Judgment;Summary — ECLI:EU:C:2024:335
Date: 2024-04-18
Language of the case: Czech
Court formation: Seventh Chamber
Subject matter: Energy;Taxation
Procedure: Reference for a preliminary ruling
Origin: Czechia

Summary C-133/23 – 1 
Case C-133/23 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice  
Date lodged: 
6 March 2023 
Referring court:  
Nejvyšší správní soud (Czech Republic) 
Date of the decision to refer:  
27 February 2023 
Applicant: 
Omya CZ s.r.o. 
Defendant:  
Generální ředitelství cel 
  
Background to the main proceedings  
Proceedings concerning the issuance of a permit to acquire tax-exempt electricity 
for use for mineralogical processes. 
Factual and legal context of the request for a preliminary ruling 
Interpretation of Article 2(4)(b), fifth indent of Council Directive 2003/96/EC of 
27 October 2003 restructuring the Community framework for the taxation of 
energy products and electricity. Article 267 TFEU. 
The question referred 
Should indent five of Article 2(4) of Council Directive 2003/96 be interpreted to 
the effect that electricity used to power machines used in the processing of 
quarried limestone, in the form of multi-stage grinding and crushing down to 
specific grain size, both in the quarry where the quarrying takes place, and in 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-133/23 
 
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nearby processing facilities, constitutes electricity used for mineralogical 
processes? 
Applicable European legislation  
Council Directive 2003/96: Recitals 2-7, 11, 12, and 22; Article 1; Article 2(1) 
and (2); Article 2(4)(b), fifth indent. 
Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 
20 December 2006 establishing the statistical classification of economic activities 
NACE Revision 2 and amending Council Regulation (EEC) No 3037/90 as well 
as certain EC Regulations on specific statistical domains, as amended. 
Commission Regulation (EU) No 1209/2014 of 29 October 2014 amending 
Regulation (EC) No 451/2008 of the European Parliament and of the Council 
establishing a new statistical classification of products by activity (CPA) and 
repealing Council Regulation (EEC) No 3696/93. 
Applicable national legislation  
Zákon č. 261/2007 Sb., o stabilizaci veřejných rozpočtů (Law 261/2007 on the 
Stabilisation of Public Finances): part forty-seven, Paragraph 2(1)(e) and (g), 
Paragraph 8(2)(f): 
Pursuant to Paragraph 8(2)(f), electricity intended for use or used for 
mineralogical processes is exempt from tax. 
Pursuant to Paragraph 2(1)(g), mineralogical processes are procedures specified in 
the NACE classification under code C 23 ‘Manufacture of other non-metallic 
mineral products’. 
Pursuant to Paragraph 2(1)(e), the NACE classification is the classification of 
economic activities specified in Regulation No 1893/2006, as amended. 
Explanatory Notes to NACE 1  
Section ‘C – Manufacturing’: 
 
1 The referring court notes that the national version of the NACE system is the CZ-NACE 
classification drawn up pursuant to Article 4 of Regulation No 1893/2006, which was published 
in sdělení č. 244/2007 Sb (Communication No 244/2007). The Explanatory Notes to the CZ-
NACE classification issued by the Czech Statistical Office constitute the national version of the 
Explanatory Notes to NACE, the preparation, update, and publication is ensured by the 
Commission in cooperation with Member States pursuant to Article 5 of Regulation 
No 1893/2006. Furthermore, the referring court observes that the parts of the national and EU 
NACE classifications and Explanatory Notes quoted herein are identical and that the national 
version constitutes a ‘mere’ translation of EU materials. 
OMYA CZ 
 
