61978CJ0171_EN
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Parties
IN CASE 171/78
COMMISSION OF THE EUROPEAN COMMUNITIES, REPRESENTED BY ITS LEGAL ADVISER, JOHANNES FOENS BUHL, ACTING AS AGENT, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF ITS LEGAL ADVISER, MARIO CERVINO, JEAN MONNET BUILDING, KIRCHBERG,
APPLICANT,
V
KINGDOM OF DENMARK, REPRESENTED BY PER LACHMANN, HEAD OF THE SECRETARIAT OF THE COMMON MARKET DIVISION AT THE MINISTRY FOR FOREIGN AFFAIRS, ACTING AS AGENT, ASSISTED, ON BEHALF OF POUL SCHMITH, GOVERNMENT ADVOCATE, BY GEORG LETT, ADVOCATE, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE OFFICE OF VAGN DITLEV LARSEN, ACTING CHARGE D ' AFFAIRES AT THE ROYAL EMBASSY OF DENMARK,
DEFENDANT,
Subject of the case
APPLICATION FOR A DECLARATION THAT, BY NOT COMPLYING WITH THE OPINION BY WHICH THE COMMISSION REQUESTED IT TO INTRODUCE UNIFORM TAXES ON SPIRITS, THE KINGDOM OF DENMARK HAS BEEN IN BREACH OF THE FIRST PARAGRAPH OR, ALTERNATIVELY, THE SECOND PARAGRAPH OF ARTICLE 95 OF THE EEC TREATY,
Grounds
1 BY APPLICATION OF 7 AUGUST 1978, THE COMMISSION LODGED UNDER ARTICLE 169 OF THE EEC TREATY AN APPLICATION FOR A DECLARATION THAT THE KINGDOM OF DENMARK, BY APPLYING DISCRIMINATORY TAXATION ON SPIRITS, HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER ARTICLE 95 OF THE EEC TREATY .
2 AT THE SAME TIME, THE COMMISSION SUBMITTED TO THE COURT OF JUSTICE APPLICATIONS AGAINST THE FRENCH REPUBLIC AND THE ITALIAN REPUBLIC RELATING TO PROBLEMS OF THE SAME NATURE . THE APPLICATIONS CONTAIN, IN ALL THREE INSTANCES, CERTAIN GENERAL CONSIDERATIONS FROM WHICH IT FOLLOWS THAT THOSE APPLICATIONS FORM PART OF A GENERAL ACTION AIMING TO ENSURE THAT THE MEMBER STATES CONCERNED COMPLY WITH THE OBLIGATIONS IMPOSED ON THEM BY THE TREATY IN THIS RESPECT . IT THEREFORE SEEMS APPROPRIATE TO CLARIFY FIRST OF ALL CERTAIN QUESTIONS OF PRINCIPLE COMMON TO THE THREE CASES AS REGARDS THE INTERPRETATION OF ARTICLE 95 IN THE LIGHT OF THE SPECIAL FEATURES OF THE MARKET IN SPIRITS .
THE INTERPRETATION OF ARTICLE 95
3 UNDER THE FIRST PARAGRAPH OF ARTICLE 95 ' ' NO MEMBER STATE SHALL IMPOSE, DIRECTLY OR INDIRECTLY, ON THE PRODUCTS OF OTHER MEMBER STATES ANY INTERNAL TAXATION OF ANY KIND IN EXCESS OF THAT IMPOSED DIRECTLY OR INDIRECTLY ON SIMILAR DOMESTIC PRODUCTS ' ' . THE SECOND PARAGRAPH OF THAT ARTICLE ADDS AS FOLLOWS : ' ' FURTHERMORE, NO MEMBER STATE SHALL IMPOSE ON THE PRODUCTS OF OTHER MEMBER STATES ANY INTERNAL TAXATION OF SUCH A NATURE AS TO AFFORD INDIRECT PROTECTION TO OTHER PRODUCTS ' ' .
4 THE ABOVE-MENTIONED PROVISIONS SUPPLEMENT, WITHIN THE SYSTEM OF THE TREATY, THE PROVISIONS ON THE ABOLITION OF CUSTOMS DUTIES AND CHARGES HAVING EQUIVALENT EFFECT . THEIR AIM IS TO ENSURE FREE MOVEMENT OF GOODS BETWEEN THE MEMBER STATES IN NORMAL CONDITIONS OF COMPETITION BY THE ELIMINATION OF ALL FORMS OF PROTECTION WHICH RESULT FROM THE APPLICATION OF INTERNAL TAXATION WHICH DISCRIMINATES AGAINST PRODUCTS FROM OTHER MEMBER STATES . AS THE COMMISSION HAS CORRECTLY STATED, ARTICLE 95 MUST GUARANTEE THE COMPLETE NEUTRALITY OF INTERNAL TAXATION AS REGARDS COMPETITION BETWEEN DOMESTIC PRODUCTS AND IMPORTED PRODUCTS .
5 THE FIRST PARAGRAPH OF ARTICLE 95, WHICH IS BASED ON A COMPARISON OF THE TAX BURDENS IMPOSED ON DOMESTIC PRODUCTS AND ON IMPORTED PRODUCTS WHICH MAY BE CLASSIFIED AS ' ' SIMILAR ' ', IS THE BASIC RULE IN THIS RESPECT . THIS PROVISION, AS THE COURT HAS HAD OCCASION TO EMPHASIZE IN ITS JUDGMENT OF 10 OCTOBER 1978 IN CASE 148/77, H . HANSEN JUN . & O . C . BALLE GMBH & CO . V HAUPTZOLLAMT FLENSBURG ( 1978 ) ECR 1787, MUST BE INTERPRETED WIDELY SO AS TO COVER ALL TAXATION PROCEDURES WHICH CONFLICT WITH THE PRINCIPLE OF THE EQUALITY OF TREATMENT OF DOMESTIC PRODUCTS AND IMPORTED PRODUCTS ; IT IS THEREFORE NECESSARY TO INTERPRET THE CONCEPT OF ' ' SIMILAR PRODUCTS ' '
WITH SUFFICIENT FLEXIBILITY . THE COURT SPECIFIED IN THE JUDGMENT OF 17 FEBRUARY 1976 IN THE REWE CASE ( CASE 45/75 ( 1976 ) ECR 181 ) THAT IT IS NECESSARY TO CONSIDER AS
SIMILAR PRODUCTS WHICH ' ' HAVE SIMILAR CHARACTERISTICS AND MEET THE SAME NEEDS FROM THE POINT OF VIEW OF CONSUMERS ' ' . IT IS THEREFORE NECESSARY TO DETERMINE THE SCOPE OF THE FIRST PARAGRAPH OF ARTICLE 95 ON THE BASIS NOT OF THE CRITERION OF THE STRICTLY IDENTICAL NATURE OF THE PRODUCTS BUT ON THAT OF THEIR SIMILAR AND COMPARABLE USE .
