1 By order of 21 June 1989, which was received at the Court on 30 June 1989, the Vredegerecht for the judicial district of Brasschaat referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the validity of Commission Regulation No 3779/88 of 2 December 1988 on the reimbursement of the co -responsibility levy in the cereals sector provided for in Regulations Nos 2040/86 and 1432/88 in respect of first-stage processing undertaken on a producer' s account ( Official Journal 1988 L 332, p . 17 ).
2 That question was raised in a dispute between Mr Van Landschoot, a farmer, and NV Mera, a company producing compound feedingstuffs . Mera bought from Mr Van Landschoot 4 925 kg of wheat at the price of BFR 44 252 . It deducted from that price the sum of BFR 1 242 ( 0.2522 x 4 925 ) by way of the co-responsibility levy in the cereals sector .
3 Mr Van Landschoot brought an action against Mera before the Vredegerecht for payment of the sum of BFR 1 242, on the ground that certain provisions of the Community legislation on the co-responsibility levy were invalid .
4 The co-responsibility levy had been introduced by Council Regulation ( EEC ) No 1579/86 of 23 May 1986 amending Regulation ( EEC ) No 2727/75 on the common organization of the market in cereals ( Official Journal 1986 L 139, p . 29 ). The detailed rules for its application were laid down by Commission Regulation ( EEC ) No 2040/86 of 30 June 1986 ( Official Journal 1986 L 173, p . 65 ), as amended by Commission Regulation ( EEC ) No 2572/86 of 12 August 1986 ( Official Journal 1986 L 229, p . 25 ).
5 In the proceedings before the national court, Mr Van Landschoot argued that Regulation No 2040/86, as amended, was invalid for breach of the general principle of equal treatment, Article 40(3 ) of the EEC Treaty and the rules laid down by the Council in this field .
6 The matter was referred for a preliminary ruling to the Court of Justice which, by judgment in Case 300/86 [1988] ECR 3443, held that "the second subparagraph of Article 1(2 ) of Commission Regulation No 2040/86 of 30 June 1986, as amended by Commission Regulation No 2572/86 of 12 August 1986, is invalid in so far as it exempts from the co-responsibility levy the first-stage processing of cereals carried out on the producer' s own agricultural holding by means of the machinery of the farm, provided that the products of the processing are used on that holding, but does not provide for such exemption for first-stage processing carried out off the producer' s agricultural holding or by means of machinery which does not form part of the agricultural installations of the farm, where the products of the processing are used on that farm ".
7 In the same judgment, the Court held that, pending the adoption by the Community legislature of such measures as may be appropriate in order to establish equal treatment for operators "the competent authorities must continue to apply the exemption laid down in the provision at issue but they must also grant it to operators affected by the discrimination found to exist ".
8 In the meantime, the co-responsibility levy system had been amended by Council Regulation ( EEC ) No 1097/88 of 25 April 1988 amending Regulation ( EEC ) No 2727/75 on the common organization of the market in cereals ( Official Journal 1988 L 110, p . 7 ). The new detailed rules for the application of the co-responsibility levy were laid down by Commission Regulation ( EEC ) No 1432/88 of 26 May 1988 ( Official Journal 1988 L 131, p . 37 ), which repealed Regulation No 2040/86 .
9 In the light of the judgment of the Court of 29 June 1988, the Commission considered that Regulation No 1432/88 gave rise to the same difference of treatment as Regulation No 2040/86 to which the judgment related .
10 It therefore amended Regulation No 1432/88 by adopting Regulation ( EEC ) No 2324/88 of 26 July 1988 ( Official Journal 1988 L 202, p . 39 ), whose aim was, according to the preamble thereto, that "equality of treatment of operators should ... be re-established by exempting from the co-responsibility levy producers who have first-stage processing operations carried out by a third party with a view to the subsequent use of the processed product on their holdings ". That regulation entered into force on 27 July 1988 .
11 Furthermore, the Commission took the view that it was necessary to reimburse to producers who had been adversely affected by the unequal treatment found to exist by the Court the co-responsibility levies which they had been required to pay on the basis of Regulation No 2040/86 and, until 26 July 1988, on the basis of Regulation No 1432/88 .
12 Commission Regulation No 3779/88 of 2 December 1988 was adopted with that end in view . Article 1 of that regulation is worded as follows : "1 . The competent agencies designated by the Member States shall reimburse before 30 June 1989 to producers, on application by the latter, the amounts of co-responsibility levies withheld : ( i ) on processing operations on the producer' s account as referred to in the second sentence of Article 1(2 ) of Regulation ( EEC ) No 2040/86, the product obtained from which has been used on the holding of the producer for animal feed; ( ii ) on operations for the processing of cereals delivered or made available to an undertaking by a producer ( work under contract ) for subsequent utilization on his holding by 26 July 1988 pursuant to Article 1(2 ) of Regulation ( EEC ) No 1432/88 . ..."
13 It is in the light of those provisions that the Vredegerecht has once again been called upon to adjudicate on the dispute between Mr Van Landschoot and Mera, following the Court' s judgment of 29 June 1988 .
