CELEX: 61975CC0046
Language: en
Date: 1975-12-17
Title: Opinion of Mr Advocate General Warner delivered on 17 December 1975. # IBC, Importazione Bestiame Carni srl v Commission of the European Communities. # Case 46-75.

OPINION OF MR ADVOCATE-GENERAL WARNER
      DELIVERED ON 17 DECEMBER 1975
      
         My Lords,
      In this action the applicant, IBC Importazione Bestiame Carni s.r.l., which carries on business in Trieste as an importer of meat, claims damages against the Commission under Article 178 and the second paragraph of Article 215 of the EEC Treaty, on the ground that, in respect of three importations that it (the applicant) effected on 3 March 1973, 27 April 1973 and 10 August 1973 respectively (the first and third being of cattle on the hoof from Hungary and the second of hindquarters, of beef from Jugoslavia), it was charged excessive customs duty as a result of the application by the Italian customs authorities of legislation invalidly, the applicants says, adopted by the Commission fixing, or purporting to fix, certain reductions to be made in the monetary compensatory amounts applicable to trade in beef and veal.
      On the pleadings there was some uncertainty as to the amount claimed by the applicant by way of damages. It now seems clear, however, in the light of the answer given by the applicant to a question asked by the Court at the close of pleadings, that that amount is Lit. 320729, which, it is agreed between the parties, is the total amount that the applicant, if it is right in law, was overcharged.
      Your Lordships will remember that monetary compensatory amounts (which I will call for-short ‘m.c.a.'s’) were introduced by Council Regulation (EEC) No 974/71 of 12 May 1971, following the widening of the margins of fluctuation for the currencies of some Member States.
      Article 1 (1) of that Regulation, as replaced by Article 2 of Council Regulation (EEC) No 509/73 of 22 February 1973, provides that a Member State whose currency has increased in value beyond the fluctuation margin permitted by international rules in force on 12 May 1971 shall charge m.c.a.'s on imports and grant them on exports of agricultural products and that, conversely, a Member State whose currency has decreased in value beyond the margin so permitted shall charge m.c.a.'s on exports and grant them on imports of such products. Italy is, of course, a country whose currency has decreased in value, so that it grants m.c.a.'s on imports.
      By Article 3 of Regulation No 509/73 there was inserted in Regulation No 974/71 a new Article 4a, which is, so far as material, in the following terms:
      
               “1.
            
            
               In trade with third countries, compensatory amounts … granted on imports shall be deducted from the import charge …
            
         
               2.
            
            
               In trade between the Member States and with third countries, the compensatory amounts applicable due to the decrease in value of the currency concerned may not be higher than the charge on products imported from third countries.
               However, the Council, acting on a proposal from the Commission and in accordance with the voting procedure provided for in Article 43 (2) of the Treaty, may decide, in certain exceptional cases, that the first subparagraph shall not be applicable”. (OJ L 50 of 23. 2. 1973)
            
         Article 6 of Regulation No 974/71 provides that detailed rules for the application of that Regulation shall be adopted in accordance with the “Management Committee procedure” laid down in each of the Regulations on the common organizations of agricultural markets. Your Lordships will have it in mind that, under that procedure, the Commission is empowered to adopt measures having immediate effect, subject to review by the Council if they are not in accordance with the opinion of the relevant Management Committee.
      Article 7 of Regulation No 974/71, as replaced by Article 2 of Council Regulation No 2746/72 of 19 December 1972, provides among other things that
      “… for the purposes of the financing of the common agricultural policy, the compensatory amounts granted in trade with third countries shall be treated as part of the expenditure on refunds granted on exports to third countries.” (OJ L 291 of 28. 11. 1972)
      This means that liability for such amounts falls eventually on the European Agricultural Guidance and Guarantee Fund.
      Such much for the legislation of the Council that is in point in this case.
      The Commission first exercised the power conferred on it by Article 6 of Regulation No 974/71 by adopting, on 17 May 1971, Regulation (EEC) No 1013/71 “laying down detailed rules of application for Regulation (EEC) No 974/71”. Regulation No 1013/71 was subsequently amended on no fewer than six occasions. Nothing however in this case turns on its provisions or on those of any of the Regulations amending it.
