Opinion of the Advocate General — ECLI:EU:C:2022:543
Date: 2022-07-07
Language of the case: Polish
Subject matter: Taxation
Procedure: Action for failure to fulfil obligations - unfounded
Origin: Poland

OPINION OF ADVOCATE GENERAL COLLINS delivered on 7 July 2022(1) Case C‑166/21 European Commission v Republic of Poland (Failure of a Member State to fulfil obligations – Excise duties on ethyl alcohol and alcoholic drinks – Directive 92/83/EEC – Exemption from harmonised duty – Article 27(1)(d) – Alcohol used for the production of medicines – Article 27(6) – Condition requiring movement of a product under a duty suspension arrangement – Proportionality – Burden of proof) I. Introduction 1. By Article 27(1)(d) of Directive 92/83/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on alcohol and alcoholic beverages, (2) ethyl alcohol used for the production of medicines is exempt from excise duty. 2. In order to apply that exemption in a straightforward manner and to prevent any evasion, avoidance or abuse, the Republic of Poland subjects that exemption to the requirement that the aforementioned product is moved under a duty suspension arrangement. (3) 3. The European Commission considers that requirement to be incompatible with Article 27(1)(d) of Directive 92/83 and to infringe the principle of proportionality since it is the exclusive means whereby that exemption can be obtained. It accordingly commenced proceedings against the Republic of Poland under Article 258 TFEU seeking a declaration that that Member State had failed to fulfil its obligations. II. Legal context A. European Union law 4. The nineteenth, twentieth, twenty-second and twenty-third recitals of Directive 92/83 state: ‘Whereas it is necessary to lay down at Community level the exemptions which apply to goods which are transported between Member States; Whereas, however, it is possible to permit Member States an option to apply exemptions tied to end-uses within their territory; … Whereas Member States should not be deprived of the means of combating any [evasion], avoidance or abuse which may arise in the field of exemptions; Whereas Member States should be permitted to give effect to the exemptions required by this Directive by way of refund’. 5. Article 19(1) of Directive 92/83 provides that Member States shall apply an excise duty to ethyl alcohol (4) in accordance with that directive. 6. Section VII of Directive 92/83, headed ‘Exemptions’, provides in Article 27(1)(d) and (6) that: ‘1. Member States shall exempt the products covered by this Directive 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: … (d) when used for the production of medicines defined by Directive 65/65/EEC; … 6. Member States shall be free to give effect to the exemptions mentioned above by means of a refund of excise duty paid.’ B. Polish law 7. According to Article 30(9)(4) of the Ustawa o podatku akcyzowym (Law on excise duty) of 6 December 2008 (Dz. U. of 2009, No 254, item 11), in its consolidated version (Dz. U. of 2019, item 864) (‘the Law on Excise Duty’), ‘exemption from excise duty is granted to ethyl alcohol … contained in medicinal products within the meaning of the … [prawo farmaceutyczne (Law on Pharmaceutical Regulation)] of 6 September 2001 …’. 8. So far as appears to be relevant for the purposes of the present Opinion, Article 32 of the Law on Excise Duty provides that: ‘1. The following excise goods shall be exempt from excise duty on account of their intended purpose: … 3. The exemption from excise duty provided for in paragraph (1) shall apply to the goods concerned only in the following cases: (1) delivery to the user from a tax warehouse on the national territory; or … (4) intra-Community acquisition by a registered consignee, unless that consignee has an authorisation for the one-off acquisition of excise goods as a registered consignee, for use by that consignee as a user; or … (8) use by the tax warehouse operator as a user; or … 4. The following are also exempt from excise duty on account of their intended purpose: … (3) alcoholic beverages used: … (b) for the manufacture of the medicinal products referred to in Article 30(9)(4), … – only in the cases referred to in paragraph 3(1), (4) or (8), if the conditions set out in paragraphs 5 to 6(b), 12 and 13 are satisfied … 5. Exemption from excise duty on account of the intended purpose of excise goods also depends on the following conditions: (1) the excise goods covered by the exemption are included in the excise guarantee or, in the case of imports, in a guarantee lodged in accordance with the guarantee on customs duties under the customs regulations by the operator of the tax warehouse, the intermediary or the registered consignee (unless the latter has an authorisation