1 By order of 27 July 1995, received at the Court on 9 August 1995 and supplemented by order of 4 September 1995, received at the Court on 12 September 1995, the Pretura Circondariale (District Magistrate's Court), Verona, Sezione Distaccata di Isola della Scala (Isola della Scala Division), referred to the Court for a preliminary ruling under Article 177 of the EC Treaty a question on the interpretation of Articles 10 and 11 of Commission Regulation (EEC) No 3478/92 of 1 December 1992 laying down detailed rules for the application of the premium system for raw tobacco (OJ 1992 L 351, p. 17), as amended by Commission Regulation (EC) No 3477/93 of 17 December 1993 concerning the agricultural conversion rates to be applied in the tobacco sector (OJ 1993 L 317, p. 30).
2 That question was raised in proceedings between an individual tobacco producer, Impresa Agricola Buratti Leonardo, Pierluigi e Livio (`Buratti') and the group of producers to which it belongs, Tabacchicoltori Associati Veneti Soc. coop. arl (`TAV'), concerning the date to be taken into consideration in order to determine the agricultural conversion rate applicable to the amount of the processing premium.
3 Council Regulation (EEC) No 2075/92 of 30 June 1992 on the common organization of the market in raw tobacco (OJ 1992 L 215, p. 70) made substantial alterations to the Community rules governing the raw tobacco market. In order to stabilize that market and ensure a fair standard of living for the agricultural population concerned, Regulation No 2075/92 introduced inter alia a premium system (Title I) and a system of production limitation (Title II) from 1993 until 1997.
4 The sixth recital in the preamble to Regulation No 2075/92 states that the premium system can be managed efficiently by means of cultivation contracts between growers and processors which guarantee stable outlets to the growers and regular supplies to the processor. Payment of the premium by the processor to the producer at the time of delivery of the tobacco covered by the contract, subject to compliance with the quality requirements, provides support for the growers while facilitating management of the premium system.
5 Article 5(c) of Regulation No 2075/92 makes the granting of the premium subject in particular to the condition that `the leaf tobacco must be delivered by the producer to the premises of the first processor under a cultivation contract'.
6 By virtue of Article 6 of Regulation No 2075/92: `(1) Cultivation contracts shall comprise: - an undertaking by the first processor to pay to the grower, in addition to the purchase price, a sum equal to the premium at the time of delivery for the quantity under contract and effectively delivered; - an undertaking by the grower to deliver to the premises of the first processor raw tobacco corresponding to the quality requirements. (2) The competent body shall reimburse the amount of the premium to the first processor against presentation of proof that the grower has delivered the tobacco and that the amount referred to in the first paragraph has been paid.'
7 In addition, Article 12(1) of Regulation No 2075/92 provides that: `In order to concentrate supply and adapt it to the qualitative requirements of the market, specific aid equivalent to 10% of the premium shall be granted where cultivation contracts are concluded between a first processor and a recognized group of producers and where the deliveries covered by such contracts account for the entire output of the members of the group.'
8 Regulation No 3478/92 lays down detailed rules for the application of the premium system for raw tobacco in order, in particular, that `the premium, expressed in national currency, shall be identical for all producers concerned who deliver their tobacco to producers over a given period of time, by applying the conversion rate applicable at the beginning of the said marketing period' (ninth recital).
9 Article 2(1) and (2) provides that: `1. Cultivation contracts as referred to in Article 5(c) of Regulation (EEC) No 2075/92 shall be concluded between a producer or groups of producers on the one hand and the processor who carries out the first processing and market preparation operations on the other. 2. Cultivation contracts shall be concluded by group of varieties. They shall commit the processor to taking delivery of the quantity of leaf tobacco provided for in the contract and the producer or group of producers to delivering that quantity to the processor, to the extent that their actual production so allows.'
10 Article 10 of Regulation No 3478/92 provides that: `An amount equal to the premium shall be paid to the producer by the processing undertaking within one month of the end of the each delivery under contract.'
11 Lastly, Article 11 of Regulation No 3478/92 originally provided that: `The agricultural conversion rate to be used for converting premiums and advances on premiums into national currency shall be the rate applicable on 1 August of the year of harvest for deliveries up to 31 December of that year and that applicable on 1 January of the following year for deliveries thereafter. Processors shall pay premiums to producers in the currency of the Member State in which the tobacco was harvested'.