      On 1 March 1973, again in exercise, or purported exercise, of the power conferred on it by Article 6 of Regulation No 974/71, the Commission adopted Regulation (EEC) No 648/73. This, so far as material for present purposes, did two things. First it repealed and re-enacted in consolidated form the provisions of Regulation No 1013/71 as amended. Secondly, by Article 6, it introduced provisions designed to give effect to paragraph (2) of the new Article 4a of Regulation No 974/71. Article 6 of Regulation No 648/73 read as follows:
      “1.   For the purposes of applying Article 4a (2) of Regulation (EEC) No 974/71 the Commission shall fix the amounts by which the “monetary” compensatory amounts are to be “adjusted”.
      2.   The amounts fixed pursuant to paragraph 1 shall be altered at regular intervals if this is rendered necessary by changes in the charge on imports from third countries.” (OJ L 64 of 9. 3. 1973)
      Article 17 of Regulation No 648/73 was, so far as material, in the following terms:
      “This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Communities.
      However, the amounts resulting from its application shall apply from 26 February 1973.” (OJ L 64 of 9. 3. 1973)
      The Regulation was in fact published in the Official Journal on 9 March 1973.
      On the same day there was published in the Official Journal Regulation (EEC) No 649/73, which had also been adopted by the Commission on 1 March 1973, and which fixed, or purported to fix, the m.c.a.'s applicable for a period beginning on 26 February 1973: Article 3 of this Regulation was in terms indentical to those of Article 17 of Regulation No 648/73.
      On 23 March 1973 the Commission adopted Regulation (EEC) No 905/73 fixing, or purporting to fix, pursuant to Article 6 of Regulation No 648/73, the amounts by which the m.c.a.'s fixed by Regulation No 649/73 were to be adjusted in order to give effect to Article 4a (2) of Regulation No 974/71. Regulation No 905/73 was expressed to enter into force on the day of its publication in the Official Journal — in fact 7 April 1973 — but the amounts thereby fixed were expressed to be applicable as from 26 February 1973.
      Your Lordships will remember that, of the three importations with which this case in concerned, the first was effected by the applicant on 3 March 1973, that is to say before Regulations Nos 648/73, 649/73 and 905/73 entered into force but after the date (26 February 1973) as from which the m.c.a.'s and adjustments to them resulting from those Regulations were thereby expressed to be applicable.
      That first importation was, as I have mentioned, one of live cattle from Hungary. At that time the only charge on such an importation was a customs duty of 8 % ad valorem. The m.c.a., as fixed by Regulation No 649/73, was Lit. 46·70 per kg, whilst the reduction in the m.c.a. fixed by Regulation No 905/73 waslit. 5·45 per kg.
      The total value of the cattle imported was Lit. 11292260. On this, the customs duty, at 8 %, was Lit. 903380.
      The total weight of the cattle was 17085 kg. On this, at Lit. 46·70 per kg, the m.c.a. was Lit. 797869.
      If the reduction in the m.c.a. provided for by Regulation No 905/73 had been ignored, that m.c.a. of Lit. 797869 would, under Article 4a (1) of Regulation No 974/71, have been deducted from the customs duty of Lit. 903380, leaving the applicant liable to pay Lit. 105511.
      But the Italian customs authorities reduced the m.c.a. by the Lit. 5·45 per kg fixed by Regulation No 905/73, that is to Lit. 41·25 per kg, or Lit. 704760 in all. The deduction of that Lit. 704760 from the customs duty of Lit. 903380 left the applicant liable to pay Lit. 198620.
      The difference between that Lit. 198620 and Lit. 105511 is the first item in the total of Lit. 320729 claimed by the applicant in this action.
      On 6 April 1973 the Commission adopted Regulation (EEC) No 974/73 altering the m.c.a.'s. This Regulation entered into force on the day of its publication in the Official Journal, which was 12 April 1973. The Regulation was expressed to apply from 9 April 1973, but this is immaterial in the present case because, as I have mentioned, the second importation here in question was effected by the applicant on 27 April 1973.