for the one-off acquisition of excise goods as a registered consignee), up to the amount of the tax debt arising from the use of the goods in question not corresponding to the excise duty exempt purpose or from the failure to comply with the conditions for exemption, until the receipt of the excise goods has been confirmed either by the user or by the intermediary; this condition shall not apply in the situations referred to in paragraph 3(4) or (8); (2) the excise goods circulate under an e-DD [electronic consignment note] or a document replacing the e-DD, and their circulation is terminated in the manner referred to in Article 46b(2) and within the period referred to in Article 46b(3); …’ 9. By Article 40(1) of the Law on Excise Duty: ‘The duty suspension arrangement applies in the following situations: (1) the excise goods: (a) are in a tax warehouse, including after having been returned to it by the intermediary or user, (b) circulate between tax warehouses located on the national territory, (c) circulate, for the purpose of export, between a tax warehouse on the national territory and a customs post on the national territory which supervises their actual exit from the territory of the European Union, (d) circulate between the tax warehouse on the national territory and the taxable person benefiting from the exemption from excise duty pursuant to Article 31(1); …’ III. Pre-litigation procedure and form of order sought 10. In a letter of formal notice sent to the Republic of Poland on 8 December 2016, the Commission alleged that certain provisions of the Law on Excise Duty were in breach of Article 27(1)(d) of Directive 92/83 and infringed the principle of proportionality. In its response of 7 February 2017, the Republic of Poland explained why it disagreed with the Commission’s position. 11. On 7 June 2019, the Commission sent a reasoned opinion to the Republic of Poland in which it reiterated the position set out in the letter of formal notice. The letter invited that Member State to take the necessary measures to bring its national law into conformity with that opinion. In a letter to the Commission dated 31 July 2019, the Republic of Poland maintained its position. IV. Procedure before the Court 12. The Commission lodged the present action on 30 October 2020. It seeks a declaration that the Republic of Poland has failed to fulfil its obligations under EU law, together with an order for costs. In its defence, the Republic of Poland seeks an order to dismiss the proceedings as unfounded and an order for the Commission to bear the costs of the proceedings. 13. On 22 July 2021, the Czech Republic was granted leave to intervene in support of the form of order sought by the Republic of Poland. The parties presented oral argument and replied to questions of the Court at a hearing on 4 May 2022. V. The parties’ arguments A. The Commission 14. The Commission’s starting point is that the objective of the exemptions established by Article 27(1) of Directive 92/83 is to neutralise the impact of excise duties on ethyl alcohol when it is used as an intermediate element in the manufacturing of other products. The application of those exemptions by Member States thus depends upon the end use of the product in question. (5) 15. The Commission concedes that Article 27(1) of Directive 92/83, read in conjunction with the twenty-second recital thereof, expressly provides that Member States may lay down conditions for the purpose of ensuring the correct and straightforward application of the exemptions created by that provision and of preventing any evasion, avoidance or abuse. However, it emphasises that, according to the Court’s case-law, the exemption of products covered by Article 27(1) of Directive 92/83 is the rule and the refusal to exempt is the exception. The exercise of the power that that provision grants to Member States cannot detract from the unconditional nature of the obligation to grant exemption. (6) 16. It follows that, when exercising the power conferred by Article 27(1) of Directive 92/83, Member States must put forward concrete, objective and verifiable evidence of a serious risk of evasion, avoidance or abuse, and the conditions laid down cannot go beyond what is necessary to attain the objectives described in that provision. (7) Consequently, Member States cannot make the application of the exemption under Article 27(1)(d) of that directive conditional on compliance with conditions that are not proven, by concrete, objective and verifiable evidence, to be necessary to ensure the correct and straightforward application of that exemption and to prevent any evasion, avoidance or abuse. 