CELEX: C1995/137/12
Language: en
Date: 1995-06-03 00:00:00
Title: JUDGMENT OF THE COURT (Sixth Chamber) of 6 April 1995 in Case C-147/94: Commission of the European Communities v. Kingdom of Spain (Failure by a Member State to fulfil its obligations - Failure to transpose a directive)

No C 137/6                EN                      Official Journal of the European Communities                                       3 . 6 . 95
entered into by the branch in the name of its parent body are                input VAT paid, even if the ultimate purpose of the
to be performed in the Contracting State in which the                        transaction is the carrying out of a taxable transaction.
branch is established.
                                                                             (') OJ No C 43 , 12 . 2 . 1994 .
(M OJ No C 338 , 15 . 12 . 1993 .                                            ( 2 ) OJ No 71 , 14 . 4 . 1967, p . 1301 .
( z ) OJ No L 229 , 7 . 10 . 1992 , p . 32 .                                 (>) OJ No L 145 , 13 . 6 . 1977, p . 1 .
(-') O J No L 304 , 30 . 1 0 . 1 978 , p. 1 and — the amended version —
      P - 77.
                                                                                             JUDGMENT OF THE COURT
                                                                                                        ( Sixth Chamber )
                                                                                                         of 6 April 1995
               JUDGMENT OF THE COURT
                                                                             in Case        C-147/94 : Commission of the            European
                             ( Fifth Chamber )                                            Communities v. Kingdom of Spain ( 1 )
                             of 6 April 1995                                 (Failure by a Member State to fulfil its obligations — Failure
in Case C-4/94 ( reference for a preliminary ruling from the                                       to transpose a directive)
Queen 's Bench Division of the High Court of Justice ): BLP                                                ( 95/C 137/12 )
   Group pic v. Commissioners of Customs and Excise (')
 ( Value added tax — Interpretation ofArticle 2 ofDirective
67/22 7/EEC and Article 17(2) ofDirective 77/388/EEC —
                                                                                              (Language of the case: Spanish)
Deduction of input tax on goods or services relating to
                         exempt transactions)                                (Provisional translation; the definitive translation will be
                               ( 95/C 137/ 11 )                                         published in the European Court Reports)
                                                                             In Case C-147/94 : Commission of the European
                (Language of the case: English)
                                                                             Communities ( Agents : Dimitrios Gouloussis and F. Enrique
                                                                             Gonzalez Diaz ) against the Kingdom of Spain (Agents :
In Case C-4/94 : reference to the Court under Article 177 of                 Alberto Jose Navarro Gonzalez and Gloria Calvo Diaz ) —
the EC Treaty from the Queen 's Bench Division of the High                   application for a declaration that, by failing to adopt and
Court of Justice for a preliminary ruling in the proceedings                 bring into force the laws , regulations or administrative
pending before that court between BLP Group pic and                          provisions necessary to comply with Council Directive
Commissioners         of      Customs        and  Excise   —   on    the     90/61 8/EEC of 8 November 1990 amending, particularly as
interpretation of Article 2 of the First Council Directive                   regards motor vehicle liability insurance, Directive
                                                                             73/239/EEC and Directive 88 /357/EEC which concern the
67/227/EEC of 11 April 1967 on the harmonization of
legislation of Member States concerning turnover taxes ( 2 )                 coordination of laws , regulations and administrative
and Article 17 ( 2 ) of the Sixth Council Directive                          provisions relating to direct insurance other than life
77/388/EEC of 17 May 1977 on the harmonization of the                        assurance (2 ) and by not informing the Commission thereof,
laws of the Member States relating to turnover taxes —                       the Kingdom of Spain has failed to fulfil its obligations
Common system of value added tax : uniform basis of                          under the EC Treaty — the Court ( Sixth Chamber ),
assessment ( 3 ) — the Court ( Fifth Chamber ), composed of                  composed of F. A. Schockweiler, President of the Chamber,
C. Gulmann, President of the Chamber, J. C. Moitinho de                      P. J. G. Kapteyn, C. N. Kakouris ( Rapporteur ) J. L. Murray
Almeida ( Rapporteur ) and D. A. O. Edward , Judges; C. O.                   and H. Ragnemalm, Judges; F. G. Jacobs,
Lenz , Advocate-General ; L. Hewlett, Administrator, for the                 Advocate-General; R. Grass, Registrar, gave a judgment on
Registrar, has given a judgment on 6 April 1995 , in which it                6 April 1995 , the operative part of which is as follows :
rules :
                                                                             1 . by failing to adopt and bring into force within the
                                                                                   prescribed period the laws, regulations or administrative
Article 2 of the First Council Directive 67/227/EEC of                             provisions necessary to comply with Council Directive
11 April 1967 on the harmonization of legislation of                               90/618/EEC of 8 November 1990 amending,
Member States concerning turnover taxes and Article 17 of                          particularly as regards motor vehicle liability insurance,
the Sixth Council Directive 77/388/EEC of 17 May 1977 on                           Directive    73 /239/EEC        and Directive 88/357/EEC
the harmonization of the laws of the Member States relating                        which concern the coordination oflaws, regulations and
to turnover taxes — Common system of value added tax:                              administrative provisions relating to direct insurance
uniform basis ofassessment, must be interpreted as meaning                         other than life assurance, the Kingdom of Spain has
that, except in the cases expressly provided for by those                          failed to fulfil its obligations under the EC Treaty;
Directives, where a taxable person supplies services to
another taxable person who uses them for an exempt
transaction, the latter person is not entitled to deduct the                 2 . the remainder of the application is dismissed;
 ---pagebreak--- 3 . 6 . 95              EN                    Official Journal of the European Communities                                  No C 137/7
3 . the Kingdom of Spain is ordered to pay the costs.                    5 . Export refund of                         DM 518 181,00,
                                                                             which the German authorities are said to be obliged to
( ) OJ No C 188 , 9 . 7 . 1994 .                                             recover because the exports of beef in the years 1986/87
( 2 ) OJ No L 330 , 29 . 11 . 1990 , p . 44 .                                 on which it was based went not to South Africa but in
                                                                              fact to Zimbabwe .
