CELEX: 61973CC0119
Language: en
Date: 1973-11-07 00:00:00
Title: Joined opinion of Mr Advocate General Warner delivered on 7 November 1973. # Deutsche Getreide- und Futtermittel-Handelsgesellschaft v Einfuhr- und Vorratsstelle für Getreide und Futtermittel. # Reference for a preliminary ruling: Hessisches Finanzgericht - Germany. # Turnover equalization tax. # Case 119-73. # E. Kampffmeyer v Einfuhr- und Vorratsstelle für Getreide und Futtermittel. # Reference for a preliminary ruling: Hessisches Finanzgericht - Germany. # Turnover equalization tax. # Case 124-73. # Neufeld & Co. v Hauptzollamt Hamburg-Waltershof. # Reference for a preliminary ruling: Finanzgericht Hamburg - Germany. # Turnover equalization tax. # Case 125-73. # Friedhelm Busch v Hauptzollamt Hamburg-Ericus. # Reference for a preliminary ruling: Finanzgericht Hamburg - Germany. # Turnover equalization tax. # Case 126-73.

OPINION OF MR ADVOCATE-GENERAL WARNER
      DELIVERED ON 7 NOVEMBER 1973
      
         My Lords,
      Your Lordships will remember that in 1962 the Council adopted a series of Regulations having as their object the gradual establishment in the then Member States of a common organization of the markets for certain agricultural products, with a view to the eventual creation of a single Community market for each of those products. In the present four cases (Cases 119, 124, 125 and 126/73) the Court is concerned with two of those Regulations, namely No 19 of 4th April 1962, which related to cereals, and No 22 of the same date, which related to poultry meat. More particularly it is concerned with the provisions of those Regulations which instituted a system of ‘levies’ in place of the divers measures theretofore taken by the Member States individually to protect their respective agricultures.
      Under that system of levies each Member State was enabled to continue to protect its own agriculture against imports both from other Member States and from third countries, though to a lesser extent in the case of the former than in the case of the latter. In 1967 Regulations No 19 and No 22 were superseded by, respectively, Regulation No 120/67/EEC of the Council and Regulation No 123/67/EEC of the Council, which established the common organization of the Community markets in cereals and in poultry meat, involving the removal of all protective barriers as between Member States. These four cases thus belong to a transitional period which is long since past. That is not to say that the questions they raise are wholly irrelevant to the interpretation of the Regulations now in force.
      Of these four cases, two (119 and 124/73) come to the Court by way of references for preliminary rulings by the Hessisches Finanzgericht, the other two (125 and 126/73) by way of similar references by the Finanzgericht Hamburg. In each case the plaintiff is a German importer of agricultural products. In the first two cases the Defendant is the Einfuhr- und Vorratsstelle fur Getreide und Futtermittel, in the third it is the Hauptzollamt Hamburg-Waltershof and in the fourth the Hauptzollamt Hamburg-Ericus. In each case the plaintiff contends that it has been subjected to excessive levy on importations into the Federal Republic effected between 1962 and 1967.
      The importations in question in the first case (119/73) were from third countries (the Court is not told which) and were of two different products, namely durum wheat and maize. In relation to each of these a different question is raised. The question in relation to durum wheat (as posed by the Hessisches Finanzgericht) is whether the German turnover equalization tax should have been taken into account in calculating the levy. Your Lordships will have it in mind that, over the years, a number of cases have come before the Court about this tax. Its essential feature, for present purposes, was that, although it was charged on imports, it was not a customs duty or a charge having an effect equivalent thereto. It formed part of the internal taxation system of the Federal Republic, designed as it was to correspond in the case of imports to the turnover tax imposed on home-produced goods. The question asked by the Hessisches Finanzgericht in relation to maize is, shortly, whether its ‘threshold price’ should have been fixed at the same figure as that for barley or whether those responsible for fixing it had some (and, if so, what) discretion in the matter.
      The importations in question in the second and third cases (124 and 125/73) were of denatured tapioca flour. In Case 124/73 the Court is not told the provenance of the importations, though they probably came from a third country, since the plant from which tapioca is derived (cassava) is not grown in the Community. In Case 125/73 the provenance was Thailand. In each of these two cases the Court is in effect asked whether the turnover equalization tax should have been deducted in calculating the levy. In one of them (124/73) it is also asked whether the cost of denaturing the tapioca flour (by the addition of colouring material) should have been deducted.
