62022CC0096
OPINION OF ADVOCATE GENERAL
PIKAMÄE
delivered on 8 June 2023 (
1
)
Case C‑96/22
Companhia de Distribuição Integral Logísta Portugal, SA
v
Autoridade Tributária e Aduaneira
(Request for a preliminary rulingfrom the Supremo Tribunal Administrativo (Supreme Administrative Court, Portugal))
(Reference for a preliminary ruling – Excise duty – Directive 2008/118/EC – Articles 7 and 9 – Scope – National legislation taxing quantities of cigarettes exceeding the quantitative limit at a rate in force after the date of release for consumption)
1.
In the present case, the Court of Justice has been requested by the Supremo Tribunal Administrativo (Supreme Administrative Court, Portugal) to give a preliminary ruling concerning the interpretation of Article 34 TFEU and Articles 7 and 9 of Directive 2008/118/EC. (
2
)
2.
Since, at the Court’s request, this Opinion is focused on the second question referred for a preliminary ruling, it will concentrate solely on the interpretative analysis of the abovementioned provisions of secondary law.
3.
The relevant legislative context consists of EU rules on general arrangements for excise duty. Excise duty is an indirect tax on consumption that can be used not only for the purposes of fiscal policy – namely to secure revenue for the public treasury – but also for non-fiscal purposes, such as to discourage the consumption of certain products, including tobacco.
4.
In the present case, the question concerns the compliance with Directive 2008/118 of national tax arrangements under which quantities of cigarettes exceeding the quantitative limit for release for consumption provided for therein are subject to excise duty at the rate in force after the date of release for consumption. The arrangements at issue are intended to combat the abusive practice of releasing excessive quantities of goods for consumption in anticipation of a future increase in the rate of excise duty (forestalling).
5.
This case will enable the Court to clarify where the dividing line lies between the substantive scope of the harmonisation introduced by Directive 2008/118 and the discretion that the directive allows the Member States.
Legal framework
European Union law
6.
Articles 7 and 9 of Directive 2008/118 are relevant in the present case.
Portuguese law
7.
Decreto-Lei no 73/2010 que aprova o Código dos Impostos Especiais de Consumo (Decree-Law No 73/2010 approving the Excise Duty Code), of 21 June 2010 (Diário da República, Series I, No 118, of 21 June 2010, p. 2170; ‘the CIEC’), transposed Directive 2008/118 into Portuguese law.
8.
According to Article 106 of the CIEC, entitled ‘Special rules concerning release for consumption’:
‘1.   The release for consumption of cigarettes shall be subject to the rules on limitation applicable in the period between 1 September and 31 December of each calendar year.
2.   In the period referred to in the preceding paragraph, the release for consumption of cigarettes each month by each economic operator must not exceed the quantitative limits, deriving from the application of a multiplying factor of 10% to the average monthly quantity of cigarettes released for consumption in the 12 months immediately preceding.
3.   For the purposes of the preceding paragraph, the calculation of the monthly average shall be based on the total quantity of releases for consumption of cigarettes, non-exempt, between 1 September of the previous year and 31 August of the following year.
4.   Each economic operator shall provide to the competent customs office, by 15 September of each year at the latest, an initial declaration indicating its monthly average and setting out the quantitative limit applicable in its case in the limitation period.
5.   In exceptional circumstances, duly justified by the sudden change for a limited time of the volume of sales, the failure to comply with those quantitative limits may be authorised, although they shall not be taken into account for the purpose of calculating the monthly average for the following year.
6.   After the expiry of the limitation period and at the latest at the end of the month of January of each year, economic operators shall provide the competent customs office with a declaration of discharge indicating the total quantity of cigarettes actually released for consumption in the limitation period.
7.   The amount of cigarettes exceeding the quantitative limit referred to in paragraph 4 are subject to the payment of tax at the rate applicable on the date on which the declaration of discharge is lodged, where it is established that the quantitative limit has been exceeded by comparing the information in that document and those documents processed by the administration, without prejudice, where applicable, to the infringement procedure that may be necessary.