                                                                         6 . Special premium for beef producers of
                                                                                                                    DM 3 118 563,54 .
Action brought on 2 March 1995 by the Federal Republic of
Germany against the Commission of the European                           On point 1
                             Communities
                                                                         The reason given by the Commission for imposing the
                          ( Case C-54/95 )                               penalty, namely that the German customs authorities
                            ( 95/C 137/13 )                              delayed in transposing the judgment of the Court of Justice
                                                                         of 22 June 1993 in Case C-54/91 ( 2 ), is not justified : the new
An action against the Commission of the European                         administrative procedure, not objected to by the
Communities was brought before the Court of Justice of the               Commission, has in fact been applied since 19 November
 European Communities on 2 March 1995 by the Federal                     1993 .
 Republic of Germany, represented by Ernst Roder,
 Ministerialrat, and Gereon Thiele, of the Federal Ministry of           Moreover, there is no legal basis for a penalty. The
 Economic Affairs, 53107 Bonn, Germany .                                 Commission does not have the authority independently to
                                                                         fix such penalty payments or lump sums — which is what
The applicant claims that the Court should :                             the 'penalty' at issue here purports to be — without
                                                                         complying with a single one of the conditions of
 1.    annul Commission Decision 94/ 871 /EC of 21 December              Article 171 ( 2 ) of the EC Treaty .
       1994 (') on the clearance of the accounts presented by
       the Member States in respect of the expenditure for               On point 2
       1991 of the European Agricultural Guidance and
       Guarantee Fund ( EAGGF ) Guarantee Section,                       The entitlement to an export refund is conditional on the
       document SG ( 94 ) D/ 19706 of 29 December 1994                   existence of an export. It is established that cattle left the
       ( COM ( 94 ) 3308 final ), in so far as it refuses to             territory of the Community and were released into free
       recognize the sum of DM 116 633 582,10 ;                          circulation in Poland . Whether those exports might perhaps
                                                                         not have been effected if only the refund rate for cattle for
 2 . order the defendant to pay the costs .                              slaughter had been applicable, is of no relevance for the
                                                                         definition of an export for the purpose of the rules on
 Pleas in law and main arguments adduced in support:                     refunds . Since the cattle exported corresponded to the
                                                                         definition of breeding animals — under German law, in the
 The application contests the charging of the following                   absence of Community rules, in accordance with
 amounts :
                                                                          Article 6 ( 1 ) of Directive 77/504/EEC — the Federal
                                                                          Republic of Germany was obliged to pay the export refund
  1 . Penalty of                                DM 1 013 451,17           for animals for breeding.
       equivalent to 10% of a sum charged to the Federal
       Republic of 5 % of the production refunds for the use of           The Commission is wrong to criticise the German
       starch and sugar on the ground of breaches of provisions           Government on the ground that the German customs
       of Regulations ( EEC ) No 2169/86 and ( EEC )                      authorities did not react quickly enough to indications of
       No 1729/78 respectively.                                           possible abuses . The German authorities had long since
                                                                          taken measures when the Commission adopted Community
  2 . Export refunds of                        DM 54 275 090,69
                                                                          rules in March ( Regulation ( EEC ) No 811/92 ) and August
       relating to exports of livestock to Poland as breeding             1992 ( Regulation ( EEC ) No 2342/92 ).
       animals of the bovine species .
  3 . Part of claims to reimbursement against the firm Imex               On point 3
       on the ground of export benefits obtained by deception,
        penalty for failure to comply with the time limit                 The German investigating authorities did not infringe any
        prescribed for stating a position, amounting to                   legal obligation which could give rise to a financial charge,
                                              DM 56 692 508,70 .          and in particular not their obligation under Article 5 of the
                                                                          EC Treaty in conjunction with Article 8 of Regulation ( EEC )
  4 . Export refund of                             DM 997 814,00          No 729/70 to recover sums wrongly paid . The Commission
        allowed to the firm Siidfleisch for exports of beef, in           has no power to instruct a Member State as to which of
        respect of which evidence of arrival in the United Arab           several possible investigative measures it must carry out.
        Emirates — which turned out to be false — was
        originally produced , and after an extension of the time          The fault of an auxiliary customs officer in their
        limit had been granted by the German authorities,                 employment must indeed be imputed to the German
        evidence of the arrival of the shipment in Lebanon was            customs authorities, but charging is recognized only to the
        produced .                                                        extent of the contravention found by the German criminal