      The first three cases thus turn, in the main, upon the interpretation of Regulation No 19.
      The importations in question in the fourth case (126/73) were of frozen broiler chickens from the USA so that the regulation principally in point in that case is Regulation No 22. Here again the question is whether the turnover equalization tax should have been deducted from the levy.
      My Lords, although the various regulations to which I have referred all had the same essential object, they did not set out to achieve it in precisely the same way in relation to each product. This was because the relevant market considerations, and in particular the state of supply and of demand in the Member States, were not the same in relation to each product.
      I start with Regulation No 19.
      In the case of common wheat and of barley, and also of maize and of rye in those Member States producing them in significant quantities, Articles 2 to 6 of Regulation No 19 instituted the complex system which the Court had to consider in Case 76/70 Ludwig Wünsche & Co. v Hauptzollamt Ludwigshafen/Rhein (Rec. 1971, p. 393) and more recently in Case 11/73 Getreide-Import-Gesellschaft v Einfuhr- und Vorratsstelle fur Getreide und Futtermittel (not yet reported). Under that system, Your Lordships will remember, each Member State fixed annually, within limits laid down by the Council, ‘target prices’ for each of those cereals. These were the prices that that State wished to see ruling at the stage of purchase in the wholesale market in a key area, being the area within its territory with the greatest deficit of that cereal. Each Member State then fixed, again annually, corresponding ‘threshold prices’, being the prices at which the cereal in question would have to be imported into that State for it to reach its target price in the key area. Lastly, the Commission fixed (i) in respect of imports from other Member States, ‘free-at-frontier prices’, based on the prices ruling on the most appropriate market of each exporting State, and (ii) in respect of imports from third countries, ‘c.i.f. prices’, based on world market prices. Each Member State was then entitled to charge on its imports a levy equal to the difference between the relevant f.a.f. or c.i.f. price and the relevant threshold prices, subject in the case of imports from other Member States to a discount designed to give preference to such imports over those from third countries. In order to render some of the citations that I shall make more readily intelligible, I should mention that this discount was provided for by Article 2 (1) of the Regulation.
      The questions that arose in Cases 76/70 and 11/73 related to the method to be adopted by a Member State in fixing its threshold prices for the cereals to which that system applied, the cereal in question in the first of those cases being barley and in the second common wheat. In Case 76/70 the actual question was whether the Federal Republic, in fixing its threshold prices for barley should have made an allowance for the turnover equalization tax. That was essentially a question of interpretation of Article 4 of Regulation No 19, that being the Article which laid down the principle on which threshold prices for the cereals in question should be computed. It provided so far as relevant (there being of course no authentic English text of Regulation No 19, I read the French)
      ‘En ce qui concerne le blé tendre et l'orge, ainsi que le maïs et le seigle dans les États membres ayant une production notable de ces céréales, le prix de seuil est fixé annuellement par les États membres pour un standard de qualité identique, de façon que sur le marché du centre de commercialisation de la zone la plus déficitaire le prix de vente du produit importé se situe, compte tenu du montant forfaitaire prévu à Particle 2 paragraphe 1…, au niveau du prix indicatif de base prévu à Particle 5.’
      Not surprisingly the Court interpreted this as meaning that the calculation of threshold prices from target prices involved the deduction from the latter of all costs that an importer must inevitably incur between the point of purchase by him from the foreign supplier and the point at which the target prices were applicable, i.e. the point of assumed sale by the importer on the wholesale market in the key area. Those costs would include such imposts as the German turnover equalization tax. This interpretation gave effect to the intention evinced by Article 4 when read in its context that the threshold price should be the price at which the importer would have had to buy from foreign supplier in order to be precluded, commercially, from undercutting the target price in the key area. It was reaffirmed and to some extent clarified in Case 11/73, which was about other costs.