6 THE FUNCTION OF THE SECOND PARAGRAPH OF ARTICLE 95 IS TO COVER, IN ADDITION, ALL FORMS OF INDIRECT TAX PROTECTION IN THE CASE OF PRODUCTS WHICH, WITHOUT BEING SIMILAR WITHIN THE MEANING OF THE FIRST PARAGRAPH, ARE NEVERTHELESS IN COMPETITION, EVEN PARTIAL, INDIRECT OR POTENTIAL, WITH CERTAIN PRODUCTS OF THE IMPORTING COUNTRY . THE COURT HAS ALREADY EMPHASIZED CERTAIN ASPECTS OF THAT PROVISION IN ITS JUDGMENT OF 4 APRIL 1978 IN CASE 27/77, FIRMA FINK-FRUCHT GMBH V HAUPTZOLLAMT MUNCHEN-LANDSBERGER STRASSE ( 1978 ) ECR 223, IN WHICH IT STATED THAT FOR THE PURPOSES OF THE APPLICATION OF THE FIRST PARAGRAPH OF ARTICLE 95 IT IS SUFFICIENT FOR THE IMPORTED PRODUCT TO BE IN COMPETITION WITH THE PROTECTED DOMESTIC PRODUCTION BY REASON OF ONE OR SEVERAL ECONOMIC USES TO WHICH IT MAY BE PUT, EVEN THOUGH THE CONDITION OF SIMILARITY FOR THE PURPOSES OF THE FIRST PARAGRAPH OF ARTICLE 95 IS NOT FULFILLED .
7 WHILST THE CRITERION INDICATED IN THE FIRST PARAGRAPH OF ARTICLE 95 CONSISTS IN THE COMPARISON OF TAX BURDENS, WHETHER IN TERMS OF THE RATE, THE MODE OF ASSESSMENT OR OTHER DETAILED RULES FOR THE APPLICATION THEREOF, IN VIEW OF THE DIFFICULTY OF MAKING SUFFICIENTLY PRECISE COMPARISONS BETWEEN THE PRODUCTS IN QUESTION, THE SECOND PARAGRAPH OF THAT ARTICLE IS BASED UPON A MORE GENERAL CRITERION, IN OTHER WORDS THE PROTECTIVE NATURE OF THE SYSTEM OF INTERNAL TAXATION .
8 THE APPLICATION IN THIS INSTANCE OF THE CRITERION OF SIMILARITY, WHICH DETERMINES THE SCOPE OF THE PROHIBITION LAID DOWN IN THE FIRST PARAGRAPH OF ARTICLE 95, HAS GIVEN RISE TO DIFFERENCES OF OPINION BETWEEN THE PARTIES . ACCORDING TO THE COMMISSION, ALL SPIRITS, WHATEVER THE RAW MATERIALS USED FOR THEIR MANUFACTURE, HAVE SIMILAR PROPERTIES AND IN ESSENCE MEET THE SAME NEEDS OF CONSUMERS . THEREFORE, WHATEVER THE SPECIFIC CHARACTERISTICS OF THE VARIOUS PRODUCTS COMING WITHIN THAT CATEGORY AND WHATEVER THE CONSUMER HABITS IN THE VARIOUS REGIONS OF THE COMMUNITY, SPIRITS AS FINISHED PRODUCTS REPRESENT, FROM THE POINT OF VIEW OF CONSUMERS, A SINGLE GENERAL MARKET . IT IS NECESSARY TO OBSERVE THAT THIS CONCEPT IS EXPRESSED IN THE PROPOSALS SUBMITTED BY THE COMMISSION TO THE COUNCIL FOR THE ESTABLISHMENT OF A COMMON ORGANIZATION OF THE MARKET IN ALCOHOL, BASED ON THE APPLICATION OF A SINGLE RATE OF TAX FOR ALL THE PRODUCTS IN QUESTION ON THE BASIS OF THEIR PURE ALCOHOL CONTENT .
9 THIS CONCEPT IS CONTESTED BY THE GOVERNMENTS OF THE THREE DEFENDANT MEMBER STATES . IN THEIR OPINION, IT IS POSSIBLE TO DISTINGUISH IN THE CASE OF SPIRITS VARIOUS CATEGORIES OF PRODUCT WHICH DIFFER EITHER IN TERMS OF THE RAW MATERIALS USED OR OF THEIR TYPICAL CHARACTERISTICS OR OF THE CONSUMER HABITS OBSERVED IN THE VARIOUS MEMBER STATES .
10 IN THIS CONNEXION, THE COMMISSION POINTS OUT HOWEVER THAT THE APPRAISAL OF THE CHARACTERISTICS OF THE VARIOUS ALCOHOLIC BEVERAGES, IN THE SAME WAY AS CONSUMER HABITS, IS VARIABLE IN TIME AND SPACE AND THAT SUCH FACTORS CANNOT PROVIDE VALID CRITERIA AS REGARDS THE COMMUNITY TAKEN AS A WHOLE . IT DRAWS ATTENTION MOREOVER TO THE DANGER OF HARDENING SUCH HABITS BY MEANS OF TAX CLASSIFICATIONS MADE BY THE MEMBER STATES .