8.   The rules laid down in this article are individually applicable on Mainland Portugal, the Autonomous Region of the Azores and the Autonomous Region of Madeira, since the obligations laid down in the preceding paragraph must be fulfilled at the customs office where the release for consumption is dealt with.’
Facts of the dispute, the procedure in the main proceedings, the questions referred for a preliminary ruling and the procedure before the Court
9.
Companhia de Distribuição Integral Logista Portugal SA, formerly Compañía de Distribución Integral Logista SA (‘Logista’), is an undertaking active in the retail of tobacco products which is authorised by the Portuguese customs authority to operate as a warehousekeeper in the Autonomous Region of Madeira.
10.
On 15 September 2010, Logista, under Article 106(4) of the CIEC, lodged an initial declaration with the customs services in Funchal (Portugal) of the average monthly quantity of cigarettes released for consumption during the 12 months immediately preceding, that is to say between 1 September 2009 and 31 August 2010.
11.
On 22 September 2010, the customs services in Funchal informed Logista that, on the basis of the information provided, it had been allocated a monthly quantitative limit of 1644005 cigarettes for the limitation period from September to December 2010, calculated in accordance with Article 106(1) to (3) of the CIEC.
12.
On 18 November 2010, Logista requested authorisation to exceed that quantitative limit pursuant to Article 106(5) of the CIEC.
13.
On 7 January 2011, the customs services in Funchal adopted an order rejecting that request on the ground that failure to comply with the quantitative limit in question was not justified by a sudden change in sales volume for a limited time, as required by Article 106(5) of the CIEC. Logista then lodged an appeal against that decision, which was also rejected.
14.
On 18 January 2011, in accordance with Article 106(6) of the CIEC, Logista provided the customs services in Funchal with a declaration of discharge attesting to the release for consumption of a quantity of cigarettes more than three times the quantitative limit during the period between September and December 2010.
15.
Pursuant to Article 106(7) of the CIEC, Logista was issued with an additional demand for excise duty amounting to EUR 4 607.69, plus EUR 1.80, based on the number of cigarettes it had released for consumption during the period from September to December 2010 and which exceeded the quantitative limit provided for in Article 106(2) of the CIEC.
16.
Logista challenged that additional demand before the Tribunal Administrativo e Fiscal do Funchal (Administrative and Finance Court, Funchal, Portugal), which dismissed its appeal. Logista subsequently appealed against that decision before the Supremo Tribunal Administrativo (Supreme Administrative Court).
17.
Before the referring court, Logista submits, inter alia, that the application of the rate of excise duty on the date of submission of the declaration of discharge infringes Articles 7 and 9 of Directive 2008/118, according to which the chargeability conditions and the rate applicable are those in force on the date on which the tobacco was released for consumption. The Autoridade Tributária e Aduaneira (Tax and Customs Authority, Portugal) contends that the arrangements at issue comply with those provisions.
18.
In those circumstances, the Supremo Tribunal Administrativo (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1)
Do the quantitative limits on the release for consumption established by Article 106 of the CIEC constitute quantitative restrictions on imports or measures having equivalent effect within the meaning of Article 34 TFEU, in so far as they have the effect that, during the last four months of each year, the quantities of cigarettes sold by operators may not exceed the average monthly quantity of cigarettes released for consumption in the 12 months immediately preceding?
(2)
Is it contrary to the rules on the chargeability of excise duty established by Articles 7 and 9 of [Directive 2008/118] to levy tax on any quantities of cigarettes that exceed the quantitative limit on the release for consumption established under Article 106(2) of the CIEC at the rate applicable on the date on which the declaration of discharge is lodged, in accordance with Article 106(7) of the CIEC?’
19.
Written observations were submitted by Logista, the Tax and Customs Authority, the Portuguese Government and the European Commission.
20.
The Portuguese Government and the Commission presented oral argument at a hearing held on 22 March 2023.
Analysis
21.
By its second question, the referring court asks, in essence, whether Articles 7 and 9 of Directive 2008/118 must be interpreted as precluding national legislation under which quantities of cigarettes in excess of the quantitative limit for release for consumption provided for therein are subject to the rate of excise duty in force after the date of release for consumption.
Preliminary observations
22.
