2.

The applicant further maintains that the Commission was wrong to deny that the criterion which it regarded as decisive, namely a deviation of more than 10% in the rate of utilization from the Community average, was satisfied in the applicant's case. The Commission reached that conclusion, it claims, by assuming too low a capacity for the Bremen No II hot-rolled wide-strip mill. If the Commission had conceded that the output capacity was, not 355000 tonnes per month, but (as stated in the pleadings) 459000 tonnes per months, the applicant's utilization of capacity following the quotas as notified would have been disclosed as being no more than 39%, and hence it would indeed have been more than 10% below the Community average (56% during the first quarter of 1981). Furthermore, the applicant complains in that regard — in its pleadings, at any rate — that the Commission wrongly failed to take into consideration the capacity of the Bremen No I hot-rolled wide-strip mill. This mill was commissioned in 1958 and was temporarily closed down in April 1974 as part of the restructuring plan. (a) As regards the first of these two points, namely the capacity of the No II rolling-mill, the applicant claims that it cannot simply be held to previous declarations on the matter; it is true that it entered on Questionnaire No 2/61 an output of 314000 tonnes per month for the years 1977 to 1979, an output of 355000 tonnes per month from 1 January 1980 onwards, and only from 1 January 1981 onward — once the appropriate declarations had been given during an inspection of its business in November 1980 — did it return a figure of 459000 tonnes per month. The real issue is whether conclusive evidence was later adduced in favour of a reassessment, and the applicant maintains that in its case that must indeed be conceded. Here, the applicant refers to an expert opinion which was drawn up in May 1981 at the instigation of the Commission and of the German Federal Ministry of Economic Affairs. Although one of the experts, the Belgian Centre de Recherches Métallurgiques, speaks of an output of only 337000 tonnes per month, that may be explained by the fact that the expert was relying on the furnace throughput as previously guaranteed by the supplier as a minimum, which, however, is no evidence as to the actual capacity. The other expert, the Japanese company Kawasaki, working on the basis (which the applicant regards as correct) that the output of the walking-beam furnaces is 507 tonnes per hour, reaches a completely different conclusion, namely that the capacity is 487000 tonnes per month. By way of demonstrating that the latter figure is quite realistic the applicant makes reference to another opinion, which was prepared on the basis of capacity tests conducted in the presence of representatives of the supplier of the walking-beam furnaces. Its findings are that the walking-beam furnaces, which in effect form the bottleneck of the rolling-mill and are therefore of prime importance to its capacity, may be assumed to have an average hourly output of 570 tonnes which is greater than that cited by the applicant. That should at least have persuaded the Commission to conduct a thorough investigation of the disputed capacity before it gave a definitive decision on the applicant's claim under Article 14 of Decision 2794/80. On the other hand, the Commission takes the view that it was quite entitled to adopt the figures at which, following the first correction of the applicant's report, its officials had arrived in tķe course of an inspection of the applicant's business in 1980. Kawasaki's statements could not possibly have given rise to a further rectification, because they referred only to the abstract, technical capacity and not to the maximum possible productivity within the meaning of Questionnaire No 2/61, which concentrated on the planned specific production structure and on the specific technical conditions valid for the year in question. Furthermore, it was a question merely of forecasting possible production in the future. In addition, the Commission refers to the applicant's claim that its capacity in the period 1977 to 1980 was already of the size stated by it, which in other proceedings gave rise to a dispute concerning the appropriate margin of increase in reference production pursuant to Article 4 (3) of Decision 2794/80. However, both together — that is, the application of the abovementioned provision on the one hand and of Article 14 on the other — is certainly not possible in the Commission's opinion. Had an increase actually been agreed under Article 4 (3) for the first quarter of 1981, in accordance with the capacity as stated by the applicant (which the applicant did not, in any case, attempt to achieve by way of an application to the Court), the resultant quotas would — as the Commission illustrates using an imaginary calculation — have been such that the applicant's utilization rate would have stood at only 6.4 % below the Community average, thereby failing yet again to satisfy the criteria considered essential by the Commission for invoking Article 14. (b) In my