11 THESE ARGUMENTS PROMPT THE FOLLOWING REPLY FROM THE COURT . THE APPLICATION OF THE PROVISIONS OF ARTICLE 95 TO SPECIFIC NATIONAL SITUATIONS FORMING THE SUBJECT-MATTER OF THE APPLICATIONS SUBMITTED BY THE COMMISSION MUST BE EXAMINED IN THE CONTEXT OF THE GENERAL STATE OF THE MARKET IN ALCOHOLIC BEVERAGES WITHIN THE COMMUNITY . IN THIS RESPECT IT IS NECESSARY TO TAKE INTO ACCOUNT THREE LINES OF THOUGHT :
( A ) IT IS IMPOSSIBLE, FIRST OF ALL, TO DISREGARD THE FACT THAT ALL THE PRODUCTS IN QUESTION, WHATEVER THEIR SPECIFIC CHARACTERISTICS IN OTHER RESPECTS, HAVE COMMON GENERIC FEATURES . ALL ARE THE OUTCOME OF THE DISTILLATION PROCEDURE ; ALL CONTAIN, AS A PRINCIPAL CHARACTERISTIC INGREDIENT, ALCOHOL SUITABLE FOR HUMAN CONSUMPTION AT A RELATIVELY HIGH DEGREE OF CONCENTRATION . IT FOLLOWS THAT WITHIN THE LARGEST GROUP OF ALCOHOLIC BEVERAGES SPIRITS FORM AN IDENTIFIABLE WHOLE UNITED BY COMMON CHARACTERISTICS ;
( B ) IN SPITE OF THOSE COMMON CHARACTERISTICS, IT IS POSSIBLE TO DISTINGUISH WITHIN THAT WHOLE PRODUCTS WHICH HAVE THEIR OWN MORE OR LESS PRONOUNCED CHARACTERISTICS . THOSE CHARACTERISTICS SPRING EITHER FROM THE RAW MATERIALS USED ( IN THIS CONNEXION IT IS POSSIBLE TO DISTINGUISH IN PARTICULAR SPIRITS DISTILLED FROM WINE, FRUIT, CEREALS AND SUGAR-CANE ), OR FROM MANUFACTURING PROCESSES OR, AGAIN, FROM THE FLAVOURINGS ADDED . TYPICAL VARIETIES OF SPIRITS MAY IN FACT BE DEFINED BY THESE PARTICULAR CHARACTERISTICS, SO MUCH SO THAT SOME OF THEM ARE EVEN PROTECTED BY REGISTERED DESIGNATIONS OF ORIGIN ;
( C ) AT THE SAME TIME, IT IS IMPOSSIBLE TO DISREGARD THE FACT THAT THERE ARE, IN THE CASE OF SPIRITS, IN ADDITION TO WELL-DEFINED PRODUCTS WHICH ARE PUT TO RELATIVELY SPECIFIC USES, OTHER PRODUCTS WITH LESS DISTINCT CHARACTERISTICS AND WIDER USES . THERE ARE, ON THE ONE HAND, NUMEROUS PRODUCTS DERIVED FROM WHAT ARE KNOWN AS ' ' NEUTRAL ' '
SPIRITS, IN OTHER WORDS SPIRITS OF ALL ORIGINS INCLUDING MOLASSES ALCOHOL AND POTATO ALCOHOL ; THESE PRODUCTS
OWE THEIR INDIVIDUALITY ONLY TO FLAVOURING ADDITIVES WITH A MORE OR LESS PRONOUNCED TASTE . ON THE OTHER HAND, IT IS NECESSARY TO DRAW ATTENTION TO THE FACT THAT IN THE CASE OF SPIRITS THERE ARE PRODUCTS WHICH MAY BE CONSUMED IN VERY DIFFERENT FORMS, EITHER NEAT OR DILUTED OR, AGAIN, IN THE FORM OF MIXTURES . THESE PRODUCTS MAY THEREFORE BE IN COMPETITION WITH A RANGE OF VARYING SIZE OF OTHER ALCOHOLIC PRODUCTS OF MORE LIMITED USE . A CHARACTERISTIC OF THE THREE CASES BROUGHT BEFORE THIS COURT IS HOWEVER THE FACT THAT IN EACH THERE ARE, IN ADDITION TO WELL-DEFINED SPIRITS, ONE OR SEVERAL PRODUCTS WITH A BROAD RANGE OF USES .
12 TWO CONCLUSIONS FOLLOW FROM THIS ANALYSIS OF THE MARKET IN SPIRITS . FIRST, THERE IS, IN THE CASE OF SPIRITS CONSIDERED AS A WHOLE, AN INDETERMINATE NUMBER OF BEVERAGES WHICH MUST BE CLASSIFIED AS ' ' SIMILAR PRODUCTS ' '
WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 95, ALTHOUGH IT MAY BE DIFFICULT TO DECIDE THIS IN SPECIFIC CASES, IN VIEW OF THE NATURE OF THE FACTORS IMPLIED BY DISTINGUISHING CRITERIA SUCH AS FLAVOUR AND CONSUMER HABITS . SECONDLY, EVEN IN CASES IN WHICH IT IS IMPOSSIBLE TO RECOGNIZE A SUFFICIENT DEGREE OF SIMILARITY BETWEEN THE PRODUCTS CONCERNED, THERE ARE NEVERTHELESS, IN THE CASE OF ALL SPIRITS, COMMON CHARACTERISTICS WHICH ARE SUFFICIENTLY PRONOUNCED TO ACCEPT THAT IN ALL CASES THERE IS AT LEAST PARTIAL OR POTENTIAL COMPETITION . IT FOLLOWS THAT THE APPLICATION OF THE SECOND PARAGRAPH OF ARTICLE 95 MAY COME INTO CONSIDERATION IN CASES IN WHICH THE RELATIONSHIP OF SIMILARITY BETWEEN THE SPECIFIC VARIETIES OF SPIRITS REMAINS DOUBTFUL OR CONTESTED .
13 IT APPEARS FROM THE FOREGOING THAT ARTICLE 95, TAKEN AS A WHOLE, MAY APPLY WITHOUT DISTINCTION TO ALL THE PRODUCTS CONCERNED . IT IS SUFFICIENT THEREFORE TO EXAMINE WHETHER THE APPLICATION OF A GIVEN NATIONAL TAX SYSTEM IS DISCRIMINATORY OR, AS THE CASE MAY BE, PROTECTIVE, IN OTHER WORDS WHETHER THERE IS A DIFFERENCE IN THE RATE OR THE DETAILED RULES FOR LEVYING THE TAX AND WHETHER THAT DIFFERENCE IS LIKELY TO FAVOUR A GIVEN DOMESTIC PRODUCTION . IT WILL BE NECESSARY TO EXAMINE WITHIN THIS FRAMEWORK THE ECONOMIC RELATIONSHIPS BETWEEN THE PRODUCTS CONCERNED AND THE CHARACTERISTICS OF THE TAX SYSTEMS WHICH FORM THE SUBJECT-MATTER OF THE DISPUTES IN THE CASE OF EACH OF THE APPLICATIONS LODGED BY THE COMMISSION .