First, it should be recalled that Directive 2008/118, which repealed and replaced Directive 92/12/EEC, (
3
) was adopted on the basis of Article 93 of the EC Treaty (now Article 113 TFEU). According to that article, the EU legislature may adopt provisions for the harmonisation of national legislation concerning indirect taxation, in particular excise duties, to the extent that such harmonisation is necessary to ensure the establishment and the functioning of the internal market and to avoid distortion of competition.
23.
Thus, Directive 2008/118 seeks to ensure the proper functioning of the internal market through the free movement of excise goods within the European Union. To that end, that directive requires the harmonisation of national legislation governing this type of taxation to ensure that the concept, and conditions for chargeability, of excise duty are the same in all Member States. (
4
)
24.
The general arrangements for excise duty introduced by that directive apply only to the goods listed in Article 1(1) thereof, namely energy products and electricity, alcohol and alcoholic beverages, and manufactured tobacco.
25.
For those arrangements to be effective, the excise duty must be levied when those goods come on to the internal market. It follows that the nature of excise consumption tax requires that chargeability should be as close as possible to the final consumer.
26.
The EU legislature has translated those requirements as follows. Article 2 of Directive 2008/118 provides that the taxable event of excise duty is the production or importation of those goods into the territory of the European Union. Article 7(1) of that directive provides that excise duty becomes chargeable at the time, and in the Member State, of release for consumption, and the first paragraph of Article 9 states that the chargeability conditions and rate of excise duty to be applied are to be those in force on the date on which duty becomes chargeable in the Member State where release for consumption takes place.
27.
There is generally a period of time between the occurrence of the taxable event and the point at which the excise duty becomes chargeable. Thus, the EU legislature provided for the possibility of placing excise goods under a duty suspension arrangement, defined in Article 4(7) of Directive 2008/118 as ‘a tax arrangement applied to the production, processing, holding or movement of excise goods not covered by a customs suspensive procedure or arrangement, excise duty being suspended’. In that scenario, the release for consumption is postponed until the departure, whether regular or irregular, of the goods at issue from that arrangement, such that any transaction involving the goods may be carried out without excise duty becoming chargeable.
28.
Other cases of ‘release for consumption’ are, according to Article 7(2) of Directive 2008/118, the holding, production (regular or irregular) and importation (regular or irregular) of excise goods outside a duty suspension arrangement.
29.
In my view, it is only with this legislative context in mind that a position can be taken on the interpretation that the Court is asked to provide in the present case.
The relationship between Article 7 and Article 9 of Directive 2008/118
30.
It should be recalled that, under Article 106 of the CIEC, the excise duty on the quantity of cigarettes exceeding the quantitative limit provided for therein becomes chargeable in January of the year following that in which they are released for consumption, the latter taking place during the period between 1 September and 31 December in a given calendar year.
31.
It is common ground that this rule is explained by the objective of protecting the financial interests of the Portuguese Republic, by preventing economic operators from being able to release cigarettes in excessive quantities at the end of the year in anticipation of an increase in the rate of excise duty, such a practice constituting a form of abuse.
32.
In the light of those factors, the question arises whether such legislation complies with the arrangements laid down in Directive 2008/118.
33.
The answer requires a determination of the exact relationship between Article 7 and the first paragraph of Article 9 of Directive 2008/118.
34.
To that end, Article 7(1) of that directive must first be viewed from a literal and teleological perspective.
35.
According to its wording, excise duty is chargeable when the product concerned is released for consumption, the cases of ‘release for consumption’ being exhaustively listed in paragraph 2 of that article.
36.
The purpose of this provision is to harmonise the timing of the chargeability of excise duty, to ensure the proper functioning of the internal market. This functional link between its objective and the more general objective of Directive 2008/118 is evidenced by the Commission’s proposal for Directive 92/12, (
5
) which envisages the introduction of a ‘new Community concept’ of the chargeability of excise duty on the ground that ‘it is essential for chargeability to be linked to release for consumption’. (
6
)
37.
The clear and unconditional wording of Article 7(1) of Directive 2008/118, as well as the absence of any reference to the laws of the Member States, combined with the central role of that provision in achieving the harmonisation sought by that directive, argue in favour of an interpretation according to which the provision in question is incompatible with a national rule under which excise duty is chargeable at a time other than that of release for consumption.
