Judgment;Summary — ECLI:EU:C:2023:667
Date: 2023-09-14
Language of the case: Bulgarian
Court formation: Fourth Chamber
Subject matter: Taxation;Principles, objectives and tasks of the Treaties;Approximation of laws
Procedure: Reference for a preliminary ruling;Reference for a preliminary ruling - inadmissible
Origin: Bulgaria

Translation C-820/21 – 1 
Case C-820/21 
Request for a preliminary ruling 
Date lodged: 
28 December 2021  
Referring court: 
Administrativen sad Sofia-grad (Bulgaria) 
Date of the decision to refer: 
9 December 2021  
Applicant: 
Vinal AD 
Defendant: 
Direktor na Agentsia ‘Mitnitsi’ 
  
O R D E R 
[…] THE ADMINISTRATIVEN SAD SOFIA-GRAD (Administrative Court, 
Sofia City), First Division 64 
[…] having examined case No 2001 […] […] and considered the following in 
order to reach its decision: 
The proceedings in the present case were instituted by an action brought by Vinal 
AD […] against decision No Р-142/32-45441/11.2.2020 of the Direktor na 
Agentsia ‘Mitnitsi’ (Director of the Customs Authority) withdrawing authorisation 
No 128 for the operation of a tax warehouse for the production and storage of 
excise goods, specifying No BGNCA00046000 as the identification number of the 
authorised warehousekeeper, BGNCA00046001 as the identification number of 
the tax warehouse, and Lovech […] as the address of the warehouse. 
By an application submitted at the hearing of 23 February 2021, Vinal AD sought 
that a request for a preliminary ruling be made as regards the interpretation of 
Article 7(2) of Directive 2008/118/EC concerning the general arrangements for 
excise duty and as regards an interpretation, in keeping with Article 16(1) of 
Directive 2008/118/EC, of Article 53(3) of the Zakon za aktsizite i danachnite 
EN 
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skladove (Law on excise duties and tax warehouses; ‘the ZADS’), read in 
conjunction with Article 53(2)(1) thereof, read in conjunction with 
Article 53(1)(3), Article 47(1)(5) and Article 112 thereof. 
The applicant submits that the resolution of the dispute in the present case requires 
an interpretation of Community law, in particular Article 7(2) of Directive 
2008/118/EC concerning the general arrangements for excise duty and 
Article 16(1) and Articles 16(2)(b) and 16(2)(e) of the directive, and [clarification 
as to] whether Article 53(3) of the ZADS, read in conjunction with 
Article 53(2)(1) thereof, read in conjunction with Article 53(1)(3), 
Article 47(1)(5) and Article 112 thereof, are compatible with those provisions of 
the directive. 
The defendant, the Director of the Customs Authority, contests the application. 
That director submits that a request for interpretation is not necessary and states 
that Article 7 and Article 16 of the directive are clear and unambiguous; there is 
no conflict with the national provisions. According to Article 15(1) of Directive 
2008/118/ЕC, each Member State is to determine its rules concerning the 
production, processing and holding of excise goods, with a view also to 
preventing any possible evasion or abuse. Detailed rules have been adopted in 
exercise of that power. 
The chamber of the Administrativen Sad Sofia-grad (Administrative Court, Sofia 
City) seised of the present case considers that the request for a preliminary ruling 
is well-founded in part. It therefore takes the view that it must refer the matter to 
the Court of Justice of the European Union for a preliminary ruling on the 
interpretation of the provisions of EU law relevant to the dispute. 
Some of the issues raised by the applicant (paragraphs 6-9) cannot be the subject 
of the present proceedings, since the proceedings in which the decision imposing 
an administrative penalty was challenged and the procedure in which the tax 
assessment notice establishing the excise duty owed by the applicant was issued 
have already been concluded. 
At the same time, however, the referring court takes the view that the other 
questions should be referred and considers that they must be reformulated. They 
are questions concerning whether the conditions for obtaining and, respectively, 
for withdrawing authorisation are indefinite; whether they must comply with the 
main objectives of the directive, in particular the objective concerning guarantees 
as regards the levying and collection of excise duty; and the principle of non-
discrimination. 
The referring court sets out the content of the request for a preliminary ruling as 
follows: 
How is Article 16(1) of Directive 2008/118/ЕC to be interpreted in so far as it 
provides that authorisation to open and operate a tax warehouse is subject to 
conditions that the authorities are entitled to lay down for the purpose of 
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3 
preventing any possible evasion or abuse; what content must those conditions 
have in order to achieve the objectives of preventing evasion or abuse? 
