Judgment of the Court of 9 June 1992. - Simba SpA and others v Ministero delle finanze. - References for a preliminary ruling: Pretura di Savona, Pretura di La Spezia et Pretura di Salerno - Italy. - National tax on bananas - Levied only on products imported directly from non-member States - Possible incompatibility with Community law. - Joined cases C-228/90 to C-234/90, C-339/90 and C-353/90.



European Court reports 1992 Page I-03713



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

++++

1. Tax provisions ° Internal taxation ° Duty such as the Italian national tax on consumption of fresh bananas ° Classification as internal taxation ° Duty limited, following a judgment of the Court, to products imported directly from non-member States ° Consequences ° Classification not changed but removed from the sphere of application of Article 95 of the Treaty

(EEC Treaty, Arts 9, 12 and 95)

2. Common commercial policy ° Levying by a Member State of a protectionist internal tax on products imported directly from non-member States ° Permissible under the rules of the Treaty but must be examined in the light of international agreements between the Community and non-member States

(EEC Treaty, Art. 113)

3. Community law ° Direct effect ° Conflict between Community law contained in agreements, conferring rights on individuals, and a national law ° Obligations and powers of national courts ° Non-application of the national law

Summary

1. A duty such as the national tax on consumption levied on fresh bananas, introduced into the Italian legal system by Law No 986/1964, as amended by Law No 873/1982, where

° it is part of a system of taxes on consumption governed by common tax rules and charged on categories of products irrespective of their origin in accordance with an objective criterion, namely the fact that the product falls into a specific category of goods;

° some of those taxes are charged on products intended for human consumption and the fact that those goods are produced at home or abroad does not seem to have a bearing on the rate, the basis of assessment or the manner in which the tax is levied; and

° the revenue from those taxes is not allocated for a specific purpose but constitutes tax revenue identical to other tax revenue and, like it, helps to finance State expenditure generally in all sectors,

must be regarded as being an integral part of a general system of internal taxation within the meaning of Article 95 of the Treaty and its compatibility with Community law must be assessed on the basis of that article rather than Articles 9 and 12 of the Treaty.

Its legal status as internal taxation is not affected by the fact that, following a judgment of the Court declaring its application of the duty to fresh bananas imported from other Member States incompatible with Article 95, it is levied solely on bananas imported directly from non-member States. That fact is the result of the judgment of the Court and cannot be regarded as the criterion determining the concept of a charge having an effect equivalent to a customs duty on imports. Nor can the tax be considered in isolation from the system of internal taxation of which it forms part.

Since Article 95 is applicable only to products imported from other Member States, a duty such as the tax at issue is not covered by that provision inasmuch as it is applicable to imports of fresh bananas coming directly from non-member States.

2. A duty such as the national tax on consumption levied on fresh bananas, introduced into the Italian legal system by Law No 986/1964, as amended by Law No 873/1982, in so far as it is applicable to fresh bananas imported directly from non-member States and even though its protectionist nature with regard to home-produced table fruit is established, is not incompatible with the spirit and the scheme of Community law as they emerge from the provisions of the EEC Treaty relating to the implementation of the common commercial policy, without prejudice, however, to the application of the provisions of any international agreements that may be in force between the Community and the non-member States from which the bananas come.

It is a matter for the national courts, after seeking, if necessary, a preliminary ruling from the Court on the interpretation of the provisions of such agreements, to determine whether they are of a nature effectively to prohibit the levy of the duty in question.

3. In so far as a national law introducing a duty such as the national tax on consumption levied on fresh bananas, introduced into the Italian legal system by Law No 986/1964, as amended by Law No 873/1982, is considered to be incompatible with provisions of Community law contained in agreements, conferring rights on individuals, that law must be disregarded by national courts since, in such a case, the individuals concerned are not required to pay the duty in question.

