1 By order of 2 July 1987, which was received at the Court Registry on 20 August 1987, the Bundesfinanzhof referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Community law relating to the incurring and collection of a customs debt .
2 The question was raised in proceedings between Wilhelm Kiwall KG, Hamburg ( hereinafter referred to as "Kiwall "), and the Hauptzollamt Hamburg-St Annen ( hereinafter referred to as "the Hauptzollamt ") relating to the post-clearance collection of a customs debt which arose, under the German legislation in force at the material time, on the release for free circulation in the Federal Republic of Germany of goods from a non-member country not already in free circulation in the Community .
3 It appears from the documents before the Court that between 12 January 1979 and 9 May 1980 Kiwall purchased hosiery in Denmark which was released for free circulation in the Federal Republic of Germany upon presentation by Kiwall of a T2 Community transit form, in accordance with the internal Community transit procedure provided for in Council Regulation ( EEC ) No 222/77 of 13 December 1976 on Community transit ( Official Journal 1977, L 38, p . 1 ). The Hauptzollamt therefore required payment only of import turnover tax .
4 It was subsequently discovered that those goods from a non-member country had been smuggled into Denmark by the seller and that consequently the T2 form had been improperly obtained from the Danish authorities . For that reason the Hauptzollamt, by decision of 19 February 1981, required Kiwall to pay customs duties of DM 241 676.76 .
5 That decision was annulled by the Finanzgericht ( Finance Court ) Hamburg, before which Kiwall had brought an appeal; the Hauptzollamt then appealed on a point of law to the Bundesfinanzhof, which stayed the proceedings and referred the following question to the Court for a preliminary ruling : "As the harmonization of customs law stood in May 1980, was a German customs provision to the effect that a customs debt was incurred in respect of goods originating in a non-member country which were smuggled into another Member State and then brought unlawfully into the Federal Republic of Germany without completion of customs formalities under the internal Community transit procedure compatible with Community law?"
6 Reference is made to the Report for the Hearing for a fuller account of the facts of the case before the national court, the course of the procedure and the observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .
7 The purpose of the national court' s question is essentially to determine whether the Community customs provisions applicable in May 1980 precluded the incurring of a customs debt on the release for free circulation in a Member State of goods from a non-member country which were first smuggled into another Member State and then transported under the internal Community transit rules into the Member State where they were released for free circulation .
8 It should be borne in mind that Article 36 ( 1 ) of Regulation No 222/77 on Community transit provides : "When it is found that, in the course of a Community transit operation, an offence or irregularity has been committed in a particular Member State, the recovery of duties or other charges which may be chargeable shall be effected by that Member State in accordance with its provisions laid down by law, regulation or administrative action, without prejudice to the institution of criminal proceedings ."
9 In its judgment of 27 November 1984 in Case 99/83 Fioravanti v Amministrazione delle Finanze dello Stato (( 1984 )) ECR 3939, the Court, interpreting an identical provision in the previous regulation, Regulation No 542/69 of the Council of 18 March 1969 on Community transit ( Official Journal, English Special Edition 1969 ( I ), p . 125 ), held that where, by reason of an offence or irregularity committed in connection with a Community transit operation, the duties and other charges payable are not collected, recovery of those duties and charges is to be effected by the Member State in which the offence or irregularity was committed, in accordance with the laws, regulations and administrative provisions of that State .
10 In the present case it is apparent from the documents before the Court that both the smuggling of the goods into the Community and the improper obtaining of form T2 were offences or irregularities committed in Denmark . Because of the close connection between those two offences or irregularities, they must both be regarded as having been committed in connection with a Community transit operation . Under the abovementioned provision, as interpreted in the judgment in Case 99/83, it is therefore the responsibility of the Danish authorities to effect recovery of the customs duties payable in respect of the importation of the goods into the Community . The acts committed in Denmark have thus already given rise to a customs debt .
11 Where an offence or irregularity committed in a Member State has given rise to a customs debt in that State, Article 36 of Regulation No 222/77 leaves no room for the incurring of a customs debt in another Member State where the T2 form is then used with a view to having the goods in question released for free circulation . That result is in accordance with the very concept of a customs union, which precludes the double taxation of goods in connection with their entry into the Community customs territory as defined by Regulation No 1496/68 of the Council of 27 September 1968 ( Official Journal, English Special Edition 1968 ( II ), p . 436 ). It must, however, also be stated that Article 36 of Regulation No 222/77 expressly leaves intact any possibility under national law of instituting criminal proceedings against any person using a T2 form improperly obtained in another Member State .
12 It must therefore be stated in reply to the question submitted by the national court that Article 36 ( 1 ) of Council Regulation No 222/77 of 13 December 1976 on Community transit must be interpreted as precluding the incurring of a customs debt on the release for free circulation in a Member State of goods from a non-member country which were first smuggled into another Member State and then transported under the internal Community transit procedure into the Member State where they were released for free circulation, since the offences or irregularities committed in the other Member State have already given rise to a customs debt in that State .