17. Polish law requires that, in order to obtain the exemption under Article 27(1)(d) of Directive 92/83, the product in question must be moved under a duty suspension arrangement. According to the Commission, that condition deprives traders which use ethyl alcohol in the production of medicines of the benefit of what is an unconditional exemption when they do not move that product under a duty suspension arrangement. The Republic of Poland has not shown, by concrete, objective and verifiable evidence, that the requirement to have recourse to a duty suspension arrangement is necessary to ensure the correct and straightforward application of the exemption and to prevent any evasion, avoidance or abuse. 18. The Commission further asserts that the duty suspension arrangement breaches the principle of proportionality because evasion, avoidance or abuse may be prevented in a manner that does not oblige traders to incur the added cost of moving a product under that arrangement. Where the product circulates after excise duty has been paid, as under a refund system, there is no longer any risk of fraud. Such risk of fraud as may exist can be avoided by requiring traders to provide documents and certificates to demonstrate the use to which the product was put. 19. In its reply, the Commission accepts that the duty suspension arrangement applied by the Republic of Poland itself fulfils the requirements of Article 27(1)(d) of Directive 92/83. Nevertheless, in order to rectify the failure to comply with its obligations, the Republic of Poland is required to introduce a parallel system whereby traders, which cannot obtain an exemption from excise duty under that provision because the product in question was not moved under a duty suspension arrangement, can obtain the benefit of that exemption by way of a refund of excise duty paid. B. The Republic of Poland and the Czech Republic 20. The Republic of Poland, supported by the Czech Republic, agrees with the Commission that Article 27(1)(d) of Directive 92/83 provides for an unconditional exemption from excise duty. The Republic of Poland nonetheless submits that, under that directive, it is for the Member States to lay down conditions to prevent any evasion, avoidance or abuse. Article 27(6) of that directive expressly provides that Member States shall be free to give effect to the exemption by means of a refund system. That provision clearly does not require a Member State to introduce a system for the refund of excise duty paid. 21. The Republic of Poland states that the system it operates is based on the EU system of the movement of excise goods under duty suspension arrangements, the rationale for which includes the prevention of fraud. (8) The movement of products is effected as between tax warehouses operated by authorised persons which are required to comply with numerous obligations and to demonstrate a high degree of professionalism and caution. (9) The tax authorities monitor the movement of goods within the system using electronic documentation, which facilitates intervention where there is a concrete risk of fraud. The requirement that ethyl alcohol used for the production of medicines is moved under a duty suspension arrangement in order to benefit from the exemption from excise duty thus in no way excludes traders from obtaining the benefit of that exemption. It is also clear from the evidence provided to the Court that the system operated in Poland virtually eliminates the risk of evasion, avoidance and abuse. In the specific context of the exemption for ethyl alcohol used in the production of medicines, the Republic of Poland provided data from its Minister for Finance to show that 165 customs and fiscal checks were carried out in 2019, 545 in 2020 and 194 in 2021. Irregularities were reported in two cases. Given the serious risk of fraud with respect to ethyl alcohol exempt from excise duty, the requirement to move ethyl alcohol used for the production of medicines under a duty suspension arrangement respects the requirements of Directive 92/83 and the principle of proportionality. 22. In response to the Commission’s argument that a duty suspension arrangement imposes higher costs on traders, the Republic of Poland explains that, under such an arrangement, excise duty is never paid. In contrast, the requirement to pay that excise duty upfront, inherent in a duty refund system, is capable of creating onerous cash-flow implications for traders. The Republic of Poland thus considers that the duty suspension arrangement is administratively advantageous, applies the exemption correctly and does so in a manner that prevents any evasion, avoidance or abuse. 