Parties

In Joined Cases C-228/90 to C-234/90, C-339/90 and C-353/90,

REFERENCES to the Court under Article 177 of the EEC Treaty by the Pretore di Savona, the Pretore di La Spezia and the Vice-Pretore di Salerno for a preliminary ruling in the proceedings pending before that court between

Simba SpA (C-228/90 and C-234/90),

Comafrica SpA (C-229/90, C-232/90 and C-339/90),

Camar Srl (C-233/90),

Co-Frutta SpA (C-231/90),

Chiquita Italia SpA (C-233/90 and C-353/90)

and

Ministero delle Finanze (Dogane di Savona e della Spezia),

on the interpretation of Articles 9, 95, 113 and 115 of the EEC Treaty and of Regulation (EEC) No 950/68 of the Council of 28 June 1968 on the Common Customs Tariff (OJ, English Special Edition 1968 (I), p. 275), with regard to the consumption tax applied in Italy on fresh bananas imported directly from non-member countries/TCDA/JUDGMENT OF 9. 6. 1992 ° JOINED CASES C-228/90 TO C-234/90, C-339/90 AND C-353/90

,

THE COURT,

composed of: F.A. Schockweiler, President of Chamber, acting as President, F. Grévisse and P.J.G. Kapteyn (Presidents of Chambers), G.F. Mancini, C.N. Kakouris, J.C. Moitinho de Almeida, M. Diez de Velasco, M. Zuleeg and J.L. Murray, Judges,

Advocate General: C.O. Lenz,

Registrar: H.A. Ruehl, Principal Administrator,

after considering the written observations submitted on behalf of:

° Simba SpA, by Giorgio Finocchio, of the Savona Bar, assisted by Bruno Telchini, of the Bolzano Bar,

° Comafrica SpA, by Giuseppe Pericu and Mario Alberto Quaglia, of the Genoa Bar, Giorgio Finocchio, of the Savona Bar, and by Marco Giannini, of the La Spezia Bar,

° Camar Srl, by Mario Porzio, of the Naples Bar, and Giorgio Finocchio, of the Savona Bar,

° Co-Frutta SpA, by Wilma Viscardini Dona of the Padua Bar,

° Chiquita Italia SpA, by Guido Greco and Luigi R. Bianchi, of the Milan Bar, Giorgio Finocchio, of the Savona Bar, and Gustavo and Fausta De Dominicis, of the Salerno Bar,

° the Government of the Italian Republic, by Professor Luigi Ferrari Bravo, Head of the Department for Contentious Diplomatic Affairs at the Italian Ministry for Foreign Affairs, acting as Agent, assisted by Sergio Laporta, Avvocato dello Stato, and

° the Commission of the European Communities, by Enrico Traversa, of its Legal Service, acting as Agent,

having regard to the Report for the Hearing,

after hearing the oral observations of Simba SpA, Comafrica SpA, Co-Frutta SpA and Chiquita Italia SpA, the Italian Government and the Commission at the hearing on 7 November 1991,

after hearing the Opinion of the Advocate General at the sitting on 13 December 1991,

gives the following

Judgment

Grounds

1 By nine orders of 28 June, 6 and 11 July, 5 and 12 November 1990, which were received at the Court on 27 July, and 13 and 28 November 1990, the Pretore di Savona, the Pretore di La Spezia and the Vice-Pretore di Salerno referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty several questions on the interpretation of Articles 9, 95, 113 and 115 of the Treaty and of Regulation (EEC) No 950/68 of the Council of 28 June 1968 on the Common Customs Tariff (OJ, English Special Edition 1968 (I), p. 275), with a view to determining the compatibility with those provisions of a national consumption tax ("imposta erariale di consumo") on fresh bananas in so far as that tax is applied to fresh bananas imported directly from non-member countries.

2 Those questions arose in proceedings between several importers and the Italian Finance Ministry. The importers considered that Community law precluded the levying of the tax in question on consignments of fresh bananas which were in the course of being imported directly from non-member countries either within the dollar area or parties to the Third ACP-EEC Convention signed at Lomé on 8 December 1984 (OJ 1986 L 86, p. 3).

3 On application by the importing companies, the national courts ordered the authorities, as a provisional measure, to grant authorization for the importation of the consignments of bananas without requiring payment of the tax. Subsequently, the national courts considered that the disputes raised questions concerning the interpretation of Community law and therefore stayed proceedings pending a preliminary ruling by the Court of Justice on the following questions:

In Cases C-228/90, C-229/90, C-230/90, C-231/90, C-232/90, C-233/90 and C-234/90

"1. Is the charge on the consumption of fresh bananas introduced into the Italian legal system by Law No 986/1964, as amended by Law No 873/1982, incompatible with the spirit and the scheme of Community law as embodied in Article 9 of the EEC Treaty, which provides for the adoption of a common customs tariff as regards non-member countries, and in Article 113 of the Treaty, which provides for the implementation of a common commercial policy by the Member States, given that the abovementioned charge, which is no longer applicable to products in free circulation in the Member States following the judgments given by the Court of Justice in Cases 184/85 and 193/85, remains applicable solely to products originating directly in non-member countries, thus amounting to a protectionist measure which was not adopted in accordance with the conditions provided for in Article 115 of the EEC Treaty?