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This section includes the physical or chemical transformation of materials or 
components into new products, although this cannot be used as the single 
universal criterion for defining manufacturing (see remark on processing of waste 
below). The materials, substances, or components transformed are raw materials 
that are products of agriculture, forestry, fishing and aquaculture, mining, 
quarrying, quarrying of stone and sands and clays, or may also be products of 
other manufacturing activities. Substantial alteration, renovation, or reconstruction 
of products is generally considered to be manufacturing. The output of a 
manufacturing process may be finished in the sense that it is ready for utilisation 
or consumption, or it may be semi-finished in the sense that it is to become an 
input for further manufacturing. […] Remark: The boundaries of manufacturing 
and other sectors of the classification system can be somewhat blurry. As a 
general rule, the activities in the manufacturing section involve the transformation 
of materials into new products. Their output is a new product. However, the 
definition of what constitutes a new product can be somewhat subjective. […] 
Conversely, there are activities that, although sometimes involving transformation 
processes, are classified in other sections of NACE; in other words, they are not 
classified as manufacturing. They include: […] beneficiating of ores and other 
minerals classified in section B (Mining and quarrying); […]. 
Section C – division ‘23 Manufacture of other non-metallic mineral products’: 
This division includes manufacturing activities related to a single substance of 
mineral origin. This division includes the manufacture of glass and glass products 
(e.g., flat glass, hollow glass, fibres, technical glassware etc.), ceramic products, 
tiles and baked clay products, and cement and plaster, from raw materials to 
finished article. The manufacture of shaped and finished stone and other mineral 
products is also included in this division. 
Section 23 – division ‘23.7 Cutting, shaping and finishing of stone’, class ‘23.70 
Cutting, shaping and finishing of stone’: 
This class includes 
- cutting, shaping, and finishing of stone for use in construction, in 
cemeteries, on roads, as roofing etc. 
- manufacture of stone furniture. 
This class excludes 
- activities carried out by operators of quarries, e.g., production of rough 
cut stone, see 08.11 
- production of millstones, abrasive stones, and similar products, see 
23.9 
Section ‘B – Mining and quarrying’: 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-133/23 
 
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Mining and quarrying includes the extraction of minerals occurring naturally as 
solids (coal and ores), liquids (petroleum) or gases (natural gas). Extraction can be 
achieved by different methods such as underground or surface mining, well 
operation, seabed mining etc. This section includes supplementary activities […], 
for example, crushing, grinding, cleaning, drying, sorting, concentrating ores, 
liquefaction of natural gas and agglomeration of solid fuels. These operations are 
often accomplished by the units that extracted the resource and/or others located 
nearby. […] [D]ivisions 07, 08 concern metal ores, various minerals and quarry 
products. 
This section excludes: 
- processing of the extracted materials, see Section C (Manufacturing) 
[…] 
- crushing, grinding, or otherwise treating certain earths, rocks and 
minerals not carried on in conjunction with mining and quarrying, see 23.9. 
Section B – division ‘08 Other mining and quarrying’: 
This division includes extraction from a mine or quarry, but also dredging of 
alluvial deposits, rock crushing and the use of salt marshes. The products are used 
most notably in construction (e.g., sands, stones, etc.), manufacture of materials 
(e.g., clay, gypsum, calcium, etc.), manufacture of chemicals etc. This division 
does not include processing (except crushing, grinding, cutting, cleaning, drying, 
sorting, and mixing) of the minerals extracted. 
Division 08 – group ‘08.1 Quarrying of stone, sand and clay’, class ‘08.11 
Quarrying of ornamental and building stone, limestone, gypsum, chalk, and slate’: 
This class includes 
- quarrying, rough trimming and sawing of monumental and building 
stone, such as marble, granite, sandstone etc. 
- breaking and crushing of ornamental and building stone 
- quarrying, crushing, and breaking of limestone. 
This class excludes: 
- cutting, shaping, and finishing of stone outside quarries, see 23.70. 
Facts of the case and original proceedings 
1 The applicant is a Czech business corporation engaged in the extraction and 
processing of limestone (marble) in a stone quarry. There, the opening, 
OMYA CZ 
 