      On 12 April 1973 the Commission adopted Regulation (EEC) No 1031/73 altering the amounts by which the m.c.a.'s were to be adjusted pursuant to Article 6 of Regulation No 648/73. This Regulation too entered into force on the day of its publication in the Official Journal, 21 April 1973, and it too was expressed to apply from 9 April 1973. But again, and for the same reason, the latter feature of it is here immaterial.
      The applicant's second importation was, Your Lordships remember, one of hindquarters of beef from Jugoslavia. The only charge on that importation was a customs duty of 10 % ad valorem. The m.c.a., fixed by Regulation No 974/73, was Lit. 135·41 per kg. The reduction in the m.c.a. fixed by Regulation No 1031/73 was Lit. 17·85 per kg.
      The total value of the meat imported by the applicant was Lit. 14619000. On that the customs duty amounted to Lit. 1461900.
      The total weight of the meat was 10368 kg. On that, at Lit. 135·41 per kg, the m.c.a. was Lit. 1403930. If the reduction in the m.c.a. provided for by Regulation No 1031/73 had been ignored, the Lit. 1403930 would have been deducted from the 1461900, leaving the applicant liable to pay Lit. 57970.
      As it was, the Italian customs reduced the m.c.a. by the Lit. 17·85 per kg fixed by Regulation No 1031/73, that is to Lit. 117·56 per kg or, in all, Lit. 1218870. This left the applicant liable to pay Lit. 243030.
      The difference between that Lit. 243030 and Lit. 57970 is the second item in the total sum claimed by the applicant from the Commission in this action.
      On 30 May 1973 the Commission adopted Regulation (EEC) No 1463/73. This entered into force on 4 June 1973, which was the date of its publication in the Official Journal of the Communities. It was amended by Commission Regulation (EEC) 1957/73 of 18 July 1973, which was published in the Official Journal on 20 July 1973 and entered into force three days later.
      The importance of Regulation No 1463/73 as so amended is twofold.
      First it repealed and replaced with amendments Regulation No 648/73. It was thus, at the time of the applicant's third relevant importation, the main Commission Regulation in force implementing Council Regulation No 974/71.
      Secondly, it expressly alluded, which Regulation No 648/73 had not done, to a difference between beef and veal on the one hand and all other agricultural products on the other, which must lead, at all events in the view of the Commission, to a difference in their treatment in the matter of adjustments to m.c.a.'s.
      That difference consisted, as I understand it, in the fact that, in the case of beef and veal, the charge on imports from third countries was (or, in certain circumstances, included) an ad valorem customs duty, whereas in the case of all other relevant products the charges on such imports (mostly levies) were fixed by reference to a unit of weight or the like, without regard to value. This meant that, in the case of products other than beef and veal, there was no difficulty in calculating the amount by which any m.c.a. must be reduced in order to ensure that, in compliance with Article 4a (2) of Regulation No 974/71, it did not exceed the charge on imports from third countries. The m.c.a. and that charge being both fixed in the same terms, they could readily be compared. In the case of beef and veal, however, the customs duty per unit of weight would vary according to the value of the goods. This gave rise to no problem in the case of imports from third countries, since, in the case of such imports, each consignment of goods must be valued and the customs duty on it computed. But no such valuation or computation was called for in the case of exports to third countries or, more important still perhaps, in the case of intra-Community trade. To have required the customs authorities of Member States to value each consignment of goods involved in such transactions, merely in order to see whether any and, if so, what adjustment to the m.c.a. applicable to that consignment was called for, would have imposed an undue burden on those authorities and created objectionable barriers to trade. The Commission concluded that the only solution, albeit not an entirely satisfactory one, was for the adjustments to the m.c.a.'s to be computed in the case of beef and veal on a flat-rate basis, taking as the starting point of their computation, not the actual value of the goods comprised in each consignment, but the “import prices” calculated by the Commission under Council Regulation (EEC) No 805/68. (That Regulation, Your Lordships remember, established the common organization of the market in beef and veal, and it provided, by Article 10, for the calculation “on the basis of quotations recorded on the most representative markets of third countries” of “import prices” which were to be compared with the Community “guide prices” in oder to determine whether at any time levies should be imposed on imports from third countries in addition to the customs duty.) The Commission further concluded that artificial deflections of trade might occur unless the flat-rate adjustments to m.c.a.'s thus computed applied to all transactions in beef and veal, including imports from third countries.