2. If so, must the law introducing that charge be set aside by the national court, with the result that there is no obligation on individuals to pay the relevant charge?

3. In the alternative, should Law No 873/1982, whereby Italy raised the charge in question from LIT 70 to the current amount of LIT 525 in breach of the prohibition on Member States' altering the level of protection determined by the Common Customs Tariff, as laid down by the Court of Justice in its judgment in Joined Cases 37 and 38/73, be alone declared incompatible with the aforementioned provisions of the EEC Treaty and with Regulation No 950/68 of the Council implementing the Common Customs Tariff as from 1 July 1968?"

Case C-339/90

"1. Is the charge on the consumption of fresh bananas introduced into the Italian legal system by Law No 986/1964, as amended by Law No 873/1982, contrary to Article 95 of the EEC Treaty, even though it is applied to bananas imported directly from non-member countries, or is it in any event incompatible with the spirit and the scheme of Community law as embodied in Article 9 of the EEC Treaty, which provides for the adoption of a common customs tariff as regards non-member countries, and in Article 113 of the Treaty, which provides for the implementation of a common commercial policy by the Member States, given that the abovementioned charge ° which is no longer applicable to products in free circulation in the Member States following the judgments given by the Court of Justice in Cases 184/85 and 193/85 ° remains applicable solely to products originating directly in non-member countries, thus amounting to a protectionist measure which was not adopted in accordance with the conditions provided for in Article 115 of the EEC Treaty?

2. In the alternative, should Law No 873/1982, whereby Italy raised the charge in question from LIT 70 to the current amount of LIT 525 in breach of the prohibition on Member States' altering the level of protection determined by the Common Customs Tariff, as laid down by the Court of Justice in its judgment in Joined Cases 37 and 38/73, be alone declared incompatible with the aforementioned provisions of the EEC Treaty and with Regulation No 950/68 of the Council implementing the Common Customs Tariff as from 1 July 1968?"

Case C-353/90

"1. Is the charge on the consumption of fresh bananas introduced into the Italian legal system by Law No 968/64, as amended by Law No 873/82, incompatible with the spirit and the scheme of Community law as embodied in Article 9 of the EEC Treaty, which provides for the adoption of a common customs tariff as regards non-member countries, and in Article 113 of the Treaty, which provides for the implementation of a common commercial policy by the Member States, given that the abovementioned charge ° in the light of the judgments given by the Court of Justice in Cases 184/85 and 193/85 ° remains applicable solely to products originating directly in non-member countries, thus amounting to a protectionist measure which was not adopted in accordance with the conditions provided for in Article 115 of the EEC Treaty?

2. If so, must the law introducing that charge be set aside by the national court, with the result that there is no obligation on individuals to pay the relevant charge?

3. In the alternative, should Law No 873/82, whereby Italy raised the charge in question from LIT 70 to the current amount of LIT 525 in breach of the prohibition on Member States altering the level of protection determined by the Common Customs Tariff, as laid down by the Court of Justice in its judgment in Joined Cases 37 and 38/73, be alone declared incompatible with the aforementioned provisions of the EEC Treaty and with Regulation No 950/68 of the Council implementing the Common Customs Tariff as from 1 July 1968?"

4 By order of 20 September 1990 the Court joined Cases C-228/90 to C-234/90 for the purposes of the written procedure, the oral procedure and the judgment.

5 By order of 16 September 1991 the Court joined Cases C-228/90 to C-234/90 and Cases C-339/90 and C-353/90 for the purposes of the written procedure, the oral procedure and the judgment.

