61982C0216
OPINION OF ADVOCATE GENERAL SIR GORDON SLYNN
DELIVERED ON 22 JUNE 1983
My Lords,
The Finanzgericht at Hamburg in the Federal Republic of Germany has referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty the following questions:
“1.
Where under the first clause of Article 4 (6) of Commission Regulation (EEC) No 3195/75 of 2 December 1975, the Commission addresses to the Member States a decision that the conditions imposed by Article 3 (1) (b) of Council Regulation (EEC) No 1798/75 of 10 July 1975 concerning the duty-free importation of a specified instrument or apparatus are not fulfilled, is that decision of direct and individual concern to a person who has imported the instrument or apparatus which is the subject of the decision, with the result that he is entitled to bring an action against the Commission to contest that decision, and, if so, from what moment in time and within what period?
2.
Can a person concerned by a decision adopted by the Commission under the first clause of Article 4 (6) of. Regulation No 3195/75 contest the legality of the decision only by instituting proceedings against the Commission within the two-month period laid down by the third paragraph of Article 173 of the EEC Treaty or can he equally contest the decision's legality before a national court within the context of an appeal against an assessment to customs duty, so that the national court may, where appropriate, submit the question of the decision's validity to the Court of Justice of the European Communities in the form of a request for a preliminary ruling?
3.
If the decision's legality can indeed be contested in proceedings before a national court: is Commission Decision 78/851/EEC of 5 October 1978 concerning the apparatus described as ‘Packard Tri-Carb Liquid Scintillation System, Model 2425’ invalid on the ground that, although apparatus similar to that described in the Commission decision is indeed produced within the Community, the output capacity of - such apparatus is, especially in view of the user's specifications, inferior to the imported apparatus?”
These questions arise from the importation into Germany, in August 1976, of an electronic testing and measuring apparatus manufactured in the USA which is described as a “Packard 2425 Tri-Carb Spectrometer”. Council Regulation No 1798/75 of 10 July 1975 (Official Journal, L 184, 15. 7. 1975, p. 1) provides for the importation, free of Common Customs Tariff duties, of educational, scientific and cultural materials. The present case concerns the situation before the regulation was amended with effect from 1 January 1980 by Council Regulation No 1027/79 of 8 May 1979 (Official Journal, L 134, 31.5. 1979, p. 1).
By Article 3 of Regulation No 1798/75, scientific instruments and apparatus, not included in Article 2, which are imported “exclusively for educational purposes or for pure scientific research” may be imported duty-free provided that “instruments or apparatus of equivalent scientific value are not being manufactured in the Community”. It is common ground that the spectrometer was a scientific apparatus required for a specific research project by the importer, the University of Hamburg.
“Equivalent scientific value”, pursuant to Article 3 (3), “shall be assessed by comparing the characteristics and specifications of the instrument or apparatus for which application is made for the exemption referred to in Article 4 with those of the corresponding instrument or apparatus manufactured in the Community to determine whether the latter could be used for the same scientific purposes as those for which the instrument or apparatus for which the application for exemption is intended and whether its performance would be comparable to that expected of the latter.”
On 2 December 1975 the Commission adopted Regulation No 3195/75 (Official Journal L 316, 6. 12. 1975, p. 17), pursuant to Article 9 of Regulation No 1798/75. Articles 3-6 set out the procedure to apply in the case of scientific instruments or apparatus imported duty-free under Article 3 of Regulation No 1798/75. In order to obtain admission of the goods duty-free, the head of the establishment or organization importing the goods (or his authorized representative) must submit an application to the competent authority of the Member State in which the establishment or organization is situated (Article 3(1)). Article 3(2) lists the information which must be contained in the application. The competent authority is required to give a decision on such application “in all cases where the information at its disposal after any necessary consultation within the trade sources concerned, enables it to assess whether or not there exist instruments or apparatus of equivalent scientific value which are currently manufactured in the Community” (Article 4(1)). If the competent authority is unable to take such a decision, it sends the file to the Commission; while a decision from the Commission is awaited, the competent authority may permit the goods to be imported duty-free on a provisional basis (Article 4 (2)).