12 The first sentence of Article 11 was repealed by Article 6 of Regulation No 3477/93, which, following the introduction of the new common organization of the market, brought together for reasons of clarity the specific provisions applicable to conversion rates in the tobacco sector. Article 1 of Regulation No 3477/93 provides, in terms virtually identical to the former Article 11 of Regulation No 3478/92, that: `The agricultural conversion rate to be applied for conversion into national currency of the amount of the premium and the advance on the premium payment referred to in Article 3 of Regulation (EEC) No 2075/92 shall be the rate valid on 1 August of the year of harvest, as regards deliveries up to 31 December of that year, and the rate valid on 1 January of the following year, as regards later deliveries.'
13 Buratti is an agricultural undertaking of economic importance established in Sossano (Italy), whose main activity is the cultivation of tobacco of the Bright variety. It is a member of the cooperative society TAV, a group of tobacco producers, which entered into a cultivation contract with a first processor, Cooperativa Tabacchi Verona (`CTV'), relating to its members' total production for the 1993 and 1994 harvests.
14 In pursuance of that contract, Buratti delivered 88 529 kilogrammes of Bright tobacco to TAV, which that group delivered to CTV for processing.
15 It should be noted that the order for reference contains no particulars of the factual circumstances surrounding the delivery of the tobacco. However, it does emerge from the written observations submitted to the Court that between August 1993 and January 1994 the members of TAV placed the tobacco in a warehouse lent by CTV to TAV without charge, under the supervision of the Italian intervention body responsible for paying the premium, l'Azienda di Stato per gli Interventi nel Mercato Agricolo (AIMA). Delivery notes were made out at the time expressly stating that: `the undersigned processor (CTV) hereby declares that this note does not constitute assumption of responsibility for the tobacco'. Furthermore, the agreement between TAV and CTV in respect of the classification of the tobacco was not signed until 28 January 1994. Finally, according CTV's VAT statements, property in the tobacco was legally transferred to CTV on 7 and 31 January 1994.
16 Following delivery of the tobacco, CTV paid TAV the amount of the premium, using the conversion rate applicable on 1 August 1993 to convert the sum into national currency. According to CTV, when deliveries were made in performance of a cultivation contract concluded with a group of producers it was necessary when determining the applicable conversion rate to have regard, not to the contractual date of delivery, which it said was January 1994, but rather to the dates on which the members supplied their `contributions' to the group during the second half of 1993. CTV stated that in so acting it had followed the corresponding instructions given by AIMA, themselves issuing from instructions given by the Commission.
17 By letter of 14 April 1994, TAV then asked the Commission whether the dates to be taken into account in the circumstances for the purposes of applying the ECU/LIT conversion rate were in fact 7 January and 31 January 1994.
18 By letter of 26 May 1994, the Director-General of DG VI stated that, having regard to the applicable provisions and to the facts set out by TAV, the dates to be taken into consideration as delivery dates for the purposes of determining exchange rates were those appearing on the daily delivery notes.
19 In response to that letter, TAV collected and divided amongst its members the amount of the premium calculated in national currency at the conversion rate applicable on 1 August 1993. Consequently it allotted Buratti a smaller sum for the 88 529 kilograms of Bright tobacco from the 1993 harvest than would have been payable if it had applied the conversion rate in force on 1 January 1994.
20 After unsuccessfully seeking the difference from TAV, on 25 May 1995 Buratti brought an action against TAV before the Verona Pretura Circondariale, requesting that the group be ordered to pay it the sum of LIT 19 296 666 to make up the premium payable to it on the basis of the exchange rate in force on 1 January 1994, together with interest at the legal rate.
21 In the main proceedings, TAV reaffirmed its view that the date to be taken into consideration for the purposes of determining the conversion rate was the date on which the tobacco was delivered by the producers to their group.
22 Accordingly, the Magistrate decided to stay proceedings and to refer the following question to the Court for a preliminary ruling: `Is Regulation (EEC) No 3478/92, and in particular Articles 10 and 11, to be interpreted as meaning that the date to be taken into consideration for the purposes of applying the agricultural conversion rate to the processing premium is the date on which tobacco is delivered to the processor by the producer group or the date on which the product is supplied by the individual producer to the group itself, and what constitutes "delivery under contract" within the meaning of the abovementioned provisions?'
23 Since the first sentence of Article 11 of Regulation No 3478/92 was, as noted in paragraph 12 of this judgment, repealed and replaced by Article 1 of Regulation No 3477/93, it should be considered that the national court's question seeks to establish what interpretation should be given to the terms `delivery under contract' and `delivery' used in Article 10 of Regulation No 3478/92 and Article 1 of Regulation No 3477/93 respectively, where a processor has entered into a cultivation contract with a group of producers.