38.
The first paragraph of Article 9 of Directive 2008/118 provides that the chargeability conditions and rate of excise duty to be applied are those in force on the date on which duty becomes chargeable in the Member State where release for consumption takes place. The second paragraph of that article states that the excise duty is levied and collected and, where appropriate, reimbursed or remitted according to the procedure laid down by each Member State.
39.
The second paragraph does not constitute, as the Portuguese Government claimed, inter alia, at the hearing, an exception to the application of the first paragraph of Article 9 of Directive 2008/118. There is nothing in the wording of Article 9 of that directive to suggest that such a relationship exists between those two rules. On the contrary, an examination of that article reveals that its purpose is to define the scope of the regulatory power of the Member States outside the material scope covered by the harmonised provisions.
40.
It must be observed that the ‘chargeability conditions’ referred to in the first paragraph of Article 9 of Directive 2008/118 must necessarily be distinguished from the conditions relating to the concept of chargeability, which, according to recital 8 of that directive, must be the same in all the Member States. (
7
)
41.
Those latter conditions, which are set out in Article 7(1) and in the first paragraph of Article 9 of Directive 2008/118, concern the time from which the excise duty is chargeable, the Member State in which it is to be levied, the relevant date for identifying the rate of excise duty and the applicable chargeability conditions. However, the ‘chargeability conditions’ referred to in the first paragraph of Article 9 of Directive 2008/118 are unquestionably other conditions, such as – as stated in the second paragraph of that article – the procedures for levying, collecting, remitting or reimbursing excise duty.
42.
Moreover, the Court held, in Van de Water, (
8
) that Article 6 of Directive 92/12, which was replaced, without substantial amendments, by Article 9 of Directive 2008/118, must be interpreted in the same way. Specifically, the Court ruled that ‘by ensuring, in Article 6(1) of [Directive 92/12], that the rules governing the chargeability of excise duty are the same in all the Member States, the [EU] legislature was clearly not seeking to harmonise the procedures for the levying and collection of duty by those States’ and that ‘in Article 6(2), it expressly left it to the Member States to determine those procedures’.
43.
In other words, the exercise of the regulatory power of the Member States remains confined to determining the procedures for levying, collecting, remitting and reimbursing excise duty. Thus, it can never affect the concept of chargeability and the conditions thereof, including the condition that excise duty becomes chargeable at the time of release for consumption of the excise goods, if the harmonisation purpose, which is the rationale behind Directive 2008/118, is not to be undermined. (
9
)
44.
It follows from those considerations that, contrary to what the Commission maintains in its written observations, a similar conclusion to that in the judgment in Commission v Portugal (
10
) cannot be reached in the present case. (
11
)
45.
The case that gave rise to that judgment concerned Portuguese tax arrangements under which packets of cigarettes released for consumption in a particular financial year could be sold and marketed until the end of the third month of the year following that in which they were released for consumption. (
12
) Since all packets of cigarettes that were not sold before the end of that period would have been taxed at the rate of excise duty in force that year, the Commission argued that the effect of the Portuguese tax arrangements was to force economic operators to pay a supplementary excise duty on packets of cigarettes that had already been lawfully released for consumption, in breach of Articles 7 and 9 of Directive 2008/118.
46.
In its judgment, the Court held that those tax arrangements did not have the effect of charging excise duty on a different date to the date of release for consumption. The Court observed, in that regard, that those arrangements involved a rule according to which, at the end of the period for marketing and sale to the public, economic operators could re-release those packets for consumption, by affixing a new tax marking (or, in the case of excise duty previously paid, the operators could be reimbursed on condition that the packets were destroyed under customs supervision). (
13
)
47.
It is for that reason that the Court concluded that the right conferred on the Member States in the first paragraph of Article 9 of Directive 2008/118 necessarily means that they have the power to adopt measures of the kind provided for by those arrangements.
48.