      It is important, I think, to bear in mind that strictly, under the system instituted by Articles 2 to 6 of Regulation No 19, the relevant costs were to be deducted from the target prices in fixing the threshold prices, not from the threshold prices in calculating the levy. The calculation of the levy (under Article 2) was an automatic process. The Court did however indicate in Case 76/70 that, where a Member State had failed, in fixing threshold prices, to make an appropriate deduction, it was open to the Courts of that State to put matters right by ordering a corresponding deduction from the levy.
      This distinction becomes important when one comes to consider the provisions of Regulation No 19 that were applicable to cereals other than those to which Article 4 applied.
      As can be seen from a perusal of Regulation No 19 in the light of its preamble, the cereals to which Article 4 applied were those which the authors of the Regulation regarded as being of the greatest economic importance in the Community, and the purpose of fixing target prices for them was twofold.
      First it was to ensure, for those cereals, prices that would be predictable and stable, as well as reasonable, so as to afford to the farming community not only what was considered to be a fair standard of living but also the ability to plan their crops ahead. This result was to be achieved on the one hand by protection against imports and on the other by the system of intervention with which Your Lordships are familiar. Target prices served as the basis for the fixing both of threshold prices and of intervention prices.
      The second purpose was to achieve, by the gradual narrowing during the transitional period of the target prices for the cereals in question in the different Member States, a situation in which there would be a single target price for each of those cereals and it would thus be possible to establish a single Community market for each of them.
      The authors of the Regulation did not consider that the whole of that complex system was called for in the case of other cereals.
      Durum wheat, to take the first of them with which the Court is concerned in these cases, was scarce in the Community, whose requirements had largely to be met by imports from third countries. It could, for climatic reasons, be grown in the Community only in France and in Italy, and it was more expensive to grow than common wheat. Special provisions were therefore required for it and these were contained in Article 11 of Regulation No 19. I will not take up Your Lordships' time with a detailed analysis of this Article. Suffice it to say that it provided for target prices to be fixed only by France and by Italy, and then only for the purpose of determining intervention prices. As regards imports, Article 11, by its paragraphs (1) and (2), preserved the basic pattern of a levy equal to the difference between a threshold price and an f.a.f. or c.i.f. price, but it did not relate threshold prices to target prices. So far as the fixing of threshold prices was concerned, it provided only, by its paragraph (4):
      ‘Le prix de seuil du blé dur est fixé par les États membres, pour un standard de qualité identique, à un niveau supérieur d'au moins 5 % à celui du blé tendre.’
      So a Member State, in fixing its threshold price for durum wheat, had a discretion either to fix it at 105 % of its threshold price for common wheat or to fix it at a higher level. Manifestly, in exercising that discretion a Member State must have regard to the effect on prices ruling in its home market of the costs which an importer of durum wheat would be bound to incur, including such taxes as the German turnover equalization tax. But that is very far from saying, as the plaintiff in Case 119/73 would have this Court say, that once the threshold price had been fixed in accordance with paragraph (4) there must be deducted from it an amount corresponding to that of any such tax. Indeed, to say this would be, as the Commission and the Federal Government point out, to contradict the express terms of paragraph (4), at all events in a case where the deduction would have caused the effective threshold price to be less than 105 % of that for common wheat.
      The argument put forward on behalf of the plaintiff in that case boils down, I think, to saying that the decision of this Court in Case 76/70 established a general principle not confined to the fixing of threshold prices under Article 4 of Regulation No 19 and that, unless Article 11 (4) is to be interpreted as having also incorporated that principle, its provisions were incompatible both with Article 39 and with Articles 9 and 12 of the EEC Treaty.
