BASED ON THE ONE HAND ON THE CONCLUSION OF REVOCABLE DELIVERY CONTRACTS BETWEEN PRODUCERS AND DISTILLERS , AND ON THE OTHER HAND THE FIXING OF A MINIMUM BUYING-IN PRICE FOR TABLE WINES WHICH WAS IN EXCESS OF THE MARKET PRICE AND WHICH DISTILLERS WERE REQUIRED TO PAY TO PRODUCERS . THE DIFFERENCE BETWEEN THE COST OF THE ALCOHOL THEREBY PRODUCED AND THE SELLING PRICE OF THE SAME ALCOHOL UNDER NORMAL MARKETING CONDITIONS WAS MADE UP BY AN AID PAID BY THE INTERVENTION AGENCY AND CHARGEABLE TO THE GUARANTEE SECTION OF THE FUND . THE AID WAS FIXED AT A LEVEL WHICH MADE IT POSSIBLE TO MARKET THE PRODUCTS OF DISTILLATION .
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
THE PRINCIPAL GROUND : THE ALLEGED ADOPTION BY ITALY OF A FISCAL MEASURE AMOUNTING TO AN INDIRECT AID IN ADDITION TO THE COMMUNITY AID AND CAPABLE OF AFFECTING THE APPLICATION OF COMMUNITY AID FOR DISTILLATION
7 IT IS COMMON GROUND THAT THREE DAYS AFTER THE PUBLICATION OF REGULATION NO 567/76 ITALY ADOPTED DECRETO-LEGGE ( DECREE-LAW ) NO 46 OF 18 MARCH 1976 CONCERNING URGENT FISCAL MEASURES ( SUBSEQUENTLY BECOMING LEGGE ( LAW ) NO 243 OF 10 MAY 1976 ), WHICH PROVIDED , INTER ALIA , FOR THE IMPOSITION OF AN INCREASED DUTY ON ALCOHOL MADE FROM MOLASSES . THE EFFECT OF THAT FISCAL MEASURE WAS TO INVERT THE RELATIONSHIP BETWEEN MOLASSES-BASED ALCOHOL AND WINE-BASED ALCOHOL WITH THE PRICE OF THE FORMER RISING FROM LIT 143 000 PER HECTOLITRE TO LIT 188 000 PER HECTOLITRE AND THE PRICE OF THE LATTER RISING FROM LIT 147 000 PER HECTOLITRE TO LIT 185 000 PER HECTOLITRE .
8 THE ITALIAN GOVERNMENT ' S MAIN CONTENTION IS THAT THE FISCAL MEASURE IN QUESTION FALLS WITHIN ITS SOLE COMPETENCE AND THAT THE ESSENTIAL PURPOSE OF THAT MEASURE WAS TO INCREASE INCOME FROM TAXATION AND , IN ORDER TO TAKE ACCOUNT OF THE EFFECTS OF INFLATION , MERELY TO BRING THE TAX ON MOLASSES-BASED ALCOHOL , WHICH HAD REMAINED UNCHANGED SINCE 1955 , UP TO DATE . IT ALSO CONTENDS THAT