That is not the case here. As stated earlier, the tax arrangements established by Article 106 of the CIEC invariably provide that the rate of excise duty applicable to packets of cigarettes released for consumption in breach of the quantitative limit provided for therein is not the rate in force at the time of release for consumption, as required by the first paragraph of Article 9 of Directive 2008/118, but that in force at the time of submission of the declaration of discharge, in other words after the date of release for consumption. As confirmed by the Portuguese Government at the hearing, Portuguese law makes no provision for the re-release of those goods for consumption.
49.
In that connection, the Portuguese Government claimed, inter alia, that, in paragraph 59 of the judgment in Commission v Portugal, the Court recognised that the Member States have a legitimate interest in taking appropriate steps to protect their financial interests and that the prevention of possible tax evasion, avoidance and abuse is an objective pursued by Directive 2008/118. Thus, according to that Member State, it was entitled to adopt tax arrangements such as those in the present case, in so far as those arrangements seek to prevent the abusive practice of forestalling.
50.
No one disputes that, in principle, the Member States have the right to adopt tax arrangements aimed at achieving those objectives. However, it is clear that that right is subject to the condition that those arrangements do not exceed the scope of the regulatory power conferred on Member States by the second paragraph of Article 9 of Directive 2008/118.
51.
However, that condition is not met in the present case, in so far as the arrangements provided for in Article 106 of the CIEC imply that the rate applicable to packets of cigarettes exceeding the prescribed quantitative limit is that in force after the date of release for consumption. As a result, that rule affects the time at which excise duty is chargeable and thus encroaches on the scope of the harmonised provisions of Directive 2008/118.
52.
The interpretation proposed in this Opinion is supported, in my view, by a contextual element that seems to me to be of particular importance. I note that situations in which excise duty on a product already released for consumption is chargeable after the date of release for consumption are expressly referred to in Chapter V of Directive 2008/118 (‘Movement and taxation of excise goods after release for consumption’). The provisions of that chapter – which address the need to maintain the principle of fiscal territoriality, according to which excise duties are payable in the country in which the goods are actually consumed, and to avoid double taxation of the goods concerned – (
14
) are, according to recital 26 of that directive, without prejudice to its general structure. (
15
)
53.
Those provisions cover situations in which, following the release for consumption of excise goods and the payment of the related excise duty, the goods have been moved within the European Union. Specifically, Section 1 of that chapter concerns goods acquired by private individuals and transported to another Member State, Section 2 covers goods held for commercial purposes in another Member State, and Section 3 concerns distance selling where the authorised warehousekeeper or registered consignee who purchased the goods is established in another Member State. (
16
) It is common ground that the tax arrangements at issue in the present case do not fall within any of those situations.
54.
Lastly, Directive (EU) 2020/262, (
17
) which recently repealed and replaced Directive 2008/118, offers additional evidence to support the interpretation adopted in this Opinion. Although that directive is not applicable ratione temporis in the main proceedings, it may still serve as a basis for interpreting Directive 2008/118.
55.
Article 8 of Directive 2020/262, which replaces Article 9 of Directive 2008/118, includes a (new) third paragraph, according to which ‘by way of derogation
from the first paragraph, when excise duty rates are changed, stocks of excise goods already released for consumption may be subject, where appropriate, to an increase in, or a reduction of, the excise duty’, (
18
) the first paragraph of that article reproducing that of Article 9. Evidently, the EU legislature sought to derogate from the provision whereby the applicable rate of excise duty is that in force on the date on which the excise duty is chargeable, by authorising the Member States, in the event of a change in the rate of excise duty, to apply the increased or reduced rate to those stocks of goods, and not the rate in force at the time of release for consumption of those goods. (
19
)
56.
There is little doubt, in my view, that the introduction of that express derogation by the EU legislature demonstrates its intention to reduce the scope of the first paragraph of Article 9 of Directive 2008/118.
57.
The effect of this new paragraph is to remove tax arrangements, such as the present one, from the harmonisation sought by establishing general arrangements for excise duty. As a result of that derogation, Member States now have the regulatory power to adopt measures such as those aimed at preventing forestalling.
58.
Unlike Directive 2020/262, Article 7 and the first paragraph of Article 9 of Directive 2008/118 confer no regulatory power on Member States to determine the concept and conditions for chargeability provided for therein. This implies, a contrario, that tax arrangements such as those in the present case, which may comply with Directive 2020/262, are unlawful under Directive 2008/118.