14 IN THE VARIOUS PROCEDURES, THE PARTIES HAVE RELIED, WITH REGARD TO THE DISTINCTION BETWEEN SEVERAL CATEGORIES OF ALCOHOLIC PRODUCT, UPON CERTAIN STATEMENTS MADE BY THE COURT OF JUSTICE IN THE JUDGMENT IN THE HANSEN & BALLE CASE, SUPRA, WHICH WAS DELIVERED AT A TIME WHEN THESE APPLICATIONS WERE PENDING . REFERENCE HAS BEEN MADE MORE PARTICULARLY TO A PASSAGE IN THAT JUDGMENT WHICH STATES AS FOLLOWS : ' ' AT THE PRESENT STAGE OF ITS DEVELOPMENT AND IN THE ABSENCE OF ANY UNIFICATION OR HARMONIZATION OF THE RELEVANT
PROVISIONS, COMMUNITY LAW DOES NOT PROHIBIT MEMBER STATES FROM GRANTING TAX ADVANTAGES, IN THE FORM OF EXEMPTION FROM OR REDUCTION OF DUTIES, TO CERTAIN TYPES OF SPIRITS OR TO CERTAIN CLASSES OF PRODUCERS . INDEED, TAX ADVANTAGES OF THIS KIND MAY SERVE LEGITIMATE ECONOMIC OR SOCIAL PURPOSES, SUCH AS THE USE OF CERTAIN RAW MATERIALS BY THE DISTILLING INDUSTRY, THE CONTINUED PRODUCTION OF PARTICULAR SPIRITS OF HIGH QUALITY, OR THE CONTINUANCE OF CERTAIN CLASSES OF UNDERTAKINGS SUCH AS AGRICULTURAL DISTILLERIES ' ' .
15 SINCE CERTAIN OF THE DEFENDANT GOVERNMENTS HAVE RELIED UPON THESE STATEMENTS IN ORDER TO JUSTIFY THEIR TAX SYSTEM, THE COURT HAS ASKED THE COMMISSION QUESTIONS AS TO THE COMPATIBILITY WITH COMMUNITY LAW OF THE DIFFERENCES IN THE RATES OF TAX APPLIED TO VARIOUS CATEGORIES OF ALCOHOLIC BEVERAGES AND AS TO ITS INTENTIONS IN THAT RESPECT WITHIN THE CONTEXT OF THE HARMONIZATION OF TAX LEGISLATION . THE COMMISSION, AFTER RE-STATING ITS VIEW THAT ALL SPIRITS ARE SIMILAR AND ITS INTENTION TO PROPOSE THE INTRODUCTION, AT LEAST IN PRINCIPLE, OF A SINGLE RATE OF TAX IN FUTURE COMMUNITY REGULATIONS, DRAWS ATTENTION TO THE FACT THAT THE PROBLEMS LINKED TO THE USE OF CERTAIN RAW MATERIALS, CONTINUED HIGH-QUALITY PRODUCTION AND THE ECONOMIC STRUCTURE OF MANUFACTURING UNDERTAKINGS TO WHICH THE COURT REFERRED IN THE ABOVE-MENTIONED JUDGMENT MAY BE RESOLVED BY MEANS OF AID TO PRODUCERS OR SYSTEMS OF COMPENSATION BETWEEN PRODUCERS, TAKING INTO ACCOUNT THE DIFFERENCE IN THE COST OF THE RAW MATERIALS USED . IT DRAWS ATTENTION TO THE FACT THAT THIS OBJECTIVE HAS ALREADY BEEN ATTAINED WITHIN THE CONTEXT OF THE COMMON ORGANIZATION OF THE MARKET IN WINE AS REGARDS SPIRITS OBTAINED BY DISTILLING WINE . ACCORDING TO THE COMMISSION, SUCH MECHANISMS MIGHT SAFEGUARD THE MARKETING CHANCES OF CERTAIN PRODUCTS WHICH ARE HANDICAPPED BY PRODUCTION COSTS, WITHOUT ITS BEING NECESSARY TO HAVE RECOURSE FOR THIS PURPOSE TO THE PROCEDURE OF VARIATION IN THE RATES OF TAX .
16 IN VIEW OF THESE OBSERVATIONS, THE COURT POINTS OUT THAT ALTHOUGH IT ACKNOWLEDGED IN THE JUDGMENT IN THE HANSEN & BALLE CASE, TAKING INTO ACCOUNT THE STATE OF DEVELOPMENT OF COMMUNITY LAW, THAT CERTAIN TAX EXEMPTIONS OR TAX CONCESSIONS ARE LAWFUL, THIS IS ON CONDITION THAT THE MEMBER STATES USING THOSE POWERS EXTEND THE BENEFIT THEREOF WITHOUT DISCRIMINATION TO IMPORTED PRODUCTS IN THE SAME CONDITIONS . IT IS NECESSARY TO EMPHASIZE THAT IT WAS ACKNOWLEDGED THAT THOSE PRACTICES WERE LAWFUL IN PARTICULAR SO AS TO ENABLE PRODUCTIONS OR UNDERTAKINGS TO CONTINUE WHICH WOULD NO LONGER BE PROFITABLE WITHOUT THESE SPECIAL TAX BENEFITS BECAUSE OF THE RISE IN PRODUCTION COSTS . ON THE OTHER HAND, THE CONSIDERATIONS EXPRESSED IN THAT JUDGMENT CANNOT BE UNDERSTOOD AS LEGITIMATING TAX DIFFERENCES WHICH ARE DISCRIMINATORY OR PROTECTIVE .
THE LEGISLATION APPLICABLE AND THE FRAMEWORK OF THE DISPUTE .
17 THE DANISH LEGISLATION, AS IN FORCE AT THE DATE OF THE DISPUTE, IN OTHER WORDS ARTICLE 2 OF CO-ORDINATED LAW NO 151 OF 4 APRIL 1978 ON EXCISE DUTY ON SPIRITS, PROVIDES THAT EXCISE DUTY SHALL BE FIXED AS FOLLOWS :
( 1 ) IN THE CASE OF AQUAVIT AND SCHNAPPS ( HEREINAFTER REFERRED TO SOLELY AS ' ' AQUAVIT ' '
BECAUSE THE TWO WORDS ARE SYNONOMOUS ) AT DKR 167.50 PER LITRE OF PURE ETHYL ALCOHOL AND
( 2 ) IN THE CASE OF ' ' OTHER PRODUCTS ' '
AT DKR 257.15 PER LITRE OF PURE ALCOHOL .