23. The Czech Republic adds that the requirement to move products under a duty suspension arrangement is fundamentally different from the conditions that the Court has held to be incompatible with EU law due to the absence of a link with the objective of preventing fraud. The Czech Republic criticises the Commission for condemning as disproportionate the conditions the Republic of Poland imposes on the sole ground that the latter does not provide for a refund system. The Commission has adduced no evidence that the system it favours is less burdensome for traders than the duty suspension arrangement. 24. According to the Republic of Poland, the Commission’s demand that it introduce a refund system in parallel with the duty suspension arrangement it operates would deprive it of the freedom, expressly provided for by Directive 92/83, to lay down the conditions for the application of the exemptions listed in Article 27 thereof. It further considers that it is not required to afford traders a choice of mechanisms by which they may obtain the benefit of the exemption contained in Article 27(1)(d) of Directive 92/83. Indeed, the operation of such a parallel system would itself compromise the prevention of fraud. VI. Legal assessment A. Breach of Article 27(1)(d) of Directive 92/83 1. Article 27(1)(d) 25. The text of Article 27(1) of Directive 92/83 is clear. It requires Member States (‘shall’) to exempt the products covered by Directive 92/83 from harmonised excise duty. Member States fulfil that obligation by adopting (‘shall lay down’) conditions for two purposes: to ensure the correct and straightforward application of the exemptions and to prevent any evasion, avoidance or abuse. The twenty-second recital of Directive 92/83, which states that Member States should not be deprived of the means of combating any evasion, avoidance or abuse that may arise in the field of exemptions, is to the same effect. Article 27(1) of that directive thereafter contains a list of specific exemptions, including point (d), with respect to ethyl alcohol used for the production of medicines. 26. Directive 92/83 thus imposes on Member States a primary obligation, which the case-law describes as unconditional, (10) to grant the exemptions listed thereunder and a secondary obligation to adopt conditions to give effect to that primary obligation. The unconditional nature of the exemption thus coexists with, and therefore does not emasculate, the secondary obligation on Member States to adopt such conditions. 27. The Court’s case-law appears to indicate that, when Member States exercise the power to adopt conditions to give effect to the primary obligation under Article 27(1) of Directive 92/83, they must put forward concrete, objective and verifiable evidence of a serious risk of evasion, avoidance or abuse. Such conditions cannot go beyond what is necessary to attain that objective.(11) 28. For two reasons, I query whether the requirement whereby Member States must, in the particular circumstances of this case, put forward concrete, objective and verifiable evidence of a serious risk of evasion, avoidance or abuse in order to adopt conditions under Article 27(1) of Directive 92/83 goes beyond those of that provision. 29. First, there is no trace of that requirement in the text of Article 27(1) of Directive 92/83, which refers to Member States preventing any evasion, avoidance or abuse, thus indicating that the Member States are invested with a degree of discretion as to the form and content of the conditions to adopt. 30. Second, in support of the proposition stated in paragraph 51 of the Court’s judgment in Repertoire Culinaire (12) as described in point 26 of the present Opinion, the Court cited an earlier judgment, that of Italy v Commission, (13) which was an action for the annulment of Decision 98/617/EC. (14) Under Article 27(5) of Directive 92/83, a Member State may refuse to grant exemption or withdraw relief already granted where it finds that a product that has been exempted under Article 27(1)(a) or (b) thereof gives rise to evasion, avoidance or abuse. The Member State advises the Commission, which transmits that communication to the other Member States. A final decision is then made under the procedure laid down in Article 24 of Directive 92/12/EEC. (15) In that case, Italy had sought to introduce an obligation to use pure alcohol for the manufacture of perfumes and cosmetics, but the Commission decided that nothing in Directive 92/83 required products exempt under Article 27(1)(b) thereof to be derived from pure alcohol; nor did the use of impure alcohol to produce goods falling within the exemption under that provision constitute evasion, avoidance or abuse. The exemption Italy sought thus fell outside of the scope of the conditions that Article 27(1) of that directive permitted Member States to impose. 