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preparation, and extraction of a deposit composed exclusively of limestone takes 
place. In the quarry, the applicant is engaged in the (primary) crushing of the 
quarried limestone, and its sorting. Then the material is carried by lorries to the 
applicant’s nearby (in the order of several kilometres) processing facility. There, 
further processing of the limestone takes place. That processing consists of 
primary washing, separation into fine and coarse fractions, and subsequent drying. 
Then, the limestone is crushed or processed by dry grinding. The result is 
limestone grit or, more precisely, fine and coarse limestone fillers or fine 
limestone fillers with a treated surface. In the case of fine limestone fillers with a 
treated surface, the technology of an electric heating device that warms hot air is 
employed. In that device, the fine limestone filler is mixed thoroughly with 
stearin. These processes can be summarised such that the applicant performs, in 
the quarry and subsequently in the above-mentioned processing facilities, 
processing of the quarried limestone in the form of multi-stage drilling and 
crushing, down to grain of a specific size. 
2 On 11 July 2019, the applicant delivered to the Celní úřad pro Olomoucký kraj 
(Customs Authority for the Olomouc Region) (‘the Customs Authority’) an 
application for a permit for the acquisition of tax-exempt electricity for use, 
pursuant to Paragraph 8(2)(f), part forty-seven of Law 261/2007, for mineralogical 
processes as defined in Paragraph 2(1)(e) and (g) of the same part of the law cited, 
which it specifically identified as primary crushing and sorting carried out at a 
quarry and processing facilities. 
3 The Customs Authority rejected the applicant’s application on the ground that 
those activities do not fall in Section C, division 23, under the NACE 
classification, 2 but rather, under Section B, division 08, class 08.11, 3 which 
includes, inter alia, breaking and crushing of ornamental and building stone and 
the quarrying, crushing, and breaking of limestone. Crushing, grinding, cutting, 
cleaning, drying, sorting, and mixing of stone are types of stone processing falling 
under Section B. 
4 The applicant appealed the decision of the Customs Authority. The Generální 
ředitelství cel (General Customs Directorate) (‘the appellate authority’) dismissed 
the appeal, upholding the decision of the Customs Authority. The appellate 
authority stressed that the applicant’s case is a borderline case, but still, its 
activities fall under Section B, which includes, in addition to extraction, also 
supplementary activities, such as crushing, grinding, cleaning, drying, sorting, and 
concentration of ores, etc., at mining facilities at the place of extraction. It does 
not, however, include the processing of extracted materials and crushing, grinding, 
or other treatment of the quarried stone not performed in relation to extraction. 
Division 08 of Section B pertains to quarrying in a quarry and includes inter alia 
 
2 Section ‘C – Manufacturing’, division ‘23 Manufacture of other non-metallic mineral products’. 
3 Section ‘B – Mining and quarrying’, Division ‘08 Other mining and quarrying’, class ‘08.11 
‘Quarrying of ornamental and building stone, limestone, gypsum, chalk, and slate’. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-133/23 
 
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the crushing of stone, but not the processing of the minerals quarried (except 
crushing, grinding, cutting, cleaning, drying, sorting, and mixing), whereas 
Section C includes transformation of materials or components into new products. 
There are activities that occasionally include transformation processes and yet are 
not included in this section, e.g., treatment of ores and other minerals classified 
under Section B. On that basis, the appellate authority concluded that if the 
grinding or crushing of stone is a supplementary activity to quarrying (e.g., for 
sorting, quality improvement, to facilitate transport), it falls under Section B, and 
if it does not constitute a supplementary activity and it is a part of the production 
process of another finished product (e.g., cement, gypsum), it falls under Section 
C. According to the appellate authority, the applicant does not engage in the 
production of a new product, as its activity is related to extraction and no 
fundamental transformation of the extracted raw material takes place. 
5 The applicant challenged the decision of the appellate authority by an application 
lodged with the Krajský soud v Ostravě – pobočka v Olomouci (Regional Court, 
Ostrava – Olomouc branch) (‘the Regional Court’) which annulled the contested 
decision of the appellate authority and referred the case back for further 
proceedings. 
6 The Regional Court deemed the applicant’s activity to constitute a mineralogical 
process. According to it, the activity consisting of the ‘manufacture of marble 
fillers and chips’ falls under Section C, division 23, class ‘23.70 Cutting, shaping, 
and finishing of stone’, and hence, a tax exemption on electricity is linked to the 
activity pursuant to Law 261/2007. The Regional Court based that conclusion on 
an interpretation of the Explanatory Notes to NACE.  
7 The Regional Court observed that, according to the NACE methodological 
guideline, the top-down method was to be used in the classification, according to 
which the classification of a unit on the lowest classification level must 
correspond to the unit’s classification on higher levels, meaning that the position 
of a unit on the highest classification level is determined first, and continues down 
through the structure. In this regard, the Regional Court found it important that, 
according to the Explanatory Notes to NACE, Section B includes the extraction of 
minerals but also supplementary activities, such as crushing, grinding, cleaning, 
drying, or sorting, performed in quarrying facilities themselves or in facilities 
located near the place of quarrying. Excluded from the section are activities 
consisting of the processing of the extracted materials and crushing, grinding or 
otherwise treating certain earths, rocks, and minerals not carried on in conjunction 
with mining and quarrying (which falls under class ‘23.9 Manufacturing, 
Manufacture of abrasive products and non-metallic mineral products n.e.c.’). 
8 According to the Regional Court, the applicant’s activity is not a mere 
supplementary activity performed in a direct connection with extraction, to permit, 
for example, easier handling of the extracted stone. On the contrary, the result of 
its activity are products which can be classified in Section C, according to the 
Explanatory Notes to NACE. This corresponds to the statistical production 
OMYA CZ 
 