6 Reference is made to the Report for the Hearing for a fuller account of the facts of the case in the main proceedings, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

The legal nature of a duty such as the national tax on consumption

7 It should be recalled, first, that the Court has already held in Case 193/85 Co-Frutta v Amministrazione delle Finanze dello Stato [1987] ECR 2085, paragraph 13, that a charge such as the national tax on consumption must be regarded as being an integral part of a general system of internal dues within the meaning of Article 95 of the Treaty and its compatibility with Community law must be assessed on the basis of that article rather than Articles 9 and 12 of the Treaty.

8 The Court noted in particular that charges such as the 19 taxes on consumption in force in Italy were governed by common tax rules and were charged on categories of products irrespective of their origin in accordance with an objective criterion, namely the fact that the product falls into a specific category of goods. The Court pointed out that some of those taxes were charged on products intended for human consumption, including the tax on the consumption of bananas, and the fact that those goods were produced at home or abroad did not seem to have a bearing on the rate, the basis of assessment or the manner in which the tax was levied. Finally the Court stated that the revenue from those taxes was not earmarked for a specific purpose and that it constituted tax revenue identical to other tax revenue and, like it, helped to finance State expenditure generally in all sectors (see Case 193/85, paragraph 12).

9 Likewise, the Court held in Case 184/85 (Commission v Italy [1987] ECR 2013, paragraph 15) that, by imposing and maintaining in force a tax on the consumption of fresh bananas which is applicable to bananas from other Member States, the Italian Republic had failed to fulfil its obligations under the second paragraph of Article 95 of the Treaty.

10 It was argued during the course of the present proceedings that a duty such as the national tax on consumption no longer constituted internal taxation but a charge having an effect equivalent to a customs duty on the ground that, since the judgments in Cases 184/85 and 193/85, it could no longer form part of a general system of internal dues in so far as it now applied only to bananas imported directly from non-member countries and was therefore no longer levied in accordance with objective criteria irrespective, in particular, of the origin of the products.

11 That argument cannot be accepted. The Court has consistently held (see in particular Case 148/77 Hansen v Hauptzollamt Flensburg [1978] ECR 1787, paragraph 22) that one and the same charge to tax cannot in principle be classified both as internal taxation within the meaning of Article 95 of the Treaty and as a charge having an effect equivalent to a customs duty within the meaning of Article 9.

12 In the present case, the fact that a duty such as the national tax on consumption has subsequently been levied solely on bananas imported directly from non-member countries is the result of the judgments in Cases 184/84 and 192/85, cited above, and cannot be regarded as the criterion determining the concept of a charge having an effect equivalent to a customs duty on imports. Nor may such a charge be considered in isolation from the system of internal taxation of which it forms part.

The question concerning the interpretation of Article 95 of the Treaty raised in Case C-339/90

13 Since a duty such as the national tax on consumption must be regarded as internal taxation caught by Article 95, the question whether such a charge is contrary to that provision in so far as it is applicable to fresh bananas imported directly from non-member countries must be answered first.

14 According to the case-law of the Court (see the judgment in Case 148/77, cited above), Article 95 is applicable only to products imported from other Member States. It follows that that provision does not apply to products imported directly from non-member States.

15 The answer should therefore be that a duty such as the national consumption tax introduced into the Italian legal system by Law No 986/1964, as amended by Law No 873/1982, is not covered by Article 95 of the EEC Treaty inasmuch as such a duty is applicable to imports of fresh bananas coming directly from non-member countries.

The questions concerning the interpretation of Article 113 of the Treaty

16 The aim of these questions is to establish whether a duty such as the tax on consumption is incompatible with the spirit and the scheme of Community law as embodied in Article 113 of the Treaty, which provides for the implementation of a common commercial policy by the Member States, given in particular the protectionist nature of the duty at issue.

17 It is apparent that the Treaty provisions concerning the common commercial policy, and in particular Article 113, do not of themselves prohibit a Member State from levying on products imported directly from a non-member country a duty such as the national tax on consumption.

18 As the Court has already established (see Case 148/77, cited above) for trade with non-member countries, and as far as internal taxation is concerned, the Treaty itself does not include any rule similar to that laid down in Article 95.

19 However, while the Treaty does not itself include provisions which prohibit possible discrimination in the application of internal taxes to products imported directly from non-member countries, account must be taken, in the present cases, of the international agreements in force between the Community and the non-member countries of origin of the consignments of bananas, which may contain such clauses and thus influence the outcome of the disputes in the main proceedings (see Case 148/77).