How is the principle of non-discrimination for the purposes of recital 10 of 
Directive 2008/118/ЕC to be interpreted? 
How are those provisions to be interpreted, and are they to be interpreted as 
precluding national legislation, such as that in Article 53(1)(3) of the ZADS, in 
conjunction with Article 47(1)(5) thereof, in so far as the latter provisions provide 
for the unconditional withdrawal of authorisation for the future, which takes place 
indefinitely and without any restriction as to time, in addition to a penalty already 
imposed for the same act? 
I. Parties to the proceedings 
1. Applicant: Vinal AD […], having its registered office and administrative 
address in Sofia […] 
2. Defendant: Direktor na Agentsia ‘Mitnitsi’ (Director of the Customs 
Authority) 
II. Subject matter of the main proceedings: 
The proceedings were instituted by an action brought by Vinal AD […] against 
decision No Р-142/32-45441/11.2.2020 of the Director of the Customs Authority 
withdrawing authorisation No 128 for the operation of a tax warehouse for the 
production and storage of excise goods, specifying No BGNCA00046000 as the 
identification number of the authorised warehousekeeper, BGNCA00046001 as 
the identification number of the tax warehouse, and Lovech […] as the address of 
the warehouse. 
Ш. Facts and arguments of the parties in the main proceedings: 
Vinal AD was an authorised warehousekeeper within the meaning of Article 4(2) 
of the ZADS: a person who, in accordance with the provisions of the ZADS, is 
authorised to produce and/or store, receive and dispatch excise goods under a duty 
suspension arrangement in a tax warehouse. 
Under the authorisation issued, the activities permitted in the tax warehouse were 
as follows: the fermentation, coupage and ageing of wines from grapes and fruits, 
the distillation of grape must, wine and fruit puree, the production, ageing and 
coupage of rakia from grapes and fruits, the production of vodka and gin, the 
production of distillates and intermediates from wine and fruits, the production of 
brandies, vermouth and liqueurs, the preparation of mixtures of flavourings and 
fruit and herbal extracts for the production of aromatised wines: white, red and 
rosé wines. 
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By decision No Р-142/32-45441/11.2.2020 of the Director of the Customs 
Authority, authorisation No 128 for the operation of a tax warehouse for the 
production and storage of excise goods, specifying No BGNCA00046000 as the 
identification number of the authorised warehousekeeper, BGNCA00046001 as 
the identification number of the tax warehouse, and Lovech […] as the address of 
the warehouse, was withdrawn on the ground that a final judgment, 
No 37/16.1.2020, had been given by the Administrative sad Pleven 
(Administrative Court, Pleven). 
Judgment No 37/16.1.2020 of the Administrative Court, Pleven confirmed the 
decision imposing an administrative penalty No 318/24.1.2018 of the Head of the 
Mitnitsa Svishtov (Svishtov Customs Office), by which a financial penalty of 
BGN 248 978 had been imposed on Vinal AD. That judicial decision is final and 
has the force of res judicata. 
It was established that Vinal AD had been subjected to a tax assessment by Order 
No BG005800-PK24-P1/18.04.2017 of the Head of the Mitnitsa Stolichna (Sofia 
Customs Office). In that procedure, an inspection of the physical stocks of excise 
goods in the tax warehouse of VINAL AD was carried out, in the period from 3 to 
10 May 2017. The results of the inspections carried out were recorded in 
inspection report Nos 492/03.05.2017, 503/04.05.2017, 510/05.05.2017, 
516/09.05.2017 and 523/10.05.2017. The quantities of the liquids contained in 
those goods, the alcohol content in each case and the actual temperature were 
measured. The alcohol content at a temperature of 20°С was determined. 
Tax assessment report No BG005800-RK24-RD/8 was issued on 24 November 
2017. Tax assessment notice No BG005800-RK24-RA8 was issued on 
22 December 2017; it was not challenged and became final on 5 January 2018. 
Tax assessment notice No BG 005800RK-24 RA/8 established excise duty debts 
of BGN 4 261.89 for the period from 1 January 2012 to 3 May 2017. The 
inspection as a result of which the shortages were identified, in respect of which a 
decision establishing an administrative offence and the decision imposing an 
administrative penalty at issue were issued, concerns a subsequent period, namely 
the period from 3 to 10 May 2017. That is to say, the tax assessment procedure 
carried out was the basis for carrying out the inspection which identified the 
shortages recorded in the abovementioned reports. 