      That reasoning had, as I understand it, been applied by the Commission in fixing adjustments to m.c.a.'s under Article 6 of Regulation No 648/73. The innovation introduced by Regulation No 1463/73 was that it made that reasoning explicit. Another innovation that was introduced, consistently with that reasoning, by Regulation No 1463/73 was to leave the calculation of adjustments to m.c.a.'s, in the case of all products other than beef and veal, to the Member States. The Commission was henceforth to confine itself to fixing the flat-rate adjustment applicable in trade in beef and veal.
      I need not, I think, take up Your Lordships' time in reading the relevant recitals in the preamble to Regulation No 1463/73. The relevant operative provision was Article 5, which, as amended by Article 1 of Regulation No 1957/73, read, so far as material, as follows:
      ‘1.   The Member States shall take the measures necessary to ensure that the provisions of Article 4 (a) (2) of Regulation (EEC) No 974/71 are observed. (OJ L 146 of 4. 6. 1973)
      2.   However, in the cases of beef and veal, Member States shall reduce the “monetary” compensatory amounts by amounts which will be communicated to them for that purpose. These amounts shall be established by the Commission on the basis of the import price calculated in accordance with Article 10 (1) of Regulation (EEC) No 805/68 …’ (OJ L 200 of 20. 7. 1973)
      As I have mentioned, the third importation with which this case is concerned, was another importation of live cattle from Hungary, effected by the applicant on 10 August 1973. To that importation the customs duty of 8 % ad valorem applied. The m.c.a., fixed by Commission Regulation (EEC) No 2102/73 of 31 July 1973, was Lit. 136·78 per kg.
      The total value of the cattle imported was Lit. 7888410. On that the customs duty amounted to Lit. 631080.
      The total weight of the cattle was 11470 kg. On that, at Lit. 136·78 per kg, the m.c.a. amounted to Lit. 1156996. It was thus in excess of the amount of the customs duty and, if left unadjusted, would have had the effect, under Article 4a of Regulation No 974/71, of cancelling the liability for that duty.
      The Italian customs authorities, however, applied to the m.c.a. a reduction of Lit. 85·48 per kg fixed, pursuant to Article 5 of Regulation (EEC) No 1463/73, by a Commission Decision of 30 July 1973 (73/268/EEC). It is, I think, open to doubt whether this was, on any view, correct, because the reductions fixed by that Commission Decision were expressed to be applicable to the m.c.a.'s fixed by earlier Regulations of the Commission, which were repealed by Regulation No 2102/73. No point as to this has, however, been raised by either of the parties.
      The effect of applying that reduction of Lit. 85·48 per kg was to reduce the m.c.a. from Lit. 1156996 to Lit. 588420. Deducting that Lit. 588420 from the customs duty of Lit. 631080 left a balance of Lit. 42660, which the applicant was required to pay.
      That Lit. 42660 is the third item in the total of Lit. 320729 which the applicant claims from the Commission.
      In its pleadings the Commission raised the question whether this action was admissible, but did not formally claim that it was inadmissible. In reponse however to an invitation by the Court to clarify its position in this respect at the hearing, the Commission there submitted that the action was inadmissible.
      In support of that submission it put forward two arguments: first, that the applicant's claim was in truth a claim for restitution of sums overpaid and therefore a claim in quasi-contract, which should be assimilated, for the purposes of Article 215 of the Treaty, to a contractual claim; and, secondly, that the claim involved the Community's own resources as defined by the Decision of the Council of 21 April 1970 (70/243 ECSC, EEC, Euratom), so that, by virtue of Article 6 of that Decision and in accordance with the judgment of the Court in Case 96/71 Haegeman v Commission (Rec. 1972 (2) pp. 1014-1015), it was a claim of a kind that should be made in the appropriate Courts of the Member State responsible for collecting such resources, in this instance Italy.