When the matter is referred to it, the Commission informs the Member States (Article 4 (3)). If, after two months, no “unfavourable” reply has been sent to the Commission from one of the Member States, the goods are deemed to comply with Article 3 (1) (b) of Regulation No 1798/75, i.e. it is presumed that no goods of equivalent scientific value are produced in the Community. When this occurs, the Commission informs the Member States. (Article 4 (4)). If an “unfavourable” reply has been received, the Commission informs a group of experts representing the Member States who meet “within the framework of the Committee on Duty-Free Arrangements” (set up pursuant to Article 7 of Regulation No 1798/75) to examine the matter (Article 4 (5)). At the hearing the Court was told that this group normally comprises customs and technical experts. When a Member State is represented only by a customs expert, he has always been briefed on the technical aspects of the matter to be discussed. If the examination carried out shows that goods of equivalent scientific value are manufactured in the Community, the Commission adopts a decision declaring that Article 3 (1) (b) of Regulation No 1798/75 has not been fulfilled and notifies the Member States; in the reverse case the Commission declares that it has been fulfilled (Article 4 (6)). If the Commission has come to no decision within six months from the date on which the application has been forwarded to it, the condition is deemed to be fulfilled (Article 4 (7)).
In the present case, the University of Hamburg defined in the customs declaration the research project for which the spectrometer was required as “the measurement of radioactivity in the tissues and body fluids of laboratory animals as part of experimental anatomical research designed to localize and quantify the chemical metabolic processes in mammals”. The university declared the scientific, cultural or educational value of the spectrometer to be: “The monitoring to an accuracy of picomols of metabolic substances in the organism following the administering of radioactively labelled components, by determining and measuring the radioactive decay of the radioactive tracer substance, and the photoelectric impulse multiplication of the radioactive decay phenomena.”
In August 1976 the spectrometer was initially cleared through customs free of duty, although import turnover tax was levied. According to the order for reference, the customs authorities subsequently referred the matter to the Customs Laboratory and Training College at Berlin for an examination of the question whether the spectrometer could be imported free of duty. The Customs Laboratory came to the conclusion that apparatus of equivalent scientific value was manufactured within the Community and the customs authorities therefore issued a notice of corrective assessment on 16 August 1977 (i.e. one year after its initial decision, which was not expressed to be provisional). This notice imposed a retrospective levy of DM 5698.38 in respect of customs duty and DM 626.82 in respect of import turnover tax. At this time there was in existence a Commission decision, addressed to all the Member States, finding that the apparatus in question did not fulfil the conditions for entry duty-free, at least where used for medical research (see Commission Decision 77/382 of 23 May 1977, Official Journal L 143, 10. 6. 1977, p. 25). The university lodged an objection to the notice of assessment on 31 August 1977. On 27 April 1978 the German Government wrote to the Commission, at the behest of the customs authorities, asking it for a decision under Articles 4 and 5 of Regulation No 3195/75 determining whether the conditions for importing the spectrometer duty-free were fulfilled. The use to which the apparatus imported was to be put was described in the letter in the same terms as those used in the customs declaration. The letter goes on to say that entry duty-free had been refused on the basis of Decision No 77/382.
The Commission proceeded to inform the Member States by a circular dated 18 May 1978. By letter dated 17 July the Dutch Government told the Commission that two kinds of apparatus of equivalent scientific value were manufactured in the Community, the Searle Isocap 300 and Philips PW 4540. The group of experts met on 14 September 1978. At the meeting the Dutch delegation said that both Dutch models were of equivalent scientific value to the Packard model and the French delegation revealed that equivalent apparatus were also produced by a firm called Intertechnique. After the meeting the French delegation produced the text of some comments made by Intertechnique on the Packard machine. The Committee on Duty-Free Arrangements decided that the latter was not entitled to importation duty-free, largely because of the apparatus manufactured by Intertechnique.