18 UNDER ARTICLE 3 OF THE SAME LAW, PRODUCTS BENEFITING FROM THE RATE OF TAX FIXED BY THE FIRST PARAGRAPH OF ARTICLE 2 ARE DEFINED AS BEING ' ' MANUFACTURED FROM NEUTRAL SPIRITS AND CONTAINING IN THEIR COMPOSITION VEGETABLE FLAVOURING EXTRACTS ' '
AND MOREOVER AS ' ' NOT RESEMBLING GIN, VODKA, GENEVA, WACHOLDER, ETC ., LIQUEUR, PUNCH, BITTERS, ETC ; ANISEED SPIRITS, RUM, SPIRITS DISTILLED FROM FRUIT AND OTHER SPIRITS WHOSE TYPICAL TASTE IS PRODUCED THROUGH DISTILLATION OR MATURATION ' ' .
19 AS A PRELIMINARY, THE DANISH GOVERNMENT EXAMINES THE RELATIONSHIP BETWEEN ARTICLE 95, ON WHICH THE COMMISSION HAS BASED ITS APPLICATION, AND ARTICLE 99 ON THE HARMONIZATION OF TAX LEGISLATION . IT ASKS WHETHER THE IMPLEMENTATION OF THAT HARMONIZATION SHOULD NOT TAKE PRIORITY OVER THE APPLICATION OF ARTICLE 95 . IT CLAIMS THAT SINCE THE MEMBER STATES HAVE RETAINED THE POWER THEMSELVES TO DETERMINE TAX POLICY AND TAXATION, THE EFFECTS WHICH A TAX SYSTEM MIGHT HAVE ON THE NORMAL FUNCTIONING OF THE COMMON MARKET SHOULD BE ELIMINATED BY VIRTUE OF THE HARMONIZATION OF LEGISLATION PROVIDED FOR BY ARTICLE 99 . THE COMMISSION SHOULD NOT ARBITRARILY SEEK TO IMPOSE SUCH HARMONIZATION UNDER ARTICLE 95 INSTEAD OF FOLLOWING THE PROCEDURE LAID DOWN BY ARTICLE 99 .
20 THERE IS NO DOUBT THAT THE DISPARITY IN THE NATIONAL TAX SYSTEMS AND IN PARTICULAR THE DIFFERENCES IN THE RATES OF TAX WHICH ARE PARTICULARLY PRONOUNCED AS REGARDS TAXATION ON SPIRITS CONSTITUTE AN OBSTACLE TO THE FREE MOVEMENT OF GOODS AND TO THE DEVELOPMENT OF TRADE BETWEEN THE MEMBER STATES . HOWEVER, THE IMPLEMENTATION OF THE PROGRAMME OF HARMONIZATION LAID DOWN BY ARTICLE 99 CANNOT CONSTITUTE A PRELIMINARY TO THE APPLICATION OF ARTICLE 95 . WHATEVER IN FACT THE DISPARITIES BETWEEN THE NATIONAL TAX SYSTEMS, ARTICLE 95 LAYS DOWN A BASIC REQUIREMENT WHICH IS DIRECTLY LINKED TO THE
PROHIBITION ON CUSTOMS DUTIES AND CHARGES HAVING AN EQUIVALENT EFFECT BETWEEN THE MEMBER STATES IN THAT IT INTENDS TO ELIMINATE BEFORE ANY HARMONIZATION ALL NATIONAL TAX PRACTICES WHICH ARE LIKELY TO CREATE DISCRIMINATION AGAINST IMPORTED PRODUCTS OR TO AFFORD PROTECTION TO CERTAIN DOMESTIC PRODUCTS . IT THEREFORE APPEARS THAT ARTICLES 95 AND 99 PURSUE DIFFERENT OBJECTIVES, SINCE ARTICLE 95 AIMS TO ELIMINATE IN THE IMMEDIATE FUTURE DISCRIMINATORY OR PROTECTIVE TAX PRACTICES, WHILST ARTICLE 99 AIMS TO REDUCE TRADE BARRIERS ARISING FROM THE DIFFERENCES BETWEEN THE NATIONAL TAX SYSTEMS, EVEN WHERE THOSE ARE APPLIED WITHOUT DISCRIMINATION .
21 THIS ARGUMENT MUST THEREFORE BE REJECTED, WITH THE RESULT THAT THE APPLICATION MUST BE EXAMINED EXCLUSIVELY WITHIN THE CONTEXT IN WHICH IT WAS LODGED BY THE COMMISSION, IN OTHER WORDS, WITHIN THAT OF ARTICLE 95 .
THE APPRAISAL OF THE CONTESTED TAX SYSTEM
22 THE COMMISSION CONSIDERS THAT THE DANISH TAX SYSTEM IS DISCRIMINATORY AS REGARDS SPIRITS IMPORTED FROM THE OTHER MEMBER STATES BECAUSE THE BULK OF DOMESTIC PRODUCTION, CONSTITUTED BY AQUAVIT, BENEFITS FROM A REDUCED RATE OF TAX WHEREAS SIMILAR OR COMPETING ALCOHOLIC BEVERAGES IMPORTED FROM THE OTHER MEMBER STATES ARE SUBJECT TO THE HIGHEST RATE OF TAX, APART FROM INSIGNIFICANT QUANTITIES WHICH HAVE THE SPECIFIC CHARACTERISTICS OF AQUAVIT AS DEFINED BY THE LAW .
23 IN THIS RESPECT THE COMMISSION PUTS FORWARD THE FOLLOWING FIGURES WHICH ARE NOT CONTESTED BY THE DANISH GOVERNMENT : DURING 1977, CHOSEN AS THE REFERENCE YEAR, OF A TOTAL CONSUMPTION OF 9 240 000 LITRES OF PURE ALCOHOL, 5 787 000 LITRES BENEFITED FROM A REDUCED RATE OF TAX ; OF THAT QUANTITY, 5 728 000 LITRES WERE PRODUCED IN DENMARK, WHEREAS 59 000 LITRES ONLY WERE IMPORTED, IN OTHER WORDS APPROXIMATELY 34 000 LITRES FROM THE FEDERAL REPUBLIC OF GERMANY AND THE REST FROM THIRD COUNTRIES . AS FOR OTHER SPIRITS, THE CONSUMPTION OF WHICH, EXPRESSED IN PURE ALCOHOL CONTENT, WAS 3 452 000 LITRES DURING THE REFERENCE YEAR, 1 118 000 LITRES WERE OF DOMESTIC PRODUCTION WHEREAS 2 334 000 LITRES WERE IMPORTED .