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classification (CPA) based on Regulation 1209/2014, which, unlike NACE, is not 
concerned with economic activities, but, rather, their result. The NACE and CPA 
classifications are related, which is evident from their structure and from the 
Explanatory Notes to NACE. The product of the applicant’s activity are marble 
powder (fillers) and marble chips (crushed marble), which in the CPA 
classification are classified in Section ‘C – Manufactured products [and services]’, 
Division ‘23 Other non-metallic mineral products[, including related services and 
works]’, class 23.70, as a product of an activity specified under sub-category 
‘23.70.11 Marble, travertine, alabaster, worked, and articles thereof (except setts, 
curbstones, flagstones, tiles, cubes and similar articles); artificially coloured 
granules, chippings and powder of marble, travertine …’. 
9 The appellate authority appealed the judgment of the Regional Court on a point of 
law, seeking to have the judgment set aside and have it referred back to the 
Regional Court for further proceedings. 
10 The appellate authority holds that Regional Court incorrectly defined the 
boundary between, on the one hand, mining and quarrying of stone (Section B of 
NACE classification) and, on the other hand, its processing (Section C). It 
reiterated its view that, in order for activities such as crushing and grinding to be 
included in Section C, they would have to be related to the production of a new 
finished product (e.g., cement, lime), not to extraction, as is the case of the 
applicant. 
11 According to the appellate authority, the Regional Court applied the top-down rule 
incorrectly. Crushing, grinding, cleaning, and drying of stone are essentially 
always supplementary activities and never appear in the NACE classification as 
entirely separate activities. Hence, it must be considered to what this 
supplementary activity is linked, and to determine its classification on that basis. 
The CPA classification, albeit related to the NACE classification, cannot change 
that interpretation. It must be taken into account that these classifications were not 
primarily created for the purpose of specifying activities exempt from a tax on 
electricity. Consequently, classification of products pursuant to these 
classifications cannot be taken as absolute, as the only classification to which Law 
261/2007 refers directly is the NACE classification. 
12 Furthermore, according to the appellate authority, electricity in the applicant’s 
case is not directly part of a mineralogical process, but, rather, it is merely 
electricity used to power equipment used in the mechanical treatment of 
limestone, without its further transformation or processing. Hence, the activity 
performed by the applicant should not result in a tax relief on the electricity used 
by it. This is compliant with EU legislation as well as EU case-law, from which 
follows a restrictive approach to assessing tax exemptions. Hence, in the case of 
doubt, a restrictive view should be applied to the possibility of acquiring tax-
exempt electricity. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-133/23 
 