24 In this respect, it should be observed first of all that the concept of `delivery' is a concept of Community law. It constitutes a key component of the premium system in the raw tobacco sector, which lays down detailed rules for payment of the purchase price, payment of the premium to the producer and repayment of the premium to the processor and also the checks to be carried out by the competent authorities.
25 Thus, under Article 10 of Regulation No 3478/92, payment of the purchase price and payment to the producer by the processor of an amount equal to the premium are to be made within one month of the end of each `delivery'. Moreover, Article 12 of Regulation No 3478/92 provides that the premiums paid to producers are to be reimbursed to processors only on the basis of a control certificate issued by the competent authorities of the Member States after verification of all `deliveries' from the harvest to the processor concerned.
26 It follows that the concept of `delivery' cannot depend on national classification under civil, commercial or revenue law. If that were the case, the common organization of the market would be applied differently in the Member States in areas of particular importance to its proper working, namely the time-limit for payment of premiums, determination of the conversion rate and carrying out checks.
27 As regards the substance of that concept, it should be noted that the provisions of Regulations No 2075/92 and No 3478/92 in which the terms `delivery under contract' and `delivery' appear concern the relationship between the processor and the producer or group of producers and have nothing to do with the relations between individual producers and the group to which they belong.
28 Thus, as far as Regulation No 2075/92 is concerned, Article 5(c) makes the grant of the premium subject inter alia to the condition that the leaf tobacco must be `delivered' by the producer to the premises of the first processor under a cultivation contract, whilst Article 6 refers to the grower's undertaking to `deliver' tobacco to the processor as an element of that contract. In addition, Article 12(1) encourages the setting up of producers' groups by granting specific aid of 10% of the premium where cultivation contracts are concluded between a first processor and a recognized group of producers and where the `deliveries' covered by such contracts account for the entire output of the members of the group.
29 Similarly, as regards Regulation No 3478/92, Article 2(1) and (2) describes cultivation contracts as concluded between a processor and `a producer or group of producers' and as committing the processor to take `delivery' of the quantity of leaf tobacco provided for in the contract and the producer or group of producers to `deliver' that quantity to the processor, to the extent that their actual production so allows.
30 Furthermore, Article 10 of Regulation No 3478/92 sets a period of one month from the end of each `delivery under contract' for the payment to the producer by the processor of an amount equal to the premium. Article 1 of Regulation No 3477/93 states that that sum is to be converted into national currency by applying the agricultural conversion rate valid on 1 August of the year of harvest, as regards `deliveries' up to 31 December of that year, and the rate valid on 1 January of the following year, as regards later `deliveries'.
31 Articles 12 and 15 of Regulation No 3478/92, which relate respectively to reimbursement of premiums and advances on premiums, also use the concept of delivery to refer to delivery of the tobacco by a producer or group of producers to the processor.
32 It must accordingly be concluded that the term `delivery' used in Article 1 of Regulation No 3477/93 is to be interpreted, where the processor has concluded a cultivation contract with a group of producers, as referring to the delivery of the tobacco to the processor by the group of producers and not to the individual producer's contribution of tobacco to the group.
33 Moreover, it should be emphasized that the concept of `delivery' refers to the supply, by a producer or group of producers to the processor, of a quantity of tobacco in order for it to be processed in performance of the cultivation contract.
34 The fact that Article 10 of Regulation No 3478/92 uses the term `delivery under contract' does not allow of a different interpretation. As the Advocate General pointed out in Section 20 of his Opinion, the use of the description `under contract' is intended merely to stress the fact that the period of one month within which the premium must be paid by the processor does not start to run until goods which comply with the terms of the cultivation contract have been delivered.
35 In the circumstances, it is for the national court to determine when the delivery of the tobacco, as thus defined, took place, taking into account all the factual circumstances surrounding the supply of the tobacco. In this regard, it must consider, in particular, whether the tobacco was merely stored in a warehouse lent by the processor or whether it was actually delivered for processing, which might be the case, especially insofar as delivery took place under the supervision of the competent national authorities in connection with the common organization of the market.
36 Therefore, the answer to be given to the national court must be that the terms `delivery under contract' and `delivery' used in Article 10 of Regulation No 3478/92 and Article 1 of Regulation No 3477/93 respectively are to be interpreted, where the processor has concluded a cultivation contract with a group of producers, as referring to the delivery, by a producer or group of producers to the processor, of a quantity of tobacco to be processed in performance of the cultivation contract.