A decision establishing an administrative offence No 88/26.07.2017 was issued in 
respect of Vinal AD for failure to comply with the obligations arising from 
Article 43(1)(1) of the ZADS, read in conjunction with Article 84(7) and 
Article 20(2)(8) thereof, namely for failure to comply with the obligation to levy 
the excise duty due by issuing an excise invoice as at 30 June 2017. It was 
established that, as at the time at which the decision was issued, the authorised 
warehousekeeper had not discharged the obligation under Article 84(1)(1) of the 
ZADS to issue excise invoices in compliance with the requirement under 
Article 43(1)(1) of the ZADS. 
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On 24 January 2018, the penalising customs authority issued decision imposing an 
administrative penalty No 318/2017. In that decision, it (i) adopted the facts 
established in the decision establishing an administrative offence 
No 88/26.07.2017; (ii) decided, on the basis of the evidence obtained from the 
inspection carried out, that Vinal AD, in its capacity as authorised 
warehousekeeper, had failed to discharge the obligations under Article 43(1)(1) of 
the ZADS, read in conjunction with Article 84(7) and Article 20(2)(8) thereof, 
namely: to levy the excise duty due by issuing an excise invoice as at 30 June 
2017; and (iii) deemed this to be an administrative offence under Article 112(1) of 
the ZADS. It imposed an administrative penalty on the company in the form of a 
‘financial penalty’ in the minimum amount provided for that offence, that is to 
say, twice the amount of the excise duty not levied, in this case BGN 248 978. 
Decision No P-142/32-45441/11.2.2020 issued by the Director of the Customs 
Authority (and contested in the main proceedings) withdrew the authorisation of 
the warehousekeeper Vinal AD, thereby precluding it from operating a tax 
warehouse. 
The latter brought an action against the decision of the Director of the Customs 
Authority before the referring court, seeking its annulment. In its action, it submits 
that the ‘incorrect’ transposition of Directive 2008/118/EC must be taken into 
account in the assessment as to whether the ZADS is compatible [with EU law], 
since the State and the administration have interfered with the activities of 
authorised warehousekeepers to an inordinately excessive extent. According to 
Vinal AD, Commission Recommendation of 29 November 2000 setting out 
guidelines for the authorisation of warehousekeepers under Council Directive 
92/12/EEC, which was repealed by Directive 2008/118/EC, must be taken into 
account. Article 7 of the recommendation states that an authorisation may be 
suspended, or in specific cases, withdrawn: in the event of non-fulfilment of the 
obligations inherent in the authorisation; in the event of insufficient cover for the 
requisite guarantee; in the event of repeated non-compliance with the legal 
provisions in force; in the event of involvement in criminal activities; in the event 
of tax evasion or fraud. 
The defendant, the Director of the Customs Authority, contests the action. That 
director has not submitted any specific arguments in relation to the foregoing 
statements of the applicant. 
IV. EU law 
COUNCIL DIRECTIVE 2008/118/EC of 16 December 2008 concerning the 
general arrangements for excise duty and repealing Directive 92/12/EEC. 
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V. Law of the Republic of Bulgaria 
Zakon za aktsizite i danachnite skladove (Law on excise duties and tax 
warehouses, Bulgaria; ‘the ZADS’): 
Article 4. For the purposes of this Law: 
2. (amended: Darzhaven vestnik [State Gazette; ‘DV’] No 92 of 2015, in force 
since 1 January 2016) An ‘authorised warehousekeeper’ means a person 
authorised, in accordance with the provisions of this Law, to produce and/or store, 
receive or dispatch excise goods under a duty suspension arrangement. 
3. A ‘tax warehouse’ means a place where excise goods are produced, stored, 
received and dispatched under a duty suspension arrangement by an authorised 
warehousekeeper in accordance with the provisions of this Law. 
4. A ‘duty suspension arrangement’ means a body of rules applied to the 
production, storage or movement of goods, where the excise duty is suspended. 
17. An offence is ‘repeated’ where it is committed within one year after the 
decision imposing an administrative penalty by which the person has been 
penalised for a similar offence has become final. 
18. (amended: DV No 63 of 2006, in force since 4 August 2006) An offence is 
‘serious’ where it is the subject of a final decision imposing an administrative 
penalty of a financial penalty of more than BGN 15 000. 
Article 20. (1) Excise duty shall become payable at the time when the excise 
goods are released for consumption. 