      I would not, for my part, accept the first of those arguments. I do not believe that, in the modern law of any of our countries, quasi-contract is regarded as a branch of the law of contract. Consider, for instance, Article 1370 of the French Civil Code and the structure of Book II of the German Civil Code (BGB). In English law contract and quasi-contract have, historically, a common origin in the old action of ‘assumpsit’, but they are today quite separate branches of the law. Indeed to mark their separation, most contemporary authorities prefer to call quasi-contract ‘restitution’. I cannot think that the authors of the Treaty, when they referred in the first paragraph of Article 215 to the ‘contractual liability of the Community’ meant it to include liability to make restitution of sums overpaid in the absence of any contract.
      Nor do I think it quite accurate to dismiss the claim simply on the ground that it involved the Community's own resources. The sums paid by the applicant in this case were paid as customs duty and, at the material time (1973), only part of the revenue from customs duties collected by each Member State entered into the Community budget — see Article 3 of the Council's Decision of 21 April 1970. It is correct that, by virtue of Article 7 of Regulation No 974/71 (which I have read), the reduction in m.c.a.'s of which the applicant complains operated to reduce the burden on the European Agricultural Guidance and Guarantee Fund. But this resulted in a reduction in the Community's expenditure, rather than in an increase in its resources properly so called.
      Nonetheless I am of the opinion that the Commission is right in saying that the action is inadmissible. In a way, this follows a fortiori from the decision in the Haegeman case. To the extent that the amounts collected from the applicant by way of customs duties were appropriated to the Community, the decision in that case is in point. To the extent that such amounts were retained by the Italian Treasury any liability to repay them must be a liability of the Italian State, even though the EAGGF is in effect bound, in the end, to indemnify the Italian State against any such liability.
      Certain cases were cited in argument where the Court held an applicant entitled to sue a Community Institution for damages under the second paragraph of Article 215 on the basis that he had suffered loss as a result of the conduct of that Institution. But it seems to me that those cases are distinguishable. They were all cases where the applicant's real complaint was of the failure of the Community Institution concerned to confer upon him a right to receive a payment.
      Thus, in Case 43/72 Merkur v Commission [1973] ECR 1055, a German trader complained of the Commission's failure to fix, for a certain period, m.c.a.'s for products processed from barley, so that he had been denied the grant of m.c.a.'s on his exports of such products during that period. The distinction between such a claim and one, like the claim in the Haegeman case, for repayment of an amount alledgedly overpaid to the authorities of a Member State was pointed out by Mr Advocate-General Mayras, who emphasized that the admissibility of an action must depend on the nature and subject-matter of the claims made in it ([1973] ECR at pp. 1080-1081; Rec. 1973 (2) at pp. 1081-1082).
      In Case 152/73 Holtz & Willemsen v Council and Commission [1974] ECR 675 a German oil-miller complained of the defendants' action in confining a certain subsidy to Italian oil-millers and claimed, by way of damages, the sums he would have received if that subsidy had been extended to oil-millers throughout the Community. In that case it fell to Mr Advocate-General Reischl to point out the distinction between that type of claim and one of the kind made in the Haegeman case ([1974] ECR 701; Rec. 1974, p. 702).
      In Case 74/74 CNTA v Commission [1975] ECR 533, the Court held that a French exporter of oil-seeds was entitled to sue the Commission under the second paragraph of Article 215 for its failure to include in a Regulation abolishing m.c.a.'s in trade in such seeds transitional provisions for the protection of those who had committed themselves to export transactions in the expectation of receiving m.c.a.'s.
      One cannot therefore derive from those authorities the general proposition in effect contended for by the applicant that anyone who claims to have suffered loss in consequence of conduct of a Community Institution that he alleges to be unlawful may sue that Institution under the second paragraph of Article 215. Indeed not only the judgment of the Court in the Haegeman case but also its judgment in Case 99/74 Société des Grands Moulins des Antilles v Commission (26 November 1975, not yet reported) shows that that is not so.