view the Court cannot concur with the Commission on that point either. (aa) If, as its last-mentioned submission appears to suggest, the Commission sees problems of admissibility as far as the disputed application of Article 14 with reference to assessed capacity is concerned, and regard being had to the fact that the applicant, in another case, (Case 119/81 cited previously), considered an increase under Article 4 (3) in its reference production figure to be appropriate on the ground that even in the years 1977 to 1979 the capacity of the No II rolling-mill allegedly amounted to 459000 tonnes per month, whereas it has omitted to adopt the same argument when contesting notification of quotas for the first quarter of 1981, then it would be difficult to agree with it on that point. I fail in principle to see how the tactics and submissions in a separate action can lead to the conclusion that a line of argument in the present, quite independent case is inadmissible. The fact that it was not in reliance upon Article 4 (3) of Decision 2794/80 that the quota decision governing the first quarter of 1981 was contested.— and of possible relevance here is the alleged promise, to be dealt with in Case 312/81, whereby a senior official of the Commission undertook in March 1981 to solve the applicant's problems in the first quarter of 1981, or perhaps the reflexion that it is now difficult to prove the existence of a higher capacity for the years 1977 to 1979 — may therefore lead to the supposition that the applicant's capacity during those years is thereby definitively established as being of the size assumed by the Commission. No compelling evidence may be drawn from that, however, as to the extent of the applicant's capacity by the beginning of 1981, with the result that the applicant cannot now be debarred from relying upon Article 14, which relates, not to any previous capacity but to the capacity obtaining in whichever quarterly period is at issue. It is my conviction, moreover, that application of Article 14 would not have been precluded a priori if, in respect of the first quarter of 1981, an increase of the extent calculated by the Commission had been allowed under Article 4 (3), precisely because the very observation that the applicant's rate of utilization would then have been only 6.4% below the Community average would undeniably have indicated exceptional difficulties. (bb) Certainly for the purpose of deciding this issue, nothing may be deduced either from the fact that the applicants, for several years, stated a different capacity in Questionnaires No 2/61, or from the judgment in Case 119/81 (cited previously) which also contains findings as to the applicant's capacities. It does indeed seem understandable that, at times when its plant was far from being fully utilized on account of difficulties on the steel market, the applicant did not closely investigate the output potential of that plant and may as a result — for the significance of such findings could not be perceived at the time — negligently have made false statements. If penalties are called for on that account, then they are those provided under Article 47 of the ECSC Treaty; on the other hand, additional sanctions in the form of an adherence as part of the quota system to declarations submitted would be — and here the applicant has demonstrated, on the basis of calculations, the extent of the associated economic disadvantages which it would suffer — excessive and unjustified. It must therefore be basically possible in such a case to return to previous declarations and, provided that sufficient evidence is available, to call for them to be rectified. With regard to the judgment in Case 119/81 (cited previously) it is a decisive factor that those proceedings were concerned exclusively with the proper application of Article 4 (3) of Decision 2794/80, that is to say, with the applicant's maximum possible output in the period 1977 to 1979. Although in that respect the evidence adduced by the applicant was held to be insufficient, in particular on the grounds that the closing remarks of the expert opinion presented speak in terms of a possible increase in capacity, it is by no means certain that the same is necessarily true of the application of Article 14 of Decision 2794/80, relating as it does to demonstrable capacity at the beginning of 1981 and the utilization thereof. (cc) There is no doubt in my mind that the reports and their supplements submitted by the applicant — to wit, the joint report of the Centre for Metallurgical Research and the Kawasaki Steel Corporation of 1 May 1981, Kawasaki's report of the same date, Professor Jeschar's expert opinion of 12 January 1982 with its appendix of 2 February 1982, and the letter from the supplier of the applicant's walking-beam furnaces of 15 February 1982, together with the attached report on an output test conducted in December 1981 — afford sufficiently cogent evidence (even if such documents are viewed, in strictly legal terms, as partisan statements) to cast doubt on the Commission's assumption as to capacity, namely 355000 tonnes per month, and