24 ACCORDING TO THE COMMISSION, THOSE FIGURES SHOW THAT THE REDUCED RATE OF TAX BENEFITS ALMOST EXCLUSIVELY A TYPE OF SPIRIT WHICH REPRESENTS THE BULK OF DOMESTIC PRODUCTION WHEREAS THE HEAVIEST RATE OF TAX APPLIES TO ALL OTHER ALCOHOLIC BEVERAGES OF WHICH THE MAJORITY ARE IMPORTED PRODUCTS ( IN OTHER WORDS, APPROXIMATELY TWO-THIRDS THEREOF ). AS A WHOLE, THIS TAX SYSTEM THEREFORE CLEARLY DISCRIMINATES AGAINST IMPORTED SPIRITS . AS SUCH, THIS SYSTEM IS CONTRARY TO THE FIRST PARAGRAPH OF ARTICLE 95 OF THE TREATY, ACCORDING TO WHICH A MEMBER STATE CANNOT IMPOSE ON THE PRODUCTS OF OTHER MEMBER STATES INTERNAL TAXATION IN EXCESS OF THAT IMPOSED ON SIMILAR DOMESTIC PRODUCTS . IF THE SIMILARITY BETWEEN AQUAVIT AND OTHER SPIRITS REFERRED TO BY THE DANISH LAW IS NOT ACKNOWLEDGED, THE COMMISSION CONSIDERS THAT THE DIFFERENCE CREATED BY THAT LAW IS IN ANY CASE OF SUCH A NATURE AS TO AFFORD INDIRECT PROTECTION TO THE DOMESTIC PRODUCTION OF AQUAVIT WITHIN THE MEANING OF THE SECOND PARAGRAPH OF ARTICLE 95 .
25 THE DANISH GOVERNMENT CONTESTS THE OPINION PUT FORWARD BY THE COMMISSION ACCORDING TO WHICH ALL SPIRITS FOR HUMAN CONSUMPTION PRODUCED BY DISTILLATION MUST BE CONSIDERED AS ' ' SIMILAR ' '
PRODUCTS WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 95 . IT CONSIDERS THAT THE TREATY DOES NOT PREVENT THE MEMBER STATES FROM MAKING CLASSIFICATIONS BETWEEN THE VARIOUS ALCOHOLIC PRODUCTS SO AS TO APPLY TO THOSE PRODUCTS DIFFERENT RATES OF TAX . THE COURT OF JUSTICE ITSELF, IT CLAIMS, ACKNOWLEDGED IN ITS JUDGMENT IN THE HANSEN & BALLE CASE, SUPRA, THE POWER FOR MEMBER STATES TO CREATE CERTAIN DIFFERENCES AS REGARDS TAXATION ON SPIRITS . THE DEFENDANT GOVERNMENT CONSIDERS THAT THE DANISH STATE IS THEREFORE ENTITLED TO MAINTAIN A DIFFERENCE IN THE RATES OF TAX ON THE BASIS OF THE SPECIAL PROPERTIES WHICH ARE CHARACTERISTIC OF THE PRODUCTS LISTED IN BOTH CATEGORIES LAID DOWN IN ITS TAX LEGISLATION . THE DANISH GOVERNMENT IS OF THE OPINION THAT CONSUMER HABITS PROVIDE A CRITERION WHEREBY AQUAVIT MAY BE DIFFERENTIATED FROM OTHER ALCOHOLIC BEVERAGES . IN SUPPORT OF THAT STATEMENT IT PRODUCES MARKET SURVEYS SHOWING THAT AQUAVIT, BY VIRTUE OF DANISH EATING AND DRINKING HABITS, IS CONSUMED PRINCIPALLY AT MEALS AS AN ACCOMPANIMENT TO TYPICAL DISHES SO THAT IT CANNOT BE CONSIDERED AS A PRODUCT EQUIVALENT TO OTHER SPIRITS .
26 MOREOVER, THE DANISH GOVERNMENT DRAWS ATTENTION TO THE FACT THAT THE CONTESTED TAX SYSTEM MAKES NO DISTINCTION BETWEEN IMPORTED PRODUCTS AND DOMESTIC PRODUCTS . ACCORDING TO THEIR CLASSIFICATION IN COMPARISON WITH THE CATEGORIES OF TAX LAID DOWN BY THE LAW, THE PRODUCTS ARE TAXED AT THE CORRESPONDING RATE, WHATEVER THEIR ORIGIN ; THUS IMPORTED AQUAVIT BENEFITS FROM THE RATE OF TAX LEVIED ON DOMESTIC AQUAVIT, WHILST OTHER DOMESTIC ALCOHOLIC BEVERAGES ARE SUBJECT TO THE SAME RATE OF TAX AS IMPORTED PRODUCTS .
THE SHARES HELD BY THE VARIOUS PRODUCTS ON THE MARKET ARE OF NO IMPORTANCE FOR THE PURPOSES OF APPRAISING WHETHER THE LAW IS COMPATIBLE WITH ARTICLE 95 . IT THUS APPEARS THAT IN THE SYSTEM OF THE DANISH LAW THERE IS NO RELATIONSHIP BETWEEN THE FACT THAT GOODS CROSS A FRONTIER AND THE APPLICATION OF A HIGHER RATE OF TAX .
27 THE DANISH GOVERNMENT RECALLS IN ADDITION THAT FOR A CERTAIN PERIOD ALCOHOLIC BEVERAGES WERE SUBJECT TO A MIXED TAX SYSTEM WHICH INVOLVED, IN ADDITION TO A SPECIFIC DUTY, THE APPLICATION OF AN AD VALOREM DUTY . THE EXCISE DUTY LEVIED UNDER THE PRESENT LEGISLATION IS IN FACT NOTHING MORE THAN AN ADJUSTED AD VALOREM DUTY . THIS FACT EXPLAINS WHY AQUAVIT, AS AN INEXPENSIVE PRODUCT, BENEFITS FROM A MORE FAVOURABLE RATE OF TAX THAN OTHER SPIRITS WHOSE PRODUCTION COSTS ARE HIGHER . MOREOVER, THERE IS NOTHING TO PREVENT DENMARK FROM RE-INTRODUCING THE OLD SYSTEM ; A TAX APPLIED ACCORDING TO THAT METHOD WOULD AMOUNT TO REDUCING THE TAX ON AQUAVIT EVEN FURTHER WHEREAS SPIRITS WITH A HIGH PRODUCTION COST, SUCH AS WHISKY AND COGNAC, WOULD BE TAXED EVEN MORE HEAVILY .