      It follows in my opinion that the applicant's correct remedy was to sue the appropriate Italian State body in the Italian Courts, raising there, pursuant to Article 184 of the Treaty, the question of the validity of the acts of the Commission of which it complains, and leaving it to those Courts if necessary to refer that question to this Court under Article 177. In saying this I do not overlook that there are, in the Merkur, Holtz & Willemsen and CNTA cases, authoritative references to the undesirability of causing circuity of proceedings. That undesirability is manifest, but it does not, in my opinion, afford a ground for granting a general liberty to litigants in the Community to seek the wrong remedy in the wrong Court. There agian the Haegeman case and the case of the Grands Moulins des Antilles are, of course, in point.
      Notwithstanding the view I take as to the inadmissibility of the action, it is right, I think, that I should express also my view on the substance of it.
      A curious aspect of the applicant's pleadings is that, barring a passing reference in the application to Regulation No 648/73, those pleadings rested the applicant's claim exclusively on the alleged invalidity of Article 5 of Regulation No 1463/73, which in fact applied only to the last of the three relevant importations. In answer to a question asked by the Court at the close of pleadings, the applicant said that this had been done as a matter of convenience, because Regulation No 1463/73 was the last in date and because its recitals clearly revealed the Commission's reasoning.
      In essence, the applicant's case, as put in its pleadings, was that the Commission had no power to legislate as it did for reductions in m.c.a.'s. Pointing to articles 145 and 155 of the Treaty, the applicant put forward, in support of that contention, four main arguments.
      First it argued that so to legislate defeated the very purpose of m.c.a.'s since it prevented them from accurately compensating for the difference between the official parity of a national currency and its true rate of exchange. This operated to the advantage of traders in Member States with strong currencies and to the detriment of those with weak currencies. My Lords, it seems to me that this argument goes too far. Reduction of m.c.a.'s to the level of the charges on imports from third countries, where the m.c.a.'s would otherwise be higher, is expressly provided for by Article 4a (2) of Council Regulation No 974/71, the validity of which the applicant does not challenge. The applicant's real complaint is against the fixing by the Commission, in the beef and veal sector, of flat-rate reductions — because, where, as in the case of the three importations here in question, the goods imported are worth more than the ‘import price’ on the basis of which the relevant flat-rate reduction has been calculated, the application of that flat-rate reduction reduces the m.c.a. not merely to the level of the import charge but below it. Conversely, of course, where the goods are worth less than the ‘import price’, the application of the flat-rate reduction may leave the m.c.a. higher than the import charge.
      The applicant's second argument is that there is a difference between deducting the m.c.a. from the import charge, which is what Article 4a provides for, and making a deduction from the m.c.a., which is what the Commission legislated for. So, my Lords, there is. But it is an immaterial difference where the only effect of making a deduction from the m.c.a. is to reduce it to the level of the import charge. Here again the applicant's real complaint is against the fixing of flat-rate deductions which may do more (or less) than that.
      The applicant's third argument goes to the heart of the matter. It is that the fixing of flat-rate reductions is inconsistent with Article 4a. The applicant contends that, so far at all events as imports from third countries are concerned, the Commission should have left it to the customs authorities in the Member States concerned to apply that provision to each actual consignment of goods, i.e. should have left it to them to deduct the actual m.c.a. from the actual customs duty on that consignment. To the Commission's objection that this would involve either fixing flatrate reductions only for transactions other than importations from third countries, so that the effective m.c.a.'s on such importations would be different from those on other transactions, or else requiring the customs authorities to compute the value of the goods comprised in all transactions, the applicant replies in what, I think, amounts to two ways.
      First it says that, Article 4a (2), providing that ‘In trade between the Member States and with third countries, the compensatory amounts … may not be higher than the charge on products imported from third countries’, is intended to apply, so far as regards trade between Member States or exports to third countries, only to transactions involving goods that have identifiably been imported from third countries. The submission, in other words, is that Article 4a (2) does not apply where the goods are of Community origin nor, as I understand it, in the case of goods of third country origin, where they have lost their identity (through transformation or otherwise) since their original importation from a third country. It seems to me, my Lords, that that proposition must be rejected. Article 4a (2), in my opinion, clearly means that, in a country whose currency has depreciated, the amount of the charge on products imported from third countries shall be the upper limit of all m.c.a.'s.