31. The judgment in Italy v Commission (16)was thus delivered in circumstances where Italy had sought the benefit of a Commission decision to justify a refusal to grant an exemption in respect of certain products. The Court held that the onus was on Italy to persuade the Commission of the merits of its application. (17) However, the Commission has provided no explanation as to why that allocation of the burden of proof can be transposed to the very different circumstances in which a Member State exercises a power lawfully conferred on it. In the light of the principle of sincere cooperation, (18) it may be argued that when the Commission seeks to challenge an apparently valid exercise of such a power, it ought to, at the very least, bear the onus of demonstrating the existence of a prima facie case to that effect. (19) 32. However, in this case, the Commission accepts that the operation of a duty suspension arrangement by the Republic of Poland complies with the requirements of Article 27(1)(d) of Directive 92/83. In such circumstances, it is unclear why the Republic of Poland is required to put forward concrete, objective and verifiable evidence of a serious risk of evasion, avoidance or abuse to justify recourse to that arrangement, all the more so in the context of proceedings in which the Commission bears the burden of proof. (20) 33. Moreover, the Court judgments to which the Commission refers in its pleadings do not support the proposition that, by requiring a product to be moved under a duty suspension arrangement, the Republic of Poland exceeds the limits of the power that Article 27(1)(d) of Directive 92/83 confers on it. 34. In the judgment in Repertoire Culinaire, (21) the conditions of the national legislation under scrutiny consisted in a restriction on the persons authorised to recover excise duty, a four-month period within which to submit a claim and a requirement that the refund consist of a minimum sum of money. In the absence of concrete, objective and verifiable evidence as to whether those conditions were necessary to ensure the correct and straightforward application of the exemption under Article 27(1)(f) of Directive 92/83 and to prevent any evasion, avoidance or abuse, the Court considered that those conditions fell outside of the scope of the power that Article 27(1) of Directive 92/83 conferred on the Member States. (22) 35. Following the same reasoning as in the judgment in Repertoire Culinaire, (23) in Asprod (24) the Court held that a national rule, whereby exemption was refused on the ground that the trader had not obtained a decision from the tax authorities setting an authorised maximum limit for the use of alcoholic beverages in the production of confectionary products, fell outside of the scope of the power that Article 27(1) of Directive 92/83 conferred on the Member States. (25) 36. Article 14(1) of Council Directive 2003/96/EC (26) is expressed in very similar terms to those in Article 27(1) of Directive 92/83. (27) In the judgment in Polihim-SS, (28) the Court held that a refusal by national authorities to exempt heavy fuel oils from excise duty on the sole ground that the person declared by the authorised warehousekeeper as their consignee did not have the status of an end-user authorised under national law to receive energy products exempt from excise duty, without checking whether the basic requirements for those heavy fuel oils to be used for a purpose that gave rise to an entitlement to exemption were met at the time of their removal from the tax warehouse, went beyond what is necessary to ensure the correct and straightforward application of the exemptions and to prevent any evasion, avoidance or abuse. 37. Finally, in the judgment in Vakarų Baltijos laivų statykla , (29)where the Court again interpreted Article 14(1) of Directive 2003/96, it was held that national legislation, which renders the application of an exemption conditional on compliance with formal requirements unrelated to the use of the energy products concerned or to the substantive requirements of that provision, calls into question the unconditional nature of the obligation to exempt and infringes the principle of proportionality. 38. In each of those judgments, the Court indicated that the Member State in question had exceeded the bounds of its power to adopt conditions to exempt goods from excise duty since the conditions they purported to impose did not ensure the correct and straightforward application of the exemptions or prevent any evasion, avoidance or abuse, thereby interfering with the unqualified nature of the relevant exemption. As the Republic of Poland and the Czech Republic pointed out at the hearing, it is not part of the Commission’s case in the present proceedings that the Polish authorities withhold the exemption on the ground that certain conditions are not met and without checking whether the substantive requirements for obtaining the exemption are satisfied. On the contrary, the Commission does not contest that the duty suspension arrangement operated by the Republic of Poland ensures the correct application of the exemption. 