      The argument based on Article 39 turns on the fact that that Article includes among the objectives of the common agricultural policy ‘(e) to ensure that supplies reach consumers at reasonable prices’. My Lords, I do not doubt that that provision bound the Member States and precluded them, when fixing threshold prices under Article 11 (4), from fixing them unreasonably high. This is one reason for saying, as I have said, that a Member State could not properly fix its threshold prices for durum wheat at more than 105 % of its threshold prices for common wheat without having regard to the costs falling on importers of durum wheat. But I can find nothing in the papers before the Court or in the submissions that were made at the hearing that leads to the conclusion that, unless the gloss for which this Plaintiff contends is put upon Article 11, durum wheat must reach the consumer at an unreasonable price.
      The argument based on Articles 9 and 12 of the Treaty (and reinforced by reference to Articles 18 and 20 of Regulation No 19 itself) starts from the fact that the threshold prices fixed under Article 11 (4) of Regulation No 19 applied as well in relation to imports from other Member States as in relation to imports from third countries. The argument, as I understand it, is that, whilst neither the levy imposed by Article 11 nor the German turnover equalization tax was, by itself, a charge having an effect equivalent to a customs duty, cumulation of the two would amount to such a charge. My Lords, to my mind, the argument only has to be stated to be rejected. Two whites cannot make a black.
      In my opinion, the correct view is that the decisions of this Court in Cases 76/70 and 11/73 were essentially decisions on the interpretation of Article 4 of Regulation No 19. They were concerned with the method of fixing threshold prices by reference to target prices for cereals to which that Article applied — and also, as a corollary, with the method of giving effect to Article 2, dealing with the calculation of the levy on such cereals, in a case where a Member State had failed to give full effect to the requirements of Article 4. In my opinion those decisions are not really germane to the interpretation of other Articles of Regulation No 19, such as Article 11 (4), which prescribed different methods of fixing threshold prices for cereals to which Article 4 did not apply.
      The question referred to the Court by the Hessisches Finanzgericht in relation to durum wheat is worded as follows:
      ‘Is Article 11 of Regulation No 19/62 of the Council of the European Economic Community (Official Journal of the European Communities 933/62) to be interpreted in such a way that in the calculation of the levy on durum wheat the turnover equalization tax payable on imports should have been taken into account, or was this not required?’
      My Lords, it seems to me that, if the Court were to answer that question simply ‘Yes’ or ‘No’, its answer would be open to two criticisms, first, that it was ambiguous and, second, that it involved applying the provisions of Article 11 rather than just interpreting them. I am therefore of the opinion that the question should be answered as follows:
      ‘Article 11 of Regulation No 19/62 of the Council of the European Economic Community is to be interpreted as having implied that a Member State, in exercising the discretion conferred on it by paragraph (4) of that Article, should treat as factors to be taken into account the estimated costs to be incurred by an importer of durum wheat, including any such taxes as the German turnover equalization tax, but that, once the threshold price had been fixed in conformity with that paragraph, no deduction for any such tax was to be made in the calculation of the levy pursuant to paragraph (1) or paragraph (2) of that Article.’
      I turn to the second question raised in Case 119/73, which relates to maize. Your Lordships will remember that Article 4 of Regulation No 19 applied to this cereal only in the Member States having a significant production of it. It is common ground that the Federal Republic was not such a State. That being so, the relevant Article of Regulation No 19 was Article 8 (1).
      This applied to all cereals other than those to which Article 4 applied and than durum wheat. It provided that, as regards such cereals
      ‘… le prix de seuil est fixé pour chaque produit de façon telle que puisse être atteint, compte tenu du montant forfaitaire prévu à l'article 2 paragraphe 1, le niveau des prix indicatifs fixes pour les céréales indigènes visées à l'article 4, à savoir:
      