28 AS FOR THE APPLICATION OF THE SECOND PARAGRAPH OF ARTICLE 95, THE DANISH GOVERNMENT STATES THAT THE REAL CONSUMER CHOICE IS BETWEEN AQUAVIT AND BEER, ON THE ONE HAND, AND WINE, ON THE OTHER ; THE POSSIBILITIES OF SUBSTITUTING AQUAVIT FOR OTHER SPIRITS AND VICE VERSA ARE ON THE OTHER HAND NEGLIGIBLE . FOR THE PURPOSES OF THE APPLICATION OF THE SECOND PARAGRAPH OF ARTICLE 95 THE DETERMINING CRITERION IS A ' ' MARKED CROSS-ELASTICITY ' '
BETWEEN PRODUCTS SO THAT A SLIGHT INCREASE IN THE PRICE OF ONE PRODUCT HAS THE EFFECT OF DISPLACING A HIGH PROPORTION OF DEMAND TO ANOTHER . THE DANISH GOVERNMENT RECALLS IN THIS RESPECT THE CRITERIA WHICH THE COURT APPLIED IN ORDER TO DELIMIT THE MARKETS CONCERNED WITH A VIEW TO THE APPLICATION OF THE COMPETITION RULES CONTAINED IN THE TREATY . FOR ITS PART, THE COMMISSION, IT CLAIMS, HAS NOT PRODUCED ANY EVIDENCE TO ESTABLISH THE EXISTENCE OF A PROTECTIVE EFFECT WHICH IS THE CONDITION FOR THE APPLICATION OF THE SECOND PARAGRAPH OF ARTICLE 95 .
29 IN THE ALTERNATIVE CONCLUSIONS LISTED IN ITS DEFENCE, THE DANISH GOVERNMENT REQUESTS THE COURT TO LIMIT, IF NECESSARY, THE DECLARATION THAT IT HAS FAILED TO FULFIL ITS OBLIGATIONS UNDER THE TREATY TO THOSE PRODUCTS WHICH, BECAUSE THEY HAVE A SPECIAL AFFINITY WITH AQUAVIT, MUST BE TREATED IN THE SAME WAY AS AQUAVIT FROM THE TAX POINT OF VIEW, AND TO DISMISS THE APPLICATION WITH REGARD TO THE REMAINDER .
30 IN THE DEFENCE PUT FORWARD BY THE DANISH GOVERNMENT, IT IS NECESSARY TO REJECT, AS A PRELIMINARY, THE ARGUMENT BASED ON THE FACT THAT THE SYSTEM IN QUESTION IS NOTHING OTHER THAN A TRANSFORMED SYSTEM OF AD VALOREM TAXATION . IN FACT, EVERY TAX SYSTEM MUST BE APPRAISED IN THE LIGHT OF ARTICLE 95 ON ITS OWN MERITS AND NOT IN TERMS OF A TAX SYSTEM WHICH PRECEDED IT OR WHICH
MIGHT IF NECESSARY BE SUBSTITUTED FOR IT . MOREOVER, IT IS NECESSARY TO EMPHASIZE THE CONTRADICTORY NATURE OF THE ARGUMENT PUT FORWARD IN THIS RESPECT BY THE DANISH GOVERNMENT .
IN FACT, OF THE SPIRITS WHICH ARE SUBJECT TO THE HIGHEST RATE OF TAX UNDER ARTICLE 3 OF THE DANISH LAW, THERE ARE SEVERAL PRODUCTS WHICH, BEING MANUFACTURED ON THE BASIS OF NEUTRAL ALCOHOL, MAY BE CONSIDERED AS INEXPENSIVE SPIRITS, LIKE AQUAVIT . IN A SYSTEM OF AD VALOREM TAXATION, THEY SHOULD THEREFORE BENEFIT FROM THE SAME TAX ADVANTAGE AS AQUAVIT . THE FACT THAT THOSE PRODUCTS ARE TREATED AS REGARDS TAXATION IN THE SAME WAY AS PRODUCTS WITH A HIGHER PRODUCTION COST SHOWS THAT THE TAX SYSTEM AT PRESENT IN FORCE DOES NOT HAVE THE CHARACTERISTICS OF AD VALOREM TAXATION .
31 THE APPRAISAL OF THE COMPATIBILITY OF THE DANISH TAX SYSTEM WITH ARTICLE 95 RAISES A SPECIAL PROBLEM IN THAT THE PREFERENTIAL RATE LAID DOWN BY THE DANISH LEGISLATION BENEFITS A SINGLE PRODUCT DEFINED PRECISELY BY THE LAW TO THE EXCLUSION OF ALL OTHER SPIRITS . IT IS THEREFORE NECESSARY TO APPRAISE THE EXISTENCE OF EITHER A RELATIONSHIP OF SIMILARITY OR COMPETITION BETWEEN A SINGLE PRODUCT AND AN INDETERMINATE NUMBER OF PRODUCTS SOME OF WHICH ARE IDENTIFIED BY THE LAW WHEREAS OTHERS ARE NOT SPECIFIED .
32 IN THIS CONNEXION, IT IS NECESSARY TO POINT OUT, FIRST, THAT OF THE PRODUCTS SUBJECT TO THE HIGHEST RATE OF TAX THERE ARE SEVERAL NAMED BEVERAGES THE
CHARACTERISTICS OF WHICH ARE AKIN TO AQUAVIT IN THAT THEY ARE NORMALLY MANUFACTURED FROM NEUTRAL ALCOHOL AND OWE THEIR CHARACTERISTIC FLAVOUR TO ADDED FLAVOURING EXTRACTS . IT IS NECESSARY TO ASSUME THAT THOSE PRODUCTS HAVE BEEN LISTED EXPRESSLY AMONG THE SPIRITS SUBJECT TO A HIGHER RATE OF TAX PRECISELY BECAUSE OF THEIR SIMILARITY . IN THE CASE OF THOSE BEVERAGES THERE CAN THEREFORE BE NO DOUBT THAT THERE HAS BEEN AN INFRINGEMENT OF THE FIRST PARAGRAPH OF ARTICLE 95 .