2. Article 27(6) of Directive 92/83 39. Article 27(6) of Directive 92/83 provides that the Member States may (‘shall be free to’) give effect to the exemptions listed in Article 27(1) thereof by means of a refund of excise duty paid. The twenty-third recital of Directive 92/83 (‘Member States should be permitted to give effect to the exemptions required by this Directive by way of refund’) confirms the express terms of Article 27(6) of that directive. 40. Notwithstanding the clear terms of that provision, the Commission appears to be of the view that the unconditional nature of the exemptions extends to the manner in which Member States make them available. To comply with Article 27(1)(d) of Directive 92/83, the Republic of Poland can give effect to that exemption by means of a duty suspension arrangement, but it must also do so by refunding excise duty paid. The Commission is effectively inviting the Court to read Article 27(6) of that directive as imposing an obligation on Member States to give effect to the exemptions by way of refunds of excise duty paid. 41. To my mind, that proposition runs into two insurmountable hurdles. 42. First, as explained in points 25 and 26 of the present Opinion, Article 27(1)(d) of Directive 92/83 gives the Member States a margin of discretion as to the choice of means whereby they give effect to the exemptions provided for thereunder. The Commission has not demonstrated that the choices made by the Republic of Poland go beyond that provision. 43. Second, Article 27(6) of Directive 92/83 provides that Member States ‘shall be free to give effect to the exemptions mentioned above by means of a refund of excise duty paid’. To date, the Court has not interpreted that provision. Fortunately, that exercise poses no particular difficulty since the literal meaning of the paragraph could not be clearer. The term ‘exemption’ is commonly understood to refer to freedom or release from an obligation or legal requirement. In the context of taxation, its ordinary meaning implies that, to the extent an exemption arises, there is no obligation to pay tax. Article 27(6) of Directive 92/83 provides that effect may be given to the exemptions created by that provision by means of a refund of excise duty paid. The words ‘shall be free’ plainly indicate that it does not impose an obligation on Member States to give effect to an exemption by way of a refund of excise duty paid. (30) 44. The Commission argued at the hearing that the Court’s case-law, notably the judgment in Repertoire Culinaire, (31) has curtailed the scope of the choice of action that Article 27(6) of Directive 92/83 affords to the Member States. The judgment in Repertoire Culinaire did not address the interpretation of Article 27(6) of that directive since the Member State in question had given effect to the exemption under Article 27(1)(f) thereof by means of a refund of excise duty paid. That judgment is thus incapable of supporting the proposition advanced by the Commission. 3. Conclusion 45. I advise the Court that the Commission has not established that the Republic of Poland has failed to fulfil its obligations under Article 27(1)(d) of Directive 92/83. B. Infringement of the principle of proportionality 46. The Commission also asserts that the requirement to have recourse to a duty suspension arrangement in order to obtain an exemption from excise duty for ethyl alcohol used for the production of medicines infringes the principle of proportionality because evasion, avoidance or abuse may be prevented in a manner that does not oblige traders to incur the added cost of moving the product under a duty suspension arrangement. Where the product circulates after excise duty has been paid, as under a refund system, there is no longer any risk of fraud. Such risk of fraud as may exist can be avoided by requiring traders to provide documents and certificates to prove the use of the product. 47. The second part of the Commission’s case is to be assessed in the light of the burden of proof in Article 258 TFEU proceedings. 