On 5 October 1978 the Commission adopted Decision No 78/851 (Official Journal, L 293, 19. 10. 1978, p. 30) finding that the conditions for importation duty-free had not been fulfilled. The preamble- states that the question asked by the German Government was whether apparatus of a scientific value equivalent to the Packard 2425 model was currently being manufactured in the Community “having regard to its particular uses based on the measuring of radioactivity in the tissues and liquids of the bodies of laboratory animals in the framework of experimental anatomical research; ... on the basis of information received from Member States, apparatus of scientific value equivalent to the said apparatus capable of use for the same particular purpose is currently manufactured in the Community”.
The customs authorities thereupon dismissed the university's objection as unfounded by a decision dated 7 May 1979. The university commenced proceedings challenging that decision on 11 June. In the proceedings before the Finanzgericht, it was argued that Decision 78/851 was incorrect because the research programme which the university wanted to carry out would not have been feasible if the Dutch or French apparatus were used. The university doubted whether the Commission had given adequate consideration to the nature of the research and criticized its decision for giving only a general description of the possible uses of the apparatus and for not giving a detailed statement of reasons. The customs authorities said that they were bound by the decision and could not review its factual accuracy. The Finanzgericht sought two experts' opinions, both of which concluded that the Commission had been wrong.
The Finanzgericht was troubled as to whether the Commission's decision could be challenged other than under Article 173 of the Treaty, or at least within the time scale laid down by that article, and as to the relationship between actions under Article 173 and references under Article 177 of the Treaty.
The first question referred in effect asks whether an importer of apparatus covered by a negative decision of the Commission under Article 4 (6) of Regulation No 3195/75 can bring proceedings under Article 173 of the Treaty leading to the annulment of that decision. Such a decision must be “notified to”, and in this case was addressed to, all the Member States. The issue is thus whether that decision is “of direct and individual concern” to the importer. In the present case the decision arose specifically from the request of the German authorities dated 27 April 1978 in relation to the apparatus imported by the University of Hamburg. The university is thus in a position not significantly different from the applicant in Case 294/81 Control Data Belgium NVSA v Commission [1983] ECR 911. In my view on the tests adopted by the Court, this decision was both of “direct” and of “individual” concern to the University so that it had the necessary locus standi to bring proceedings within two months from the fifteenth day after publication of the decision in the Official Journal (Article 81(1). of the Court's Rules of. Procedure). It is not necessary in this case to decide whether other importers of identical apparatus would be in the same position.
The next matter is whether such an application under Article 173 is the only recourse available to an importer in the position of the university, or whether he can contest the legality of the Commission's decisions in proceedings challenging the acts of national customs authorities; if so whether he can do so after the time limit for an application under Article 173 is passed. These questions were raised in Case 59/77 De Bloos v Bouyer[l977] ECR 2359, but did not have to be decided by the Court. The relationship between Articles 173 and 177 has been much discussed by writers but the answer to the questions raised, does not seem, to have been spelled out in detail in a judgment of the Court.
As frequently has been said, the origin, the scope and the objectives of the two articles are different. Article 173 requires the Court of Justice to review the legality of certain acts of the Council and the Commission on specified grounds such as lack of competence and infringement of the Treaty. There is a short time limit for the initiation of proceedings and a natural or legal person can only apply to the Court in limited cases. If illegality is established, the Court annuls the act by declaring it void. It goes entirely, even if the effects of the annulment may be limited in time or extent. Under Article 177, leaving aside questions of interpretation, the Court is given jurisdiction to give preliminary rulings on the validity of the acts of the institutions. No time limit is provided; what factors may produce invalidity is not specified; the limitation contained in Article 173 to decisions addressed to a person, or to regulations or other decisions of direct and individual concern to him, is not there. The discretion or duty to refer is that of the national court. The result of the Court of Justice's investigation of the questions referred is not an order of annulment but a preliminary ruling as to “validity”, a word which may have a different ambit from “legality”. The act challenged thus remains in being, even if the Court's ruling that it is invalid is binding on the national courts dealing with the litigation in question, and ought to be followed, if any kind of uniformity in the Community is to be achieved, by other courts and by the institutions.