20 It should be noted in that connection that, under Article 139(2) of the Third ACP-EEC Convention, the Community and its Member States undertook, under the General Trade Arrangements, not to use protectionist measures against products imported from ACP States.

21 The Court expressly emphasized in its judgments in Cases 184/85 and 193/85 the protectionist nature of a duty such as the national tax on consumption with regard to the home-produced table fruit of the Member State in question.

22 It is a matter for the national courts, after seeking, if necessary, a preliminary ruling from the Court on the interpretation of the provisions of the international agreements to determine whether those provisions are of a nature effectively to prohibit a Member State from levying a duty such as the national tax on consumption on consignments of fresh bananas imported directly from the non-member countries concerned.

23 The answer should therefore be that a duty such as the national tax on consumption introduced into the Italian legal system by Law No 986/1964, as amended by Law No 873/1982, in so far as it is applicable to fresh bananas imported directly from non-member countries, is not incompatible with the spirit and the scheme of Community law as they emerge from the provisions of the EEC Treaty relating to the implementation of the common commercial policy, without prejudice, however, to the application of the provisions of any international agreements that may be in force between the Community and the non-member countries from which the bananas at issue in the main proceedings come.

The questions concerning the interpretation of Article 9 of the Treaty and of Regulation No 950/68

24 These questions seek to ascertain whether Article 9 of the Treaty, which provides for the adoption of a common customs tariff with regard to non-member countries, and Regulation No 950/68 on the Common Customs Tariff preclude the levy of a duty such as the national tax on the consumption of bananas imported directly from non-member countries, in view, in particular, of the progressive increases to which the charge at issue has been subjected since the entry into force of the Common Customs Tariff.

25 Since one and the same charge to tax cannot in principle be classified both as internal taxation within the meaning of Article 95 of the Treaty and as a charge having an effect equivalent to a customs duty within the meaning of Article 9, neither Article 9 nor Regulation No 950/68, as subsequently amended, are applicable to a duty such as the national tax on consumption and there is therefore no need to reply to the questions concerning their interpretation.

The questions concerning the possible inapplicability of the national legislation

26 These questions seek to ascertain whether, in so far as a national law requiring the payment of a duty such as the national tax on consumption is incompatible with Community law, national courts must disregard that national law since the individuals concerned are not required to pay the duty in question.

27 The Court has consistently held (Case 106/77 Amministrazione delle Finanze dello Stato v Simmenthal [1978] ECR 629, paragraph 21) that every national court must apply Community law in its entirety and protect rights which the latter confers on individuals and must accordingly set aside any provision of national law which may conflict with it.

28 It necessarily follows that, where national courts consider a national law introducing a duty such as the national tax on consumption to be incompatible with provisions of Community law contained in agreements, conferring rights on individuals, the individuals concerned are not required to pay such a duty.

29 The answer should therefore be that, in so far as a national law introducing a duty such as the national tax on consumption is considered to be incompatible with provisions of Community law contained in agreements, conferring rights on individuals, that law must be disregarded by national courts since, in such a case, the individuals concerned are not required to pay the duty in question.

Decision on costs

Costs

30 The costs incurred by the Italian Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national courts, the decision on costs is a matter for those courts.

Operative part

On those grounds,

THE COURT,

in answer to the questions referred to it by the Pretore di Savona, the Pretore di La Spezia and the Vice-Pretore di Salerno by orders of 28 June, 6 and 11 July, and 5 and 12 November 1990, hereby rules:

1. A duty such as the national consumption tax introduced into the Italian legal system by Law No 986/1964, as amended by Law No 873/1982, is not covered by Article 95 of the EEC Treaty inasmuch as such a duty is applicable to imports of fresh bananas coming directly from non-member countries.

2. In so far as it is applicable to imports of fresh bananas coming directly from non-member countries, a duty such as the national consumption tax is not incompatible with the spirit and the scheme of Community law as they emerge from the provisions of the EEC Treaty relating to the implementation of the common commercial policy, without prejudice, however, to the application of the provisions of any international agreements that may be in force between the Community and the non-member countries from which the bananas at issue in the main proceedings come.

3. In so far as a national law introducing a duty such as the consumption tax is considered to be incompatible with provisions of Community law contained in agreements, conferring rights on individuals, that law must be disregarded by national courts since, in such a case, the individuals in question are not required to pay the duty at issue.