TO A MANUFACTURING TAX OF LIT 60 000 PER HECTOLITRE OF PURE ALCOHOL . NUMEROUS REDUCTIONS ARE PROVIDED FOR BY LAW , PARTICULARLY IN THE CASE OF POTABLE SPIRITS DISTILLED FROM WINE AND FROM MARC WHICH ARE EXEMPT FROM THE STATE TAX AND SUBJECT TO A MANUFACTURING TAX OF LIT 53 000 PER HECTOLITRE IN THE CASE OF POTABLE SPIRITS DISTILLED FROM WINE AND OF LIT 50 000 PER HECTOLITRE IN THE CASE OF POTABLE SPIRITS DISTILLED FROM MARC .
ON THE OTHER HAND , POTABLE SPIRITS DISTILLED FROM WINE AND FROM MARC AND IMPORTED INTO ITALY ARE SUBJECT TO STATE TAXES AT THE RATE OF LIT 60 000 PER HECTOLITRE OF PURE ALCOHOL AND TO A MANUFACTURING TAX OF LIT 60 000 PER HECTOLITRE OF PURE ALCOHOL . . .
AS EARLY AS NOVEMBER 1965 THE COMMISSION DREW THE ATTENTION OF THE ITALIAN GOVERNMENT TO THE DISCRIMINATORY NATURE OF THIS SYSTEM .
SUBSEQUENTLY , BY LETTER OF 8 MAY 1968 , THE COMMISSION INITIATED , FOR INFRINGEMENT OF ARTICLE 95 OF THE EEC TREATY , THE PROCEDURE PROVIDED FOR IN ARTICLE 169 OF THE TREATY . IN ITS REPLY , GIVEN BY LETTER OF 23 JULY 1968 FROM THE ITALIAN PERMANENT REPRESENTATION , THE ITALIAN GOVERNMENT INFORMED THE COMMISSION THAT IT HAD NO INTENTION OF ABOLISHING THE DIFFERENTIAL TAXES IN QUESTION UNTIL THE NATIONAL MONOPOLIES EXISTING IN GERMANY AND IN FRANCE WERE MODIFIED AND A COMMON AGRICULTURAL POLICY WAS ESTABLISHED IN THIS SECTOR . . .
THE ARGUMENTS ADDUCED ARE NOT CAPABLE , EXCEPT IN ONE RESPECT , OF CALLING IN QUESTION THE GROUNDS ON WHICH THE VIEWS EXPRESSED BY THE COMMISSION IN ITS LETTER OF 8 MAY 1968 ARE BASED . ABOVE ALL , IT MUST BE POINTED OUT THAT IN NO CIRCUMSTANCES MAY THE MEMBER STATES RELY ON SIMILAR INFRINGEMENTS BY OTHER MEMBER STATES IN ORDER TO ESCAPE THEIR OWN OBLIGATIONS UNDER THE PROVISIONS OF THE TREATY .
AS FOR THE ARGUMENT THAT ITALY IMPLEMENTS ITS AGRICULTURAL POLICY ON SPIRITS BY RECOURSE TO TAXATION AND THAT IT WILL NOT BE ABLE TO ALTER ITS POSITION EXCEPT IN THE CONTEXT OF THE IMPLEMENTATION OF A COMMON POLICY ON SPIRITS , THE COMMISSION HAS ALREADY ACKNOWLEDGED , IN ITS ABOVE-MENTIONED LETTER OF 8 MAY 1968 , THAT ITALY WAS IN FACT ENTITLED TO IMPOSE THE TAX AS AN INSTRUMENT OF ITS AGRICULTURAL POLICY IN THIS SECTOR AND MAINTAIN PROVISIONALLY , WITHIN THAT FRAMEWORK , DIFFERENTIAL TAXATION AT THE MAXIMUM RATE OF LIT 60 000 PER HECTOLITRE OF PURE ALCOHOL RESULTING FROM THE CHARGING OF THE STATE TAX . RECOURSE TO SUCH TAXATION ENABLES SPIRITS TO BE SOLD AT A FAIRLY UNIFORM PRICE , REGARDLESS OF THEIR COST PRICE . ' '
9 THE COMMISSION PROCEEDED TO CONCLUDE IN ITS REASONED OPINION THAT , AS REGARDS VARIOUS ASPECTS OF THE TAX SYSTEM OTHER THAN THE STATE TAX , THERE WAS A FAILURE BY THE ITALIAN REPUBLIC TO FULFIL ITS OBLIGATIONS UNDER THE TREATY . IT SHOULD BE NOTED THAT THIS