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Summary of the grounds for the order for reference  
13 The referring court states that, following Article 2(4)(b) of Directive 2003/96, 
Paragraph 8(2)(f) part forty-seven of Law 261/2007 regulates the acquisition of 
tax-exempt electricity, in connection with its designation for use or use for 
‘mineralogical processes’. A definition of mineralogical processes in 
Paragraph 2(1)(e) and (g) of this part of the Law is linked to the EU regulation, 
and consequently the term corresponds to the term ‘mineralogical process’ under 
EU law. 
14 In view of the specific circumstances of the case, it is necessary to determine 
whether the fifth indent of Article 2(4) of Directive 2003/96 should be interpreted 
as meaning that the electricity used (by the applicant) for operating the machines 
used in the processing of quarried limestone, in the form of multi-stage grinding 
and crushing down to a specific grain size (both within the quarry where it is 
extracted and in nearby processing facilities) is electricity used for mineralogical 
processes. 
15 These considerations must take into account the fact that the term ‘mineralogical 
processes’ is not autonomous from the point of view of Directive 2003/96, but, 
rather, is linked to the NACE classification pursuant to Directive 1893/2006. In 
order for a process to qualify as a mineralogical process for the purpose of 
Directive 2003/96, it must be capable of being subsumed under Section C of the 
NACE classification, namely its division 23, keeping in mind that the Explanatory 
Notes to NACE play an important role in the interpretation of the NACE 
classification. In that context, the appellate authority concluded that the applicant 
did not use electricity for mineralogical processes, even though it itself admitted 
that it was a borderline case – an assessment with which the referring court agrees. 
16 As concerns the (non)classification of the applicant’s activity described above in 
Section B, it is important to consider, according to the referring court, to what 
extent this is a ‘supplementary activity’ related to extraction itself, or ‘treatment’ 
of the extracted material the outcome of which is subsequently used ‘most notably 
in construction (e.g., sands, stones, etc.), manufacture of materials (e.g., clay, 
gypsum, calcium, etc.), manufacture of chemicals’ One of the questions that arises 
is thus whether the term ‘supplementary activities’ should be interpreted in the 
general context of NACE classification narrowly or broadly. In a narrower sense, 
it could constitute activities related to the handling of material chiefly for internal 
use of the entity performing the extraction, e.g., to ease handling of quarried stone, 
sorting, to facilitate transport or easier sales. In the broader sense, ‘supplementary 
activities’ in the form of the activities performed by the applicant could be 
interpreted such that they are activities ‘secondary’ to the ‘primary’ mining and 
extraction, in which no new products are created, as the product of the mining and 
extraction is only adapted for further commercial use. It could also be considered 
to what extent the entity concerned engages, for example, in the crushing and 
OMYA CZ 
 
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grinding of the extracted material in a direct connection with its extraction, 
whether at the quarry directly, or in its immediate vicinity. 4 
17 In connection to the previous point, a question raised by the applicant during the 
proceedings arises: whether the interpretation of the term ‘mineralogical 
processes’ would be affected if activities identical to those performed by the 
applicant were to be performed by an entity which does not extract the material, or 
if the processing of the material took place in a more remote facility, which is not 
operationally linked to the ‘extraction facility’. If the same activities performed by 
a person other than the one who extracted the material were to be exempt from tax 
on electricity, the question arises whether it is justifiable for the same activity of 
the applicant not to be exempt. 
18 Another question is to what extent the interpretation of the term ‘mineralogical 
processes’ will be influenced by the CPA statistical classification pursuant to 
Regulation No 1209/2014. In this regard, the applicant declares that the products 
of its activity are marble powder (fillers) and marble chippings (crushed marble). 
In the CPA classification, these products are included in Section C. 5 If the CPA 
classification were to influence the interpretation of the NACE classification in 
this regard, another question that arises in this context is whether the outcome of 
the activity described above can be defined as ‘marble chippings and powder’. 
19 The Court of Justice has thus not directly considered the interpretation of the term 
‘mineralogical processes’. The decision of the Court of Justice that is closest in 
subject matter to the issue at hand is its judgment of 7 September 2017, C-465/15, 
Hüttenwerke Krupp Mannesmann, ECLI:EU:C:2017:640, which was, however, 
concerned with the interpretation of another term (chemical reduction), and the 
subject of the decision was not an issue of NACE classification, which is of the 
essence in the present case. 
20 A question of interpretation of EU law has arisen in the present case, on the 
assessment of which depends the referring court’s decision about the present 
appeal on a point of law. As a court against whose decision no appeal is 
permissible, the referring court has an obligation, under Article 267, third sub-
paragraph of the TFEU, to approach the Court of Justice with a request for a 
preliminary ruling. To the extent to which the interpretation of the provisions of 
Directive 2003/96 concerned is of relevance to the case at hand, it cannot be 
inferred that the case is acte éclairé, i.e., a question that can be fully interpreted 
from existing case-law of the Court of Justice. The referring court has not found 
that this essential question could be interpreted on the basis of general rules of 
interpretation, from which the questions outlined would appear so unambiguous 
that they could be considered acte clair. 
 
4  See Explanatory Notes to NACE – Section B. 
5  See paragraph 8 above.