(2) Release for consumption shall be any of the following: 
……… 
8. (supplemented: DV No 105 of 2006, in force since 1 January 2007, 
amended: DV No 54 of 2012, in force since 17 July 2012, amended: DV No 92 of 
2015, in force since 1 January 2016) the establishment of a shortage of goods for 
which excise duty is due ………; 
Article 43. (1) (amended: DV No 105 of 2006, in force since 1 January 2007) 
Except in the cases referred to in Article 42, excise duty shall be levied by: 
1. (amended: DV No 109 of 2007, in force since 1 January 2008, amended: DV 
No 95 of 2009, in force since 1 April 2010, amended: DV No 54 of 2012, in force 
since 17 July 2012, amended: DV No 92 of 2015, in force since 1 January 2016) 
the authorised warehousekeeper, the persons referred to in Article 3(1)(4) and (6) 
and the persons registered in accordance with Article 57, Article 57b(4), 
Article 57c and Article 58c, on the date on which the excise duty becomes due – 
by issuing an excise invoice in accordance with Article 84(1); 
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Article 47. (1) (in the version of Article 47 of DV No 105 of 2006, in force from 
1 January 2007) Authorised warehousekeepers may be persons who: 
………. 
4. (amended: DV No 54 of 2012 in force since 17 July 2012, amended: DV 
No 101 of 2013, in force since 1 January 2014, supplemented: DV No 97 of 2016, 
in force since 1 January 2017) have no public-law debts with customs authorities, 
tax debts or debts arising from compulsory insurance contributions, with the 
exception of debts arising from decisions that have not become final and 
staggered, deferred or secured debts; 
5. (amended: DV No 63 of 2006, in force since 4 August 2006, supplemented: 
DV No 95 of 2009, in force since 1 December 2009) have not committed a serious 
or repeated offence within the meaning of this Law, except for cases where the 
administrative penalty proceedings were terminated by the conclusion of a 
settlement; 
Article 53. (1) The authorisation to operate a tax warehouse shall cease to be 
valid: 
……. 
3. where the authorisation is withdrawn; 
……. 
(2) The authorisation to operate a tax warehouse shall be withdrawn where: 
1. the authorised tax warehousekeeper no longer meets the conditions of 
Article 47 …… 
……. 
(3) (amended: DV No 30 of 2006, in force since 12 July 2006, amended: DV 
No 95 of 2009, in force since 1 December 2009, supplemented: DV No 98 of 
2018, in force since 1 January 2019) The authorisation shall be withdrawn by 
decision of the Director of the Agentsia ‘Mitnitsi’ [(Customs Authority)], which 
shall be provisionally enforceable as of the date of issuance of the decision, unless 
the court orders otherwise. 
(4) (new: DV No 95 of 2009, in force since 1 December 2009) The decision 
pursuant to paragraph 3 shall be subject to appeal in accordance with the 
provisions of Administrativnoprotsesualen kodeks (Code of Administrative 
Procedure; ‘the APK’). 
Article 84(7). (amended: DV No 92 of 2015, in force since 1 January 2015, 
amended: DV No 98 of 2018, in force since 1 January 2019) An excise invoice 
shall be issued on the date on which: 
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1. the excise goods are released for consumption in accordance with 
Article 20(2), for each consignee and for each means of transport, except in the 
cases referred to in Article 20(2)(5) and (15) to (18); 
2. in the cases referred to in Article 64(18), the absence of excise stamps is 
established; 
……………………… 
Article 112. (1) A person who is liable to levy excise duty but fails to levy it shall 
be fined twice the amount of the excise duty which was not levied; the fine may 
not be less than 500 leva (BGN). 
……….. 
Zakon za administrativnite narushenia i nakazania (Law on administrative 
offences and penalties; ‘the ZANN’) 
Article 83. (1) (supplemented: DV No 15 of 1998, amended: DV No 69 of 2006) 
In the cases provided for in the relevant law, by decree, by decision of the Council 
of Ministers or by ordinance of the Municipal Council, a financial penalty may be 
imposed on legal persons or sole traders for failure to discharge their obligations 
towards the State or the municipality in the exercise of their activities. 
(2) The penalty referred to in the preceding paragraph shall be imposed in 
accordance with this Law, unless the relevant normative act provides otherwise. 
VI. Grounds for the request for a preliminary ruling: 
The provision of the second sentence of Article 16(1) of Directive 2008/118 ЕC 
provides that the authorisation for the opening and operation of a tax warehouse 
by the authorised warehousekeeper is to be subject to conditions that the 
authorities are entitled to lay down for the purpose of preventing any possible 
evasion or abuse. 
The referring court takes the view that an interpretation of the scope of that 
provision is necessary, in particular as to what is to be understood by ‘possible 
evasion or abuse’. 