that they thereby oblige the Commission to investigate once more the question of capacity. Above all, it is a misconception that the reports by the Centre for Metallurgical Research and Kawasaki constituted evidence merely of abstract technical capacity and thus did not allow conclusions to be drawn about the Commission's sole criterion of maximum possible output within the meaning of Questionnaire No 2/61. Thus, the said joint report explicitly states that consideration was given to the supply of semi-finished products, the demand structure for 1980 (car industry and tube manufacturers) and to the plant installed upstream or downstream of the rolling-mill; moreover, Kawasaki's special report took account of five different sets of working conditions in the applicant's undertaking and, there as well, regard was had to the production programme at that time. According to the last-mentioned report, upon which the applicant mainly relies, it is possible for the No II rolling-mill to turn out, depending on working conditions (composition of the product and nature of the primary material), between 427000 and 487000 tonnes per month. The “Conclusions” in the joint report state that, assuming a furnace throughput of 506 tonnes per hour, output may be raised to 5844000 tonnes per annum, that is, 487000 tonnes per month. To judge by the report as a whole the figures are to be treated, not as a mere forecast, but as an existing and present possibility. The reference to the Japanese standard is unassailable, because the applicant's rolling-mill was built to a Japanese design. The applicant further made clear during the oral procedure that the expert opinion in question shows that, proceeding on the basis of the specific production conditions in the first quarter of 1981 and allowing a suitable deduction for high-grade steels, a monthly output of 430000 tonnes may still be regarded as realistic. Although, on the other hand, it is indisputable that the joint report by the Centre for Metallurgical Research and Kawasaki speaks only of a maximum possible annual output of 4050000 tonnes (or 337500 tonnes per month), and mentions the possibility of raising this figure, it must not be overlooked that the basic assumption was that the walking-beam furnaces, which are obviously of crucial importance to the output capacity of the rolling-mill, had an hourly output of 405 tonnes, guaranteed by the supplier of the furnaces as a minimum figure. Now, on the other hand, Jeschar's expert opinion, which was drafted following output tests conducted in December 1981 and January 1982 with the collaboration of the supplier and making allowance for marginal factors to which long-term operation is subject, furnishes evidence that the walking-beam furnaces, operated under a variety of working conditions, actually yielded outputs far exceeding 500 tonnes per hour. The opinion states that it may be expected that each of the two furnaces could certainly produce 600 tonnes per hour over a lengthy period. The supplier of the furnaces also confirms in a letter of 15 February 1982 that, following trials in which the furnaces were run at normal settings and allowance was made for a variety of circumstances affecting production, outputs sometimes going beyond 600 tonnes per hour were recorded. At all events, the opinion claims, the assumption must be made that the furnaces are capable of a sustained output of 570 tonnes per hour. That undoubtedly lends permanent weight to the Kawasaki report, and the Commission cannot confront it merely with a reference, which was not made until the oral procedure and was therefore certainly out of time, to a letter from the Director of the Centre for Metallurgical Research dated October 1982, alleging that during a recent visit to Japan it had been possible to establish that Japanese undertakings using furnaces of approximately the same construction utilized them only at the rate of 300 tonnes per hour. (c) If such considerations justify the conclusion that the notification issued by the Commission in the context of Article 14 of Decision 2794/80 is also erroneous because the Commission failed, in the face of serious evidence, to verify the capacity of the applicant's No II rolling-mill and it is therefore not certain whether the applicant's rate of utilization in the first quarter of 1981 was not, after all, more than 10% below the Community average, there is no further need to investigate the other written claim (to which the applicant moreover did not return in the oral procedure), namely that the capacity of the No I rolling-mill was ignored. If such investigation is nevertheless undertaken, no criticism is really warranted hi that regard, because obviously any consideration of the utilization of an undertaking, even in connection with Article 14, can only deal with capacities the exploitation of which is, in normal circumstances, to be expected within a foreseeable period. That must surely rule out the applicant's No I rolling-mill, since it was expressly stated that the mill was closed down in 1974 because its functions had been taken over by the new No II mill.