               —
            
            
               pour les céréales considerées comme céréales panifiables, le niveau des prix indicatifs des céréales panifiables;
            
         
               —
            
            
               pour les autres céréales, le niveau des autres prix indicatifs;
            
         Le prix de seuil est fixé annuellement par les États membres pour un standard de qualité identique …’
      It is common ground that in the Federal Republic maize was not considered to be ‘panifiable’, so that it was the second subparagraph of Article 8 (1) that applied to it, and that the reference in that subparagraph to ‘le niveau des autres prix indicatifs’ was effectively a reference to the level of the target price for barley. It is not difficult to discern that the object of Article 8 (1) was to prevent undue competition by imported products with home-grown products, in this particular case undue competition by imported maize with barley in the market for animal feeds.
      It appears that for the year 1962/63 the Federal Republic fixed its threshold prices for maize slightly higher than its threshold prices for barley, but that for all subsequent years during the currency of Regulation No 19, it fixed the same-threshold prices for maize as for barley. The complaint of the plaintiff in Case 119/73 is as to the threshold prices for maize fixed by the Federal Republic for 1962/63.
      There is a hint in the observations of the Commission of the reason why the Federal Republic changed course as from 1963/64: it seems that as from that year there was, by means of decisions of the representatives of Member States at the Council, a move towards the harmonization of the methods adopted by the Member States for fixing threshold prices for feed grains by reference to those for barley.
      Be that as it may, the controversy between the parties in Case 119/73 is as to the scope of the discretion conferred on Member States by Article 8 (1), for neither party suggests that that Article simply required a Member State to fix the threshold prices for maize at the same figure as those for barley.
      The contention of the plaintiff is that the Article required a Member State to compute the threshold price for maize by deducting from the target price for barley the costs that an importer of maize would incur — in other words to carry out in relation to maize a calculation analogous to that required by Article 4 in relation to the cereals to which it applied, but using as the starting point of that calculation the target price for barley. This would produce for maize a threshold price differing from that for barley if, but only if, the costs estimated to fall on an importer of maize differed from those estimated to fall on an importer of barley.
      The contention of the Government of the Federal Republic is that the discretion given to Member States was wider and enabled them to take into account such factors as the relative nutritive values of the cereals in question and any special uses to which they might respectively be put by industry. The contention of the Commission goes even wider and amounts to saying that a Member State was free to fix its threshold price for maize at whatever level it thought necessary in order to ensure that imports of maize did not prevent barley from attaining its target price.
      The question is of course one of interpretation of Article 8 (1). Does it mean, as the Plaintiff would have it, that a Member State in the position of the Federal Republic was to fix its threshold price for maize at such a figure as to ensure that maize should reach the wholesale market in that State at the same price as the target price for barley? Or does it mean, as is implicit in the argument of the Federal Government and of the Commission, that such a State was to fix its threshold price for maize at such a figure as to ensure that barley should reach its target price?
      I have, after some hesitation, come to the conclusion that the latter is the correct interpretation. Not only does it fit the actual wording of Article 8 (1) better, but it makes better sense when that provision is to be applied in relation to a cereal which competes with two home grown ones. For example, assume that France was a country having a significant production of maize, so that in France Articles 4 and 5 applied to both barley and maize. Assume further that France, as it was entitled to do under Article 5, fixed different target prices for barley and for maize. What, on the Plaintiff's interpretation of Article 8 (1), was France to do when it came to apply that provision to, say, oats? Was it to make a calculation of which the starting point was the target price for barley or one of which the starting point was that for maize? On the Commission's interpretation this difficulty does not arise: France was to fix a threshold price for oats sufficient to ensure that competition from oats did not prevent either barley or maize from reaching their target prices.
      The question asked by the Hessisches Finanzgericht about maize is in the following terms:
      ‘Is Article 8 (1) of Regulation No 19/62 EEC to be interpreted in such a way that the threshold price for maize in Member States in which there is no significant production was to be fixed in such a way that it corresponded to the threshold price for barley, or was there a certain measure of discretion in respect of particular types of cereals according to their value as fodder, etc.?’
      For the reasons that I have expressed I am of the opinion that that question should be answered as follows:
      ‘Article 8 (1) of Regulation No 19/62 EEC is to be interpreted as meaning that the threshold price for maize in a Member State in which there was no significant production of that cereal was to be fixed in such a way that (due account being taken of the discount provided for by Article 2 (1) barley should be able to reach its target price in that State.’
      As I mentioned to Your Lordships, the product in question in Cases 124 and 125/73 is denatured tapioca flour. This formed part of a group of processed products identified by the combined effect of Article 1 (d) and of the Annex to Regulation No 19 which were dealt with by Article 14 of that Regulation and by a later implementing Regulation, namely Regulation No 55 of the Council of 30 June 1962. Under those provisions there were to be for those products no target prices or threshold prices. The levies on imports of them by a Member State, whether from other Member States or from third countries, were to consist of a variable component and of a fixed component. The purpose of the variable component was, in the case of products processed from basic products to which Regulation No 19 applied, to correspond to the levies on those basic products (see paragraph (1) (A) (a) of Article 14) and, in the case of other products, of which tapioca flour was one, to correspond to the levies on competing products (see paragraph (1) (A) (b) of the same Article). The purpose of the fixed component was to protect the processing industry in each Member State (see paragraph (1) (B) of Article 14).
      Among the products dealt with by Article 14 and by Regulation No 55 were those within heading No 11.06 of the common customs tariff, of which tapioca flour was one. The amounts of the variable and fixed components for these were prescribed by Article 7 of Regulation No 55. So far as material this Article provided, by reference to Article 9 of the same Regulation, that the variable component in the case of 100 kg of any of the products in question should be equal to the levy on 161 kg of maize, subject to a proviso, contained in paragraph (2) of Article 7, that, if the product had been denatured, the variable component applicable to 100 kg of it should be equal to the levy on 40 kg of barley. By paragraph (3) of Article 7 the fixed component was to be 1.70 u.a. where the product had not been denatured and nil where it had.
      It is contended on behalf of the plaintiffs in Cases 124 and 125/73 that, in the case of imports that were subject to a tax such as the German turnover equalization tax, the amount of that tax should be deducted from the levy computed in accordance with Article 7. The arguments put forward in support of that contention are substantially the same as those put forward on behalf of the plaintiff in Case 119/73 in relation to imports of durum wheat. In my opinion, my Lords, there is even less reason why they should prevail in the case of denatured tapioca flour, the provisions relating to which left no discretion of any sort to Member States, than in the case of durum wheat.
      A different conclusion was reached by the Bundesfinanzhof in two cases that it decided last year relating to importations of denatured tapioca flour (VII R 91/69 and VII R 118/69), but it appears from its judgments in those cases that the Bundesfinanzhof decided them as it did only because it felt bound to do so by the decision of this Court in Case 76/70. I hope that I shall be acquitted of any discourtesy to the Bundesfinanzhof if I do not repeat the reasons that have led me to the view that the decision of this Court in Case 76/70 is in point only where Article 4 of Regulation No 19 applies.
      I mentioned to Your Lordships that in Case 124/73 the Court is also asked by the Hessisches Finanzgericht whether the costs of denaturing the tapioca flour — to be specific the costs of adding colouring material to it — should have been deducted from the levy. The plaintiff in that case contends that they should. Its argument in support of that contention is short. It is essentially that the same reasoning applies to these costs as to the turnover equalization tax.
      My Lords, on this question I think I need say only that, even if I had thought that the plaintiff was right about the turnover equalization tax, I would still have thought it wrong about the costs of denaturing. These formed part of the costs of producing the goods to which the levy attached and as such could not conceivably, in my opinion, enter into the computation of the levy. On this, I observe, that my conclusion accords with that reached by the Bundesfinanzhof in the two cases I have mentioned, where indeed the Bundesfinanzhof followed an earlier decision of its own on the same point.
      My Lords, the questions referred to this Court by the Hessisches Finanzgericht in Case 124/73 are worded as follows
      