In the present case, Article 53(3) of the ZADS, read in conjunction with 
Article 53(2)(1) thereof, read in conjunction with Article 53(1)(3) and 
Article 47(1)(5) thereof, provides for the withdrawal of the authorisation where 
there is a final act by which the person has already been penalised for not having 
levied the excise duty despite the obligation incumbent upon him or her, the 
penalty being double the amount of the excise duty that has not been levied.  
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In that case, the question arises as to how and in what way the objectives of 
preventing any possible evasion or abuse could be achieved by the unconditional 
and indefinite withdrawal of the authorisation. 
Is it possible, in the present case, that those objectives might have already been 
achieved by the penalty provided for and already imposed in the amount of double 
the amount of the excise duty not levied? Can the withdrawal of authorisation 
under national law be said to constitute a disproportionate measure in the light of 
the objectives of the second sentence of Article 16(1) and the fact that it is not 
possible to apply for the reinstatement of authorisation in future, for instance 
where certain conditions, laid down for the purposes of meeting those objectives, 
are fulfilled? 
In that respect, account must also be taken of the fact that the withdrawal of the 
authorisation is always and unconditionally provided for as a legal consequence of 
a decision imposing an administrative penalty that has become final, without there 
being any legal possibility to conduct a specific assessment, in each individual 
case, as to whether the objectives of Article 16(1) of Directive 2008/118/EC 
would thereby be achieved, and, after such assessment, to proceed with the 
withdrawal of the authorisation, where appropriate. 
Against that, the abovementioned Commission Recommendation of 29 November 
2000 setting out guidelines for the authorisation of warehousekeepers under 
Council Directive 92/12/EEC, repealed by Directive 2008/118/EC, provides, in 
Article 7, that an authorisation may be suspended, or in specific cases, withdrawn: 
in the event of non-fulfilment of the obligations inherent in the authorisation; in 
the event of insufficient cover for the requisite guarantee; in the event of repeated 
non-compliance with the legal provisions in force; in the event of involvement in 
criminal activities; in the event of tax evasion or fraud. 
In the present case, could the legal consequence of withdrawal of authorisation 
linked to a specific offence exceeding a certain amount of excise duty that has not 
been levied fall within the abovementioned criteria of the recommendation? Can 
that legal consequence be covered by the objectives of Article 16(1) of Directive 
2008/118/EC, namely the prevention of any possible evasion or abuse? 
Recital 10 of Directive 2008/118/EC states the following: arrangements for the 
collection and reimbursement of duty have an impact on the proper functioning of 
the internal market and should therefore follow non-discriminatory criteria. In that 
sense, is the provision of Article 53(1)(3) of the ZADS, read in conjunction with 
Article 47(1)(5) thereof, consistent with the principles of non-discrimination 
provided for in recital 10 and the abovementioned principles set out in the recitals 
of the directive in so far as national law provides for the withdrawal of 
authorisation for the future, indefinitely and without any restriction as to time, in 
addition to a penalty already imposed for the same act? Does that provision 
provide for consequences of such severity that they would lead precisely to 
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discrimination against the Bulgarian company in relation to other companies 
under otherwise identical conditions? 
For those reasons, and on the basis of subparagraph (b) of the first paragraph of 
Article 267 of the Treaty on the Functioning of the European Union, read in 
conjunction with Article 628 of the Grazhdanski protsesualen kodeks (Code of 
Civil Procedure; ‘the GPK’) and Article 144 of the APK, and in accordance with 
Article 631 of the GPK, read in conjunction with Article 144 of the APK, the 
Administrative Court, Sofia City makes the following 
ORDER: 
The following questions are referred to the Court of Justice of the European 
Union for a preliminary ruling: 
How is Article 16(1) of Directive 2008/118/ЕC to be interpreted in so far as it 
provides that authorisation to open and operate a tax warehouse is subject to 
conditions that the authorities are entitled to lay down for the purpose of 
preventing any possible evasion or abuse; what content must those conditions 
have in order to achieve the objectives of preventing evasion or abuse? 
How is the principle of non-discrimination for the purposes of recital 10 of 
Directive 2008/118/ЕC to be interpreted? 
How are those provisions to be interpreted, and are they to be interpreted as 
precluding national legislation, such as that in Article 53(1)(3) of the ZADS, in 
conjunction with Article 47(1)(5) thereof, in so far as the latter provisions provide 
for the unconditional withdrawal of authorisation for the future, which takes place 
indefinitely and without any restriction as to time, in addition to a penalty already 
imposed for the same act? 
[…]