Thus although the practical results of a decision under the two articles may in some cases be the same, the two procedures and the form of relief are essentially different. Article 177 does not expressly exclude references as to validity where an action for annulment is available, and there is no valid inherent reason for implying such an exclusion. On the contrary, as the Court has recognized, the existence of the Article 177 procedure provides the citizen with a necessary means of redress which would not otherwise be available to him. In principle, it seems to me that a question as to validity may be referred where an action for annulment could be brought, just as it could where a person would not have had the locus standi to proceed under Article 173 (Case 16/65 Schwarze v EVSt G. [1965] ECR 877).
Whether a preliminary question as to validity can be referred when an application for annulment could have been brought, but was not brought in due time, is a different question. The failure to apply in time under Article 173 “entails the loss of the actual right to bring an action” (Case 20/65 Collotti v Court [1965] ECR 847 at p. 850). Thereafter the act cannot be annulled. It does not, however, follow that in proceedings before a national court, where annulment is not the remedy sought, a party cannot challenge the validity of an act of an institution, or an act or procedure of a national authority which flows from a Community act and is dependent on the validity of the latter, after the two months period prescribed by Article 173 has passed. Acts of national authorities implementing Community measures are likely to be adopted after the two-month period provided by Article 173, and it would be taking the need for legal certainty a long way to preclude quite generally a challenge in the national courts to the validity of such acts on the basis that the Community measure was itself invalid and thereby also to preclude a reference under Article 177 once the time for seeking annulment had gone.
The Court has held that an applicant cannot seek to avoid the inadmissibility of a claim under one article of the Treaty by introducing the claim in an action brought under a different article. Thus in a number of cases a claim for damages has been rejected where a claim for annulment would have been inadmissible, or was not brought in time, and where there is a close connection between the claim for annulment and the claim for damages (see e.g. Case 4/67 Müller v Commission [1967] ECR 365; Case 11/72 Giordano v Commission [1973] ECR 417). This kind of case, however, involves two proceedings before the same court, the Court of Justice. In the present situation, however, the challenge to validity is brought in proceedings before the national court which do not involve annulment of an act of a Community institution, a power not vested in the national courts.
Accordingly, it does not seem to me that, even in the absence of a specific provision like that to be found in Article 184 of the Treaty (which may apparently be relied on by a Member State which could have proceeded under Article 173 (Case 32/65 Italy v Council and Commission [1966] ECR 389)) a party who could have applied under Article 173 for annulment and did not do so, is barred from challenging the validity of an act because the time for seeking annulment has gone. If, as I think, such a challenge can be raised before the national court, then it seems to me that a question as to validity can be referred to the Court of Justice under Article 177. The opposite result would, in my view, ignore the essential structure of the Treaty provisions.
Turning to the question of the validity of Decision 78/851, it is clear that under Regulation No 3195/75 the competent national authority has power to decide on applications for duty-free admission. The matter is referred to the Commission for a decision if the national authority is “unable” to take a decision. In the present case the customs authorities referred the matter to the Customs Laboratory, not the Commission. On the basis of the examination carried out by the Customs Laboratory, the customs authorities found themselves able to reject the application and issued a notice of corrective assessment imposing duty one year after it had allowed in the equipment other than on a provisional basis. This was made clear to the Commission in the letter by which the Federal Ministry of Finance referred the matter to it. Article 4 (2) of Regulation No 3195/75 provides, moreover, that when the competent national authority sends the application for duty-free admission to the Commission, it must also send “a short explanation of the reasons why the competent authority has been unable to take a decision as to the granting or refusal of exemption”. So far from it saying this, the letter, in the present case, clearly states that the application was refused. Prima facie therefore, it might seem that the basic condition for referring the matter to the Commission under Article 4 (2), i.e. inability to take a decision under Article 4 (1), was not fulfilled and the Commission was not properly seized of the matter. It is, however, equally arguable that the reference to the Commission may be made at any decision-making level in the competent national authority, whenever the conclusion is reached that a decision cannot be made, and not just at the first level. Since this question has not been referred to the Court by the Finanzgericht, it is not, in my opinion, necessary to deal with it in this case.