               ‘1.
            
            
               Is Article 14 (1) (A) (b) of Regulation No 19 of the Council of the European Economic Community of 4 April 1962 on the gradual establishment of a common organization of the markets for cereals (Official Journal of the European Communities, page 933), in conjunction with Article 7 (2) of Regulation No 55 of the Council of the European Economic Community of 30 June 1962 on the system for processed products based on cereals (Official Journal of the European Communities, page 1583), to be interpreted in such a way that, from the levy for denatured tapioca flour within heading No 11.06 of the Common Customs Tariff, the amount of the turnover equalization tax levied on imports of denatured tapioca flour and the costs of adding colouring material are to be deducted?
               If so:
            
         
               2.
            
            
               Under what provisions, in what form and in what amount would the turnover equalization tax taken into account in determining the threshold price for barley then have to be brought into the calculation, when the levy for denatured tapioca flour, under Article 7 (2) of Regulation No 55, has been calculated on the basis of the threshold price for barley?’
            
         My Lords, on the view I take, the question numbered 2 does not arise, but I have thought it right to read it because it exposes one of the difficulties to which acceptance of the plaintiff's argument on question 1 would lead.
      For the reasons I have expressed I am of the opinion that question 1 should be answered as follows:
      ‘Neither Article 14 of Regulation No 19 of the Council of the European Economic Community of 4 April 1962 nor Article 7 of Regulation No 55 of the same Council of 30 June 1962 is to be interpreted as meaning that any deduction is to be made from the levy on denatured tapioca flour either in respect of any such tax as the German turnover equalization tax or in respect of the costs of adding colouring material to such flour.’
      In Case 125/73 the question referred to the Court by the Finanzgericht Hamburg is worded thus:
      ‘Must Article 14 of Regulation No 19/62 and Article 7 of Regulation No 55/62, which are material for the calculation of the amounts of the levy for processed products (Article 1 (d) in conjunction with the Annex to Regulation No 19/62), be interpreted, having regard to the judgment of the European Court in Case 76/70 of 12 May 1971, whereby in the calculation of the threshold price for cereals under Article 4 of Regulation No 19/62 a fixed sum corresponding to the effect of the internal taxes levied on imports — such as turnover equalization tax — is to be deducted from the target price, as meaning that the amount of turnover equalization tax charged in the particular case must be deducted from the levy?’
      I am of the opinion that that question should be answered as follows:
      ‘Neither Article 14 of Regulation No 19/62 nor Article 7 of Regulation No 55/62 is to be interpreted as meaning that any deduction is to be made from the levy on denatured tapioca flour in respect of any such tax as the German turnover equalization tax.’
      I turn to the last case, Case 126/73, where, your Lordships remember, the essential question is whether, on the proper interpretation of Regulation No 22 of the Council, the levy on importations of slaughtered poultry into the Federal Republic should have been reduced by an amount corresponding to that of the turnover equalization tax.
      Regulation No 22 did not provide for the fixing of target prices or of threshold prices for slaughtered poultry.
      By Article 3 (1) it provided that, in the case of imports from one Member State into another, the levy should consist of two components. The first was designed to reflect the incidence on feeding costs of the difference between the prices of feed grains ruling in the importing State and those ruling in the exporting State. The precise method of fixing the amount of this component was prescribed by Article 3 (4). As one would expect it did not involve any computation of the kind with which Case 76/70 was concerned. The second component was to be equal to the mean of the customs duties levied by the importing State on imports from the other Member States in 1961.
      By way of proviso, Article 3 (2) allowed an alternative method of computing the levy in the case of a Member State which, at the time of the entry into force of Regulation No 22, protected its own production of poultry meat by means of quantitative restrictions or of measures having an effect equivalent thereto. This alternative method involved a comparison between the mean prices for slaughtered poultry ruling in the importing State and those ruling in the exporting State in the years 1960 and 1961. Putting it shortly (and I hope without excessive sacrifice of accuracy) the amount of the levy was to be the amount of the difference evinced by that comparison ‘modifié afin de tenir compte des frais de transports et des impositions intérieures que supportent les produits en cause’. So here was a provision requiring a computation, not identical with that with which Case 76/70 was concerned, but similar to it.
      For completeness, I ought, I think, to say that, by virtue of Article 9 of Regulation No 22, the levies on trade between Member States were to be progressively reduced over the years.
      The method of calculating the levies on imports of slaughtered poultry from third countries was laid down by Article 4 of Regulation No 22. For each Member State the levy was to consist of three components. The first was to reflect the incidence on feeding costs of the difference between prices for feed grains ruling in the importing State and those ruling on world markets. Here again a precise method of calculating this component was laid down, and here again it did not involve any computation of the kind with which Case 76/70 was concerned. The second component was to be the same as the second component fixed under Article 3 (1), except in the case of a Member State to which Article 3 (2) applied. In such a case the second component was to be calculated by reference to the provisions of Article 3 (2). I need not, I think, burden Your Lordships with a detailed analysis of how this calculation was to be made. The significant point is that it rendered relevant for the purposes of Article 4 of Regulation No 22 the computation made under Article 3 (2) which took account of transport costs and of internal taxes. The third component was to be a percentage of, generally speaking, the appropriate ‘sluice-gate price’ fixed under Article 6 of Regulation No 22, to which I shall come.
      By Article 5 of Regulation No 22 the Commission was empowered, at the request of a Member State, to authorize it to charge, subject to certain conditions, lower levies than those prescribed by Articles 3 and 4. Reliance is placed on this Article by the Plaintiff in Case 126/73.
      My Lords, I do not find it possible to summarize the relevant provisions of Article 6. They were as follows:
      
               
            
            
               
                        ‘1.
                     