      Alternatively, the applicant contends that it is the job of customs authorities to value goods that cross frontiers and that they have to do it anyway for VAT purposes. I was at first impressed by this point in so far as it related to VAT. The view seemed to me tenable that, if goods exported to third countries, and goods imported from or exported to other Member States, had to be valued anyway for VAT purposes, the Commission's case fell to the ground. But, leaving aside the question whether such goods do in fact have to be so valued in the case of Italy, a question to which the answer is not altogether clear, I think that, at the end of the day, the Commission met the point convincingly when it explained that goods of Community origin or in free circulation in a Member State have, because of Community preference, a higher market value than goods intrinsically the same imported from third countries, so that, if like was to be compared with like, a different method of valuation than any used for VAT purposes would have to be applied to the former in order to establish the amount of the charge that they would have borne if imported from a third country.
      In support of its fourth argument the applicant relied not only on Articles 145 and 155 of the Treaty, but also on Article 162. But the latter Article, which was repealed by Article 19 of the Merger Treaty and replaced by Articles 15 and 16 of that Treaty, seems to me very remote from the point.
      The applicant's fourth argument is that the provisions of Article 5 of Regulation No 1463/73 constituted such a departure from those of Article 4a of Regulation No 974/71 that they could have been enacted only by the Council itself. The applicant points in this connexion to the second subparagraph of Article 4a (2), where the Council reserved power to ‘decide, in certain exceptional cases, that the first subparagraph shall not be applicable’. I would reject this argument too. In providing for and fixing the flat-rate deductions from m.c.a. s in respect of beef and veal, the Commission was not departing from the provisions of Article 4a or deciding that any of them should not apply. It was seeking to implement those provisions in what seemed to it to be, within the limits of what was administratively practicable, the least inappropriate way. This seems to me to have been well within the powers conferred on the Commission by Article 6 of Regulation No 974/71 — consider the judgment of the Court in Case 154/73 Becker v Hauptzollamt Emden [1974] ECR 19. That case, incidentally, serves as a reminder that m.c.a.'s are themselves necessarily flat-rate amounts, because it is not practicable to fix them by reference to the actual price paid under each import or export contract. There can hardly be anything fundamentally wrong in making flat-rate adjustments to what are themselves flat-rate amounts.
      So much, my Lords, for the arguments put forward in the applicant's pleadings. At the hearing, Counsel for the applicant raised the question of the retroactivity of the Commission Regulations applicable to the first and to the second importations.
      As I have shown, that question does not in fact arise in the case of the second importation: the Regulations fixing the m.c.a. on that importation and the adjustment applicable to it (Regulations Nos 974/73 and 1031/73) were partly retroactive, but not so as to affect that importation.
      The retroactivity point could therefore arise only as regards the first importation. As to this I am of the opinion that the applicant raised it too late. The Rules of Procedure of the Court, in particular Articles 38 (1) (c), 41 and 42 require the grounds on which an application is based to be pleaded and do not, in my opinion, allow a fresh ground to be raised at the hearing. This is because the raising of a fresh ground at the hearing may catch the defendant unprepared to deal with it. The present case itself illustrates this. The retroactive Regulations applicable to the first importation included Regulation No 649/73 fixing m.c.a. For aught we know, that m.c.a., even as reduced by the adjustment prescribed by Regulation No 905/73, may have been greater than m.c.a. previously applicable, so that, all in all, the applicant may have suffered no loss from the application of the retroactive legislation. But the Commission, having been given no notice of any point as to retroactivity, had no opportunity of examining that possibility. It must, however, in fairness to Counsel for the applicant, be said that, in answer to a question of mine, he conceded that he could not rely on retroactivity if it were right that he had raised it for the first time at the hearing. His submission was that the point was implicit in his pleadings. But I can find no reference to it, even implied, there.
      In the result I am of the opinion that this action should be dismissed with costs.