Outokumpu Oy.
Date: 1998-04-02
19 As regards classification, the Court has consistently held (see, inter alia, Case C-90/94 Haahr Petroleum v benrå Havn and Others [1997] ECR I-4085, paragraph 19) that provisions relating to charges having equivalent effect and those relating to discriminatory internal taxation cannot be applied together, so that under the system established by the Treaty the same charge cannot belong to both categories at the same time.
20 The Court has also consistently held (see, inter alia, Haahr Petroleum, paragraph 20) that any pecuniary charge, whatever its designation and mode of application, which is imposed unilaterally on goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense, constitutes a charge having equivalent effect within the meaning of Articles 9, 12, 13 and 16 of the EC Treaty.  However, such a charge may not be so characterised if it forms part of a general system of internal dues applying systematically to categories of products according to objective criteria applied without regard to the origin of the products, in which case it falls within the scope of Article 95 of the Treaty.
24 Outokumpu observes, however, that according to the Court's case-law (see, in particular, Case 132/78 Denkavit Loire v France [1979] ECR 1923, paragraph 8), in order to form part of a general system of internal dues, the charge imposed on imported products must be imposed on domestic products and imported products at the same marketing stage and the chargeable event must be identical for both classes of products.
25 On this point, it must be stated that, in circumstances such as those of this case, no difference may be discerned in the fact that imported electricity is taxed at the time of importation and electricity of domestic origin at the time of production, since in view of the characteristics of electricity the marketing stage is the same for both operations, namely the stage when the electricity enters the national distribution network (see, to that effect, Joined Cases C-149/91 and C-150/91 Sanders Adour and Guyomarc'h Orthez Nutrition Animale v Directeur des Services Fiscaux des Pyrénées-Atlantiques [1992] ECR I-3899, paragraph 18).
27 The Court has already held that a charge in the form of an internal tax may not be regarded as a charge having equivalent effect to a customs duty unless the detailed rules governing the levying of the charge are such that it is imposed solely on imported products to the exclusion of domestic products (Case 32/80 Officier van Justitie v Kortmann [1981] ECR 251, paragraph 18). As may be seen from paragraph 23 above, that is not the case of the duty at issue in the main proceedings.
28 The Court has also held that the fact that the origin of the goods determines the amount of the duty to be levied cannot remove it from the scope of Article 95 of the Treaty (Haahr Petroleum, paragraph 25).
30 As regards the compatibility of such a duty with Article 95 of the Treaty, it is settled case-law, first, that in its present state of development Community law does not restrict the freedom of each Member State to establish a tax system which differentiates between certain products, even products which are similar within the meaning of the first paragraph of Article 95 of the Treaty, on the basis of objective criteria, such as the nature of the raw materials used or the production processes employed. Such differentiation is compatible with Community law, however, only if it pursues objectives which are themselves compatible with the requirements of the Treaty and its secondary legislation, and if the detailed rules are such as to avoid any form of discrimination, direct or indirect, against imports from other Member States or any form of protection of competing domestic products.
32 As the Court stated in Case 302/86 Commission v Denmark [1988] ECR 4607, paragraph 8, protection of the environment constitutes one of the essential objectives of the Community. Moreover, since the entry into force of the Treaty on European Union, the Community's task includes the promotion of sustainable and non-inflationary growth respecting the environment (Article 2 of the EC Treaty) and its activities include a policy in the sphere of the environment (Article 3(k) of the EC Treaty).
34 However, on the question whether differentiation such as that which characterises the tax system at issue in the main proceedings is compatible with the prohibition of discrimination in Article 95 of the Treaty, the Court has consistently held that that provision is infringed where the taxation on the imported product and that on the similar domestic product are calculated in a different manner on the basis of different criteria which lead, if only in certain cases, to higher taxation being imposed on the imported product (see, in particular, Case C-152/89 Commission v Luxembourg [1991] ECR I-3141, paragraph 20).
35 That is the case where, under a system of differential taxation of the kind at issue in the main proceedings, imported electricity distributed via the national network is subject, whatever its method of production, to a flat-rate duty which is higher than the lowest duty charged on electricity of domestic origin distributed via the national network.
36 The fact that electricity of domestic origin is in some cases taxed more heavily than imported electricity is immaterial in this connection since, in order to ascertain whether the system in question is compatible with Article 95 of the Treaty, the tax burden imposed on imported electricity must be compared with the lowest tax burden imposed on electricity of domestic origin (see, to that effect, Commission v Luxembourg, paragraphs 21 and 22).
38 The Court has already had occasion to point out that practical difficulties cannot justify the application of internal taxation which discriminates against products from other Member States (see, inter alia, Case C-375/95 Commission v Greece [1997] ECR I-5981, paragraph 47).
39 While the characteristics of electricity may indeed make it extremely difficult to determine precisely the method of production of imported electricity and hence the primary energy sources used for that purpose, the Finnish legislation at issue does not even give the importer the opportunity of demonstrating that the electricity imported by him has been produced by a particular method in order to qualify for the rate applicable to electricity of domestic origin produced by the same method.
40 Moreover, the Court has already held that although in principle Article 95 of the Treaty does not require Member States to abolish differences which are objectively justified and which national legislation establishes between internal taxes on domestic products, it is otherwise where such abolition is the only way of avoiding direct or indirect discrimination against the imported products (Case 21/79 Commission v Italy [1980] ECR 1, paragraph 16).