1. Burden of proof in Article 258 TFEU proceedings 48. The Court has consistently held that proceedings under Article 258 TFEU must be based on an objective finding that a Member State has failed to fulfil its obligations under the TFEU or secondary legislation. (32) 49. It is also settled case-law that the Commission must prove the existence of the alleged infringement and provide the Court with the information necessary to enable it to determine whether that infringement has been made out. In so doing, the Commission may not rely on presumptions. (33) 50. In the present proceedings the Commission must prove that the Republic of Poland has failed to implement Article 27(1)(d) of Directive 92/83 correctly and proportionately by making the exemption from harmonised excise duty for ethyl alcohol used for the production of medicines conditional on the movement of that product under a duty suspension arrangement. 51. Under Article 4(3) TEU, Member States are required to facilitate the achievement of the Commission’s tasks. Pursuant to Article 17(1) TEU, those tasks consist, inter alia, in ensuring that the provisions of the TFEU and the measures taken by the institutions pursuant thereto are applied. (34) Member States are thus obliged to supply clear and precise information to the Commission, indicating unequivocally the laws, regulations and administrative provisions by means of which it considers that it has satisfied the various requirements that a directive imposes on it. (35) Moreover, where an issue arises as to whether national implementing provisions are applied correctly in practice, the Commission is largely reliant on the information provided by any complainants and by the Member State concerned. 52. In the present case, nothing in the written pleadings or in the file before the Court indicates that the Republic of Poland has failed in its duty to cooperate with the Commission or that it has not provided clear and precise information about the relevant national legislation or its application in practice. 2. Assessment 53. The application of the principle of proportionality involves the Court considering whether the measures under scrutiny exceed the limits of what is appropriate and necessary in order to attain the objectives legitimately pursued thereby; when there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued. (36) 54. The Commission does not contest that the requirement for the product in question to circulate under a duty suspension arrangement has the benefits contended by the Republic of Poland. 55. The Commission nevertheless considers that implementing measures put in place by the Republic of Poland constitute a disproportionate response, which that Member State must remedy by introducing a parallel system of exemption by way of refunds of duty paid. 56. First, the Commission implies that, because the excise duty is paid upfront, such refund systems give rise to a lower risk of evasion, avoidance and abuse. Thereafter it is the responsibility of national authorities to ensure that refunds of excise duty are not paid in respect of alcohol that is not used for the production of medicines. 57. Second, the Commission is of the view that the duty suspension arrangement prevents some traders from obtaining the benefit of the exemption because it imposes higher costs on users than a refund system, therefore going beyond what is necessary to prevent any evasion, avoidance or abuse. 58. The Republic of Poland disagrees: all traders may obtain the exemption by moving the product under a duty suspension arrangement. That is not necessarily more costly than a refund system; it also has the advantage of not requiring the payment of excise duty upfront. 59. The Commission has provided no evidence to the Court in support of its contention that duty suspension arrangements are more onerous than a refund system. Questioned on that point at the hearing, the Commission asserted that it was not obliged to provide such evidence. In its submissions, the Czech Republic pointed out that the Commission’s case is based upon a presumption, which it cannot rely upon in proceedings under Article 258 TFEU. (37) 60. The Commission bears the overall burden of proof in proceedings under Article 258 TFEU. That burden does not shift to the Member State because the Commission takes the view, unsupported by any evidence, that an alternative mechanism for achieving the goal pursued by a directive is more effective and/or less restrictive than the one the defendant Member State operates. 61. Moreover, it is difficult to see how a Member State can be expected to demonstrate that a system that it has not implemented is less restrictive than one that it has implemented. If the Commission wishes to advance a plea of that type in proceedings under Article 258 TFEU, it must provide material in support of that assertion to the defendant Member State in order for it to be able to take a position on it and thereafter lay that material before the Court. That has not happened in the present case. 62. I therefore advise the Court that the Commission has not shown to the requisite legal standard that the Republic of Poland has infringed the principle of proportionality. Accordingly, I propose that the Court dismiss the Commission’s application in its entirety. VII. Costs 63. Under Article 138(1) of the Rules of Procedure of the Court of Justice, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since I advise that the Court grant the form of order sought by the Republic of Poland, the Commission should be ordered to pay the costs. 