33 AS REGARDS MOST OF THE OTHER ALCOHOLIC BEVERAGES SUBJECT UNDER THE DANISH LEGISLATION TO THE HIGHEST RATE OF TAX, IT IS IMPOSSIBLE TO ESTABLISH WITH CERTAINTY HOW MANY OF THEM ARE SPIRITS WHICH MAY BE CLASSIFIED AS ' ' SIMILAR ' '
TO AQUAVIT WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 95 AND HOW MANY OF THEM ARE PRODUCTS WHICH, ALTHOUGH THEY CANNOT BE CLASSIFIED AS SIMILAR, ARE IN COMPETITION OR IN THE SUBSTITUTION RELATIONSHIP WITH AQUAVIT WHICH IS REFERRED TO BY THE SECOND PARAGRAPH OF THE SAME ARTICLE .
34 THE COURT CONSIDERS THAT IT IS NOT NECESSARY TO GIVE A RULING ON THIS MATTER IN ORDER TO RESOLVE THE PRESENT DISPUTE . IN FACT, EVEN IF DOUBTS REMAIN AS TO THE QUESTION TO WHAT EXTENT THE NUMEROUS ALCOHOLIC PRODUCTS CLASSIFIED BY DANISH LEGISLATION IN THE MOST HEAVILY TAXED TAX CATEGORY MUST BE CONSIDERED AS PRODUCTS SIMILAR TO AQUAVIT WITHIN THE MEANING OF THE FIRST PARAGRAPH OF
ARTICLE 95, IT IS IMPOSSIBLE REASONABLY TO CONTEST THAT ALL THOSE BEVERAGES ARE WITHOUT EXCEPTION IN AT LEAST PARTIAL COMPETITION WITH THE PRODUCT BENEFITED BY THE DANISH LEGISLATION .
35 IN FACT, AS INDICATED ABOVE, THE SPIRITUOUS BEVERAGES REFERRED TO BY THE DANISH LEGISLATION AS PRODUCTS OBTAINED BY DISTILLATION HAVE SUFFICIENT CHARACTERISTICS IN COMMON WITH AQUAVIT TO CONSTITUTE AT LEAST IN CERTAIN CIRCUMSTANCES AN ALTERNATIVE CHOICE FOR CONSUMERS . BECAUSE OF THEIR VERY VARIED PROPERTIES, THESE BEVERAGES ARE LIKELY TO BE IN COMPETITION WITH AQUAVIT AT TIMES . THE FACT THAT AQUAVIT IS PREFERRED IN DENMARK BY CONSUMERS AS AN ACCOMPANIMENT TO CERTAIN TYPICAL MEALS DOES NOT PREVENT THAT BEVERAGE FROM STILL BEING USED FOR OTHER PURPOSES OR FROM THUS BEING IN AT LEAST A PARTIAL SUBSTITUTION RELATIONSHIP WITH AN INDETERMINATE NUMBER OF OTHER TYPES OF SPIRIT . IT MAY THEREFORE BE SAID THAT TO THE EXTENT TO WHICH THE SPIRITUOUS BEVERAGES ON WHICH THE HIGHEST TAX BURDEN IS IMPOSED ARE NOT BEVERAGES WHICH ARE SIMILAR TO AQUAVIT WITHIN THE FIRST PARAGRAPH OF ARTICLE 95 THEY ARE IN ANY CASE IN COMPETITION WITH AQUAVIT AS REFERRED TO IN THE SECOND PARAGRAPH OF ARTICLE 95 .
36 VIEWED BY ITSELF, THE TAX SYSTEM INTRODUCED BY THE DANISH LEGISLATION CONTAINS INCONTESTABLE DISCRIMINATORY OR PROTECTIVE CHARACTERISTICS . ALTHOUGH IT DOES NOT ESTABLISH ANY FORMAL DISTINCTION ACCORDING TO THE ORIGIN OF THE PRODUCTS, IT HAS BEEN ADJUSTED SO THAT THE BULK OF THE DOMESTIC PRODUCTION OF SPIRITS COMES WITHIN THE MOST FAVOURABLE TAX CATEGORY WHEREAS ALMOST ALL IMPORTED PRODUCTS COME WITHIN THE MOST HEAVILY TAXED CATEGORY . THESE CHARACTERISTICS OF THE SYSTEM ARE NOT OBLITERATED BY THE FACT THAT A VERY SMALL FRACTION OF IMPORTED SPIRITS BENEFITS FROM THE MOST FAVOURABLE RATE OF TAX WHEREAS, CONVERSELY, A CERTAIN PROPORTION OF DOMESTIC PRODUCTION COMES WITHIN THE SAME TAX CATEGORY AS IMPORTED SPIRITS . IT THEREFORE APPEARS THAT THE TAX SYSTEM IS DEVISED SO THAT IT LARGELY BENEFITS A TYPICAL DOMESTIC PRODUCT AND HANDICAPS IMPORTED SPIRITS TO THE SAME EXTENT .
37 IN CONCLUSION, IT IS NECESSARY TO STATE THAT THE SYSTEM OF TAXATION APPLIED TO SPIRITS IN THE KINGDOM OF DENMARK, AS FOLLOWS MOST RECENTLY FROM THE CO-ORDINATED LAW OF 4 APRIL 1978, IS INCOMPATIBLE WITH THE REQUIREMENTS OF ARTICLE 95 OF THE TREATY, WITHOUT ITS BEING NECESSARY TO MAKE A DISTINCTION IN THIS RESPECT BETWEEN THE FIRST AND THE SECOND PARAGRAPH OF THAT PROVISION . IT FOLLOWS THAT THE ALTERNATIVE CONCLUSIONS PUT FORWARD BY THE DANISH GOVERNMENT IN ITS DEFENCE ARE PURPOSELESS .
Decision on costs
COSTS
38
UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS .
39
SINCE THE DEFENDANT HAS FAILED IN ITS SUBMISSIONS, IT MUST BE ORDERED TO PAY THE COSTS .
Operative part
ON THOSE GROUNDS,
THE COURT
HEREBY :
1 . DECLARES THAT, BY THE APPLICATION OF A DISCRIMINATORY TAX ON SPIRITS AS FOLLOWS FROM CO-ORDINATED LAW NO 151 OF 4 APRIL 1978, THE KINGDOM OF DENMARK HAS FAILED, AS REGARDS PRODUCTS IMPORTED FROM THE OTHER MEMBER STATES, IN ITS OBLIGATIONS UNDER ARTICLE 95 OF THE EEC TREATY ;
2 . ORDERS THE KINGDOM OF DENMARK TO PAY THE COSTS .