59.
In the light of the foregoing, I propose that the Court e answer the second question referred for a preliminary ruling by the Supremo Tribunal Administrativo (Supreme Administrative Court) that Articles 7 and 9 of Directive 2008/118 preclude a legal regime such as that provided for in Article 106 of the CIEC.
Conclusion
60.
Having regard to the foregoing considerations, I propose that the Court of Justice answer the second question referred by the Supremo Tribunal Administrativo (Supreme Administrative Court, Portugal) as follows:
Articles 7 and 9 of Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC
must be interpreted as precluding national legislation under which quantities of cigarettes in excess of the quantitative limit for release for consumption referred to therein are subject to the rate of excise duty in force after the date of release for consumption.
(
1
)	Original language: French.
(
2
)	Council Directive of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC (OJ 2009 L 9, p. 12).
(
3
)	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). Since the relevant provisions of Directive 92/12 are in essence identical in scope to those of Directive 2008/118, the case-law of the Court relating to Directive 92/12 is also applicable to Directive 2008/118. See, to that effect, judgment of 9 June 2022, IMPERIAL TOBACCO BULGARIA (C‑55/21, EU:C:2022:459, paragraph 37 and the case-law cited).
(
4
)	See, for example, recital 8 of Directive 2008/118.
(
5
)	See, to that effect, the proposal for a Council directive on the general arrangements for products subject to excise duty and on the holding and movement of such products (COM(90) 431 final) (OJ 1990 C 322, p. 1). It should be noted that the explanatory statement and the comments on specific articles in French are only available in the document containing the Portuguese version.
(
6
)	See p. 4 of the Portuguese version of the proposal (COM(90) 431 final). It should be noted that those comments concern Article 4 of that proposal, which became Article 6 of Directive 92/12 without any substantial amendment being made at the end of the legislative procedure. The text of that article was then adopted by Articles 7 and 9 of Directive 2008/118.
(
7
)	It should be noted that several provisions of Directive 2008/118 refer to chargeability conditions, although without offering a definition. In addition to recital 8 and the first paragraph of Article 9 of that directive, see Articles 33 and 36 thereof.
(
8
)	Judgment of 5 April 2001 (C‑325/99, EU:C:2001:201, paragraph 40).
(
9
)	See, in particular, judgment of 8 February 2018, Commission v Greece (C‑590/16, EU:C:2018:77, paragraph 56), according to which such an interpretation ‘would authorise, praeter legem, a derogation from Article 7 of Directive 2008/118 and would thwart the goal of harmonisation of the conditions for charging excise duty’.
(
10
)	Judgment of 29 June 2017 (C‑126/15, ‘the judgment in Commission v Portugal, EU:C:2017:504).
(
11
)	Thus, the referring court questions, in the order for reference, the possibility of applying the conclusions reached by the Court in the judgment in Commission v Portugal, given that the two cases do not share the same legal framework.
(
12
)	The provisions of Portuguese law governing those arrangements are Article 27 of Ministerial Order No 1295/2007 and point 4.2.9 of Chapter XII of the Excise Duty Handbook.
(
13
)	Judgment in Commission v Portugal, paragraph 57.
(
14
)	Proposal (COM(90) 431 final), paragraphs 13 and 16.
(
15
)	That recital reads as follows: ‘It is appropriate to clarify the taxation and procedural rules relating to the movement of goods on which excise duty has already been paid in a Member State without changing their general structure.’
(
16
)	It is clear from the proposal for a Council Directive laying down the general arrangement for excise duty (COM(2008) 78 final/2), of 26 February 2008, that Chapter V replaces Articles 7 to 10 of Directive 92/12 and reproduces the Commission’s earlier proposal for a modification of these articles included in the document (COM(2004) 227 final) of 2 April 2004.
(
17
)	Council Directive of 19 December 2019 laying down the general arrangements for excise duty (OJ 2020 L 58 p. 4).
(
18
)	Emphasis added.
(
19
)	It is worth noting that at the hearing, the Commission confirmed that a legal regime such as that provided for in Article 106 of the CIEC would be covered in the third paragraph of Article 8 of Directive 2020/262.