Joined Cases T-50/06 RENV, T-56/06 RENV, T-60/06 RENV, T-62/06 RENV and T-69/06 RENV

Ireland and Others

v

European Commission

‛State aid — Directive 92/81/EEC — Excise duty on mineral oils — Mineral oils used as fuel for alumina production — Exemption from excise duty — Whether the exemption complies with a Council decision of authorisation under Article 8(4) of Directive 92/81 — Presumption of legality attaching to European Union measures — Legal certainty — Sound administration’

Summary of the Judgment

The principle of legal certainty aims to ensure that situations and legal relationships governed by European Union law remain foreseeable. To that end, it is essential that the European Union institutions observe the principle that they may not alter measures which they have adopted and which affect the legal and factual situation of persons, so that they may amend such acts only in accordance with the rules on competence and procedure. However, breach of the principle of legal certainty cannot effectively be pleaded if the person whose legal and substantive position was affected by the decision in question did not observe the conditions laid down in that decision. Respect for the principle of legal certainty also requires that the institutions of the European Union must, as a matter of principle, avoid inconsistencies that might arise in the implementation of the various provisions of European Union law. This is all the more necessary when those provisions pursue the same objective, such as undistorted competition in the common market. (see para. 62)

The rules governing the harmonisation of domestic fiscal legislation, including the rules on excise duties, laid down in Article 93 EC and in Directive 92/81 on the harmonisation of the structures of excise duties on mineral oils, and the rules on State aid set out in Articles 87 EC to 89 EC pursue the same objective, namely to promote the proper functioning of the internal market by combating, especially, distortion of competition. In the light of their common objective, in order for those different rules to be implemented consistently, the notion of distortion of competition must be regarded as having the same scope and the same meaning with regard to both the harmonisation of domestic fiscal legislation and State aid. Moreover, the rules governing the harmonisation of domestic fiscal legislation, including the rules on excise duties, laid down in Article 93 EC and in Directive 92/81 expressly confer on the European Union institutions — that is to say, the Commission, which submits a proposal and the Council, which enacts a measure — the responsibility for assessing whether competition may be distorted. The purpose of this is to decide whether or not to authorise a Member State to apply, or continue to apply, an exemption from the harmonised excise duty under Article 8(4) of Directive 92/81, or whether there may be unfair competition or distortion of the operation of the internal market justifying a review of an authorisation already granted under that provision, as provided for in Article 8(5) of Directive 92/81. If there is a negative assessment, the Commission must propose to the Council that it should not authorise the exemption sought or, where appropriate, amend or abolish the authorisation for exemption already granted. If the Council arrives at a different assessment, the Commission may have recourse to its powers under Article 230 EC to bring an action before the European Union courts for annulment of the Council’s decision to authorise an exemption or to maintain an authorisation for exemption already granted so that those courts may review whether, from an objective point of view, there is no distortion of competition, unfair competition or distortion of the operation of the internal market as a result of such exemption. What the Commission is not entitled to do, however, as long as the authorisation granted by the Council remains in force, is to decide that the exemptions granted by the Member States constitute measures which must be notified to it for the purpose of monitoring State aid, since the very fact that the Council has granted its authorisation means that it has ruled out any distortion of competition and, in the absence of any such distortion, there can be no aid that it prohibited by the Treaty. (see paras 72, 84-110)