64. In accordance with Article 140(1) of those rules, the Czech Republic must bear its own costs. VIII. Conclusion 65. In view of the above considerations, I propose that the Court: (1) Dismiss the action. (2) Order the European Commission to bear the costs incurred by the Republic of Poland. (3) Order the Czech Republic to bear its own costs. 1 Original language: English. 2 OJ 1992 L 316, p. 21. 3 Chapter IV of Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC (OJ 2009 L 9, p. 12) provides for the movement of excise goods under suspension of excise duty. 4 As defined in Article 20 of Directive 92/83. 5 Judgment of 9 December 2010, Repertoire Culinaire (C‑163/09, EU:C:2010:752, paragraphs 48 and 49) (‘the judgment in Repertoire Culinaire’). 6 Ibid., paragraphs 50 and 51 and the case-law cited. 7 Ibid., paragraph 52. 8 See, for example, the Commission’s press release IP/08/241, ‘Excise duties: Commission proposes measures to strengthen the fight against fraud and simplify certain rules for private and commercial cross-border purchases’, 14 February 2008. 9 The authorised warehousekeeper is liable for all risks inherent in the movement of products subject to excise duty under such an arrangement and is designated as liable for the payment of excise duties in cases where an irregularity or offence has been committed involving the chargeability of such duties in the course of the movement of those products (judgment of 2 June 2016, Kapnoviomichania Karelia (C‑81/15, EU:C:2016:398, paragraph 32)). 10 Judgment of 9 December 2010 (C‑163/09, EU:C:2010:752, paragraph 51 and the case-law cited). 11 Ibid., paragraph 52. 12 Ibid. 13 Judgment of 7 December 2000 (C‑482/98, EU:C:2000:672). 14 Commission Decision of 21 October 1998 denying authority to Italy to refuse the grant of exemption to certain products exempt from excise duty under [Directive 92/83] (OJ 1998 L 295, p. 43). 15 Council Directive 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). 16 Judgment of 7 December 2000 (C‑482/98, EU:C:2000:672). 17 Hence the finding in paragraph 52 of that judgment that, at the very least, Italy was required to adduce concrete evidence of a serious risk of evasion, avoidance or abuse. 18 Article 4(3) TEU. See, by analogy, Opinion of Advocate General Sharpston in Spain v Commission (C‑114/17 P, EU:C:2018:309, point 79 and the case-law cited). 19 Which is the case in proceedings under Article 258 TFEU, as described in points 48 to 51 of the present Opinion. 20 See points 48 and 51 of the present Opinion. 21 Judgment of 9 December 2010 (C‑163/09, EU:C:2010:752). 22 Judgment of 9 December 2010 (C‑163/09, EU:C:2010:752, paragraphs 53 to 55). 23 Ibid. 24 Order of 3 December 2014 (C‑313/14, not published, EU:C:2014:2426). 25 Order of 3 December 2014, Asprod (C‑313/14, not published, EU:C:2014:2426, paragraphs 22 to 27). 26 Council Directive of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity (OJ 2003 L 283, p. 51). 27 ‘Member States shall exempt the following from taxation 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’. 28 Judgment of 2 June 2016 (C‑355/14, EU:C:2016:403, paragraph 62). 29 Judgment of 13 July 2017 (C‑151/16, EU:C:2017:537, paragraph 51). 30 Other language versions of Article 27(6) and of the twenty-second recital of Directive 92/83, such as the German, French, Italian and Dutch language versions, also reflect this position. 31 Judgment of 9 December 2010 (C‑163/09, EU:C:2010:752, paragraph 51). 32 See, inter alia, judgment of 10 November 2020, Commission v Italy (Limit values – PM10) (C‑644/18, EU:C:2020:895, paragraph 70 and the case-law cited). 33 See, inter alia, judgments of 5 September 2019, Commission v Italy (Bacterium Xylella fastidiosa) (C‑443/18, EU:C:2019:676, paragraphs 78 and 80 and the case-law cited), and of 14 January 2021, Commission v Italy (Contribution towards the purchase of motor fuel) (C‑63/19, EU:C:2021:18, paragraph 74 and the case-law cited). 34 See, inter alia, judgment of 18 October 2012, Commission v United Kingdom (C‑301/10, EU:C:2012:633, paragraph 71 and the case-law cited). 35 Judgment of 16 June 2005, Commission v Italy (C‑456/03, EU:C:2005:388, paragraph 27 and the case-law cited). 36 Judgment of 9 March 2010, ERG and Others (C‑379/08 and C‑380/08, EU:C:2010:127, paragraph 86 and the case-law cited). 37 See point 49 of the present Opinion.