to the 
differences between the regime of non-taxation of the self-consumption of mineral 
oils provided for in Article 21(3) of Directive 2003/96 and Article 4(3) of 
Directive 92/81 respectively, the first having broader scope, those judgments 
cannot be regarded, beyond their illustrative value, as decisive in these 
proceedings. 
The same can be said of the judgments of the Audiencia Nacional (National High 
Court, Spain) (…), apart from the extrapolation of their grounds to the matter at 
issue in these proceedings, bearing in mind what has just been stated on the 
subject of the broader scope of the non-taxation regime laid down by Article 21(3) 
of Directive 2003/96/EC in comparison to that established previously by 
Article 4(3) of Directive 92/81/EEC. 
In conclusion, the interpretation of Article 47(1)(b) of the [LIE] in accordance 
with the meaning and scope of Article [21(3)] in conjunction with Article 2(1) and 
[2(4)(b)] of Directive 2003/96/EC entails the application of the non-taxation 
regime proposed by the appellant in respect of the self-consumption of fuel oil and 
fuel gas which is related to the production of energy products (including bitumen) 
REQUEST FOR A PRELIMINARY RULING OF 27.6.2018 — CASE C-44/19 
 
8  
in addition to other non-energy products (sulphur, CO2) and which has been 
made subject to taxation by the recovery notices under appeal’. 
FIFTH.— The order […] granting the parties a period in which to make 
submissions on whether a request for a preliminary ruling should be made. 
[internal procedure and repetition of the question for which the appellant seeks 
referral for a preliminary ruling] 
[…] [OR. 11] 
[…] 
SIXTH.— Submissions of the parties. 
Repsol argues in its submissions that the referring of the question for a 
preliminary ruling is essential to the outcome of the appeal. 
The Abogado del Estado (State Counsel), intervening in the appeal to represent 
and defend the Administración General del Estado (General State Administration, 
Spain), the respondent, opposes the making of a reference for a preliminary ruling. 
The State Counsel primarily contends that the exception set out in the second 
subparagraph of Article 4(3) of Directive 92/81/EC and the exception set out in 
the third sentence of Article 21(3) of Directive 2003/96 are in essence identical, 
and states in that regard that: ‘in both cases, there is considered to be a 
chargeable event if the consumption is carried out for purposes not related to the 
production of energy products’. 
POINTS OF LAW 
SOLE POINT.— Grounds which, in the Supreme Court’s view, militate in 
favour of referring the question for a preliminary ruling. [OR. 12] 
I.— In order to resolve the dispute in the present appeal, the Supreme Court must 
compare the provisions of the two directives that have successively governed the 
matter at issue: 
Article 4(3) of Directive 92/81: 
[…] [text of the article already cited] 
Article 21(3) of Directive 2003/96: 
[…] [text of the article already cited] 
REPSOL PETRÓLEO 
 
9 
II.— Following this comparison, it must be resolved whether the change in the 
wording of the provision of the second Directive 2003/96, namely the removal of 
the words ‘is for the purpose of such production’, must be regarded as a legislative 
amendment as a result of which it must be held that the self-consumption of 
energy products that relates to final products which, obtained in the same 
production process, are not deemed to be energy products is also not subject to 
taxation. [OR. 13] 
In other words, the explicit inclusion of the words ‘is for the purpose of such 
production’ (of mineral oils) permitted the understanding that Directive 92/81 
limited consumption not constituting a chargeable event to consumption which 
met the following requirements: (a) the consumption occurred in a process of 
production of mineral oils; and (b) in the case of a production process whose 
output was both mineral oils and products not regarded as such, that consumption 
not constituting a chargeable event remained limited solely to the portion 
consumed which was proportionately attributable to the part of the output 
produced which could be regarded as mineral oil. 
As those words have been removed, and as some of the instances of consumption 
that Directive 2003/96 considers a chargeable event encompass consumption 
which ‘is for purposes not related to the production of energy products’, the 
question arises whether the new rule sought to exclude from the chargeable event 
any consumption that has some kind of connection to the production of energy 
products, that is to say, both the consumption that takes place in a production 
process whose sole output is energy products and the consumption carried out for 
the production of certain energy products where it is inevitable that other kinds of 
(residual) products will be obtained. 
It must also be resolved whether, as a consequence of the foregoing, it is 
necessary to change and depart from the case-law of the Supreme Court according 
to which that self-consumption is considered to fall within the scope of the 
chargeable event and to be subject to taxation (inter alia, judgment of the Supreme 
Court of [17] September 2010, appeal No [4355]/2005). 
III.— As this is a case of interpreting and applying a provision of EU law whose 
meaning is uncertain for the above reasons, and as it remains likely that that 
interpretation and application will be raised in a large number of cases, the 
Supreme Court considers it warranted to refer a question for a preliminary ruling, 
in the terms set out in the [OR. 14] operative part, in order for the Court of Justice 
of the European Union to establish the interpretation of the new Directive 2003/96 
in relation to the matter at issue. 
THE COURT ORDERS: 
First.— The proceedings are stayed pending a decision on the question referred 
for a preliminary ruling. 
REQUEST FOR A PRELIMINARY RULING OF 27.6.2018 — CASE C-44/19 
 
10  
Second.— The following question is referred to the Court of Justice of the 
European Union for a preliminary ruling: 
‘Must Article 21(3) of Directive 2003/96 be interpreted as meaning that it 
permits the self-consumption of energy products within the curtilage of the 
producer to be made subject to the excise duty on mineral oils in the 
proportion in which non-energy products are obtained? 
Or, on the contrary, does the purpose of that provision, which is to exclude 
from taxation the use of energy products that is deemed necessary for 
obtaining final energy products, preclude the taxation of that 
self-consumption in so far as it results in the production of other non-energy 
products, even when such production is residual and occurs inevitably as a 
result of the production process itself?’ 
[…] [OR. 15] […] [Signatures]