The examination made under Article 4(5) of Regulation No 3195/75 is carried out by comparing the characteristics and specifications of the instruments or apparatus in question with the object of determining (i) whether they may be used for the same scientific purposes and (ii) whether their performance is comparable. The characteristics and specifications of the instruments or apparatus in question do not have to be shown to be identical in every respect. The question which the group of experts must ask itself in examining the matter is this: is it possible to predicate, on the basis of the characteristics and specifications of the instruments or apparatus in question, that they can be used for the same scientific purposes and that the performance of the instruments or apparatus manufactured in the Community is comparable to that which can be expected of the imported instrument or apparatus? This question is to be answered, as counsel for the Commission accepted, by reference to the specific use intended for the imported instrument or apparatus as set out in the application for duty-free admission.
The determination is essentially for the experts, and they should not rely simply on the ipse dixit of competing manufacturers. In the present case, it was made clear that the experts did consider the information contained in the application as well as the comparisons produced by the companies manufacturing allegedly comparable equipment, in order to decide both questions, whether the equipment could be used for the same scientific purposes and whether performance was comparable. They were, moreover, entitled to use their own expertise and the technical knowledge available to them in arriving at their determination, as they did in this case.
In the present case the area of dispute essentially centres on the notion of “comparable performance”; what is said is that the research programme which the University wishes to carry out would not be feasible if the alternative apparatus were used, because, as stated in the third question referred, their output capacity is inferior to that of the Packard spectrometer.
“Comparable” performance does not mean “the same in every respect”; it is a relative term which is to be construed in each case by reference to the purpose for which the imported apparatus is intended. For example, the degree of “comparability” required may differ depending on whether the imported apparatus is to be used for pure or applied research and, if the latter, on the application envisaged. The essential factor is whether it is reasonably possible to substitute the apparatus manufactured in the Community for the imported apparatus. In consequence, a difference in performance, or even the fact that the imported apparatus has a superior performance, may not, by itself, be sufficient to establish that the performance is not “comparable” for the purpose of assessing equivalent scientific value.
The Court can declare a decision invalid if it can be shown that the experts have not carried out their task, according to the regulations, if they have considered the wrong questions-or taken account of matters which they, should not have taken into account or failed to have regard to relevant matters, or if they have abused their powers or reached a conclusion which, on the material available, no reasonable body of experts could have reached. Subject to that, the determination in the first place is essentially for the experts.
Although expert opinion contrary to the view reached by the committee of experts has been produced, although the result has been criticized, and although it can be accepted that there are differences of view about the comparability, for the specific purposes of the university, it does not seem to me that it has been established in this case that there was such a manifest error of law or approach, or that there was not material upon which the experts could have concluded, as they did, as to the suitability of the apparatus in question. Accordingly, I do not consider that it has been shown that the decision was invalid.
In the result, for the reasons I have given, it is my opinion that the questions referred by the Finanzgericht should be answered along the following lines:
1.
A person directly and individually concerned by a decision adopted by the Commission under Article 4 (6) of Regulation No 3195/75 can contest its validity before a national court within the context of an appeal against an assessment to customs duty and the national court may, where appropriate, submit the question of the decision's validity to the Court in the form of a request for a preliminary ruling, even if the person concerned has not contested the legality of the decision in proceedings brought in due time under Article 173 of the Treaty.
2.
Examination of the question has not revealed any factor indicating that Commission Decision 78/851 is invalid.