                     
                        Afin d'éviter des perturbations dues à des offres en provenance des pays tiers faites à des prix anormaux, le Conseil, statuant sur proposition de la Commission… fixe pour la volaille abattue, différenciée par espèce, un prix d'écluse uniforme pour la Communauté, en tenant compte des prix de céréales fourragères sur le marché mondial et d'un coefficient de transformation représentatif pour les pays tiers exportateurs.’
                     
                  …
            
         
               
            
            
               
                        ‘3.
                     
                     
                        Dans le cas où les prix d'offre franco frontière à l'importation tombent au-dessous du prix d'écluse, le montant des prélèvements déterminés conformément aux dispositions de l'article 4 et diminués le cas échéant conformément aux dispositions de l'article 5 est augmente, dans chaque État membre, d'un montant égal à la différence entre le prix d'offre franco frontière et le prix d'écluse.’
                     
                  
         That is the origin of the additional levies mentioned in the questions referred to the Court by the Finanzgericht Hamburg.
      Those questions are in the following terms:
      
               ‘1.
            
            
               Are Articles 4 and 6 of Regulation No 22/62 of the Council to be so interpreted that the standard levy or the additional levy imposed on imports of slaughtered poultry or of poultry meat from third countries is to be reduced by a fixed amount equivalent to the turnover equalization tax levied on such imports?
            
         
               2.
            
            
               If the answer to question 1 is in the affirmative, are Regulations Nos 91/65 of the Commission of 29 June 1965 and 124/65 of the Commission of 22 September 1965 invalid insofar as they fix levies or additional levies for poultry within tariff heading No 02.02?’
            
         I should, I think, explain, with regard to the second question, that tariff heading No 02.02 was that which comprised slaughtered poultry. Regulations No 91/65 and 124/65 of the Commission were implementing regulations adopted in pursuance of, inter alia, Articles 4 and 6 of Regulation No 22. I enter into no more detail about them because if, as I think, the first question posed by the Finanzgericht Hamburg is to be answered in the negative, the second question posed by that Court does not arise.
      The argument put forward on behalf of the Plaintiff in Case 126/73, though elaborated at great length and with much learning, is, as I understand it, basically the same as that put forward on behalf of the Plaintiffs in Cases 119, 124 and 125/73 in relation to durum wheat and to denatured tapioca flour. It is however carried further. Not only is it said that the decision of the Court in Case 76/70 established a general principle not confined to cases where Article 4 of Regulation No 19 applied. It is said that Regulation No 19 was itself the ‘spearhead’ of the series of Regulations to which I referred at the outset and that it must be taken as having implicitly stamped with that principle all the Regulations in that series, including Regulation No 22. Were it otherwise, so the argument runs, all these Regulations would be in breach of Article 39 and of Article 12 of the EEC Treaty. The conclusion drawn by the Plaintiff is that the Federal Republic ought to have applied to the Commission for authority under Article 5 of Regulation No 22 to reduce its levies by the amount of its turnover equalization tax.
      My Lords, that argument was, in my opinion, rightly described by Counsel for the Commission as imaginative but as failing to keep its feet on the ground. I have no doubt that it ought to be rejected. It proceeds, to my mind, from a false premise (as to the scope of the decision of this Court in Case 76/70) through a succession of non-sequiturs (for instance as to the effect of Article 39) to a conclusion that is inconsistent with the plain meaning of Regulation No 22 — a regulation that laid down with particularity how the levies on poultry-meat should be fixed and which envisaged a computation taking into account internal taxes only in the cases to which Article 3 (2) applied either directly or referentially.
      I am therefore of the opinion that the first question asked by the Finanzgericht Hamburg in Case 126/73 should be answered as follows:
      ‘Neither Article 4 nor Article 6 of Regulation No 22/62 of the Council is to be interpreted as meaning that any deduction is to be made from the levies on slaughtered poultry or on poultry meat in respect of any such tax as the German turnover equalization tax.’
      As I have already said, on that view the second question posed by that Court does not arise.