14 In the proceedings before the Vredegerecht, Mr Van Landschoot stated that after selling 4 925 kg of wheat to Mera, he purchased from the latter 13 072 kg of compound feedingstuffs for laying hens, which consisted as to 35%, or 4 575 kg, of wheat and were intended for use as animal feed on his own holding . He argued that in respect of the cereals thus processed co-responsibility levy was not payable, namely in the amount of 0.2525 x 4 575, that is BFR 1 154 .
15 According to the plaintiff in the main proceedings, the Court' s judgment had to be understood as meaning that cereals supplied by a producer to a processor and then used, after processing, by the same producer on his own holding were to be exempted from the levy, without any distinction being made according to whether the cereals had been sold and subsequently repurchased by the producer from the processor in the form of feed or had been supplied in order to be processed under contract .
16 However, the Vredegerecht found that in Regulation No 3779/88 the Commission had adopted a more restrictive interpretation of the judgment, limiting the possibility of reimbursement of the levy to cases in which the cereals had been supplied by the producer for processing under contract .
17 The Vredegerecht therefore decided once again to stay the proceedings until the Court had given a preliminary ruling on the following question : "Is Commission Regulation ( EEC ) No 3779/88 of 2 December 1988 valid in so far as it limits repayment of the co-responsibility levy to the first-stage processing of cereals which are supplied or made available to a processing undertaking by a producer ( contract work ) to the exclusion of cereals that are sold to such an undertaking even if they are later bought back by the producer in the form of feed with a view to using it on his own agricultural holding?"
18 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the course of the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .
19 It should be pointed out at the outset that, having regard to the terms used in its question, the national court is implicitly referring to the second indent of Article 1(1 ) of the contested Regulation No 3779/88 . That indent concerns reimbursement of the co-responsibility levies paid under Regulation No 1432/88, whereas reimbursement of the levies which, like the one forming the subject-matter of the dispute in the main proceedings, were paid under Regulation No 2040/86 is referred to in the first indent .
20 The question submitted for a preliminary ruling must therefore be understood as relating to the validity of Article 1(1 ), taken as a whole, of Regulation No 3779/88 .
21 In order to answer that question, it should borne in mind that Regulation No 2040/86, as amended, whose validity was assessed by the Court in its judgment of 29 June 1988, imposed the co-responsibility levy in respect of "first-stage processing" of cereals, including the processing of cereals delivered or made available to an undertaking by a producer for subsequent use on his holding . However, according to the second subparagraph of Article 1(2 ) of that regulation, cereals were exempted from the levy where first-stage processing was carried out by the farmer on his own holding, by means of the machinery of the farm, and the product was used on the same holding .
22 As the Court pointed out in its judgment of 29 June 1988, the objective of the Community regulations governing the co-responsibility levy is to limit the structural surpluses on the cereals market and that objective provides justification for imposing the levy only on the processing of cereals placed on the market, since the quantities of cereals remaining in a closed circuit do not contribute to the creation of surpluses .
23 That is why, in the aforesaid judgment, the Court considered that different treatment of processors was justified according to whether the processed products were placed on the market or used on the processor' s holding, and that it was therefore in principle permissible to treat industrial processors and farmer-processors differently, since the former as a general rule carried on processing for the purpose of selling the products of processing on the market .
24 It follows that, having regard to the objective pursued by the co-responsibility levy, the question whether or not the products are placed on the market is the distinguishing criterion for determining whether or not traders are liable to pay the levy .
25 In that regard, it should be noted that placing on the market occurs as soon as a producer divests himself of the cereals which he has produced to sell them to a processor, whoever he may be, even if the producer subsequently buys back the cereals from the processor in the form of processed products .
26 It was in accordance with that criterion that, in its judgment of 29 June 1988, the Court considered that exemption from the co-responsibility levy could not be granted in respect of first-stage processing which was indeed carried out on the farm but involved cereals which had been purchased from third parties and had thus entered the economic chain, whilst first-stage processing of cereals carried out by an industrial processor had to be exempted from the levy, in the same way as first-stage processing on the farm, where the processed products were not placed on the market in the sense defined above .
27 In the light of the same criterion, it must also be considered that producers are in different situations and may thus be accorded different treatment according to whether they sell the cereals to a processor, even with a view to buying back from him, for the needs of their farm, compound feedingstuffs produced from those cereals, or whether they merely have the cereals processed on their account by a processor . In the former case, the products are placed on the market, but in the latter case they are not .
28 In those circumstances, once it had decided to reimburse the co-responsibility levy paid by the producers who had been adversely affected by the discrimination found to exist by the Court in its judgment of 29 June 1988, the Commission was entitled to restrict the benefit of that reimbursement to producers who had used on their own holdings the cereals produced by them and processed on their account, and not to extend it to producers who had sold the cereals they had produced to a processor and had then bought them back after processing with a view to using them on their own holdings .
29 Accordingly, there are no factors of such a kind as to call in question the validity of the first indent of Article 1(1 ) of the regulation at issue .
30 The same conclusion must be drawn with regard to the validity of the second indent . In that regard, it is sufficient to note that, as the Commission has itself pointed out, Regulation No 1432/88 of 26 May 1988 was, before its amendment by Regulation No 2324/88 of 26 July 1988, unlawful for the same reasons as Regulation No 2040/86 and was therefore open to the same criticisms as were formulated by the Court in its judgment of 29 June 1988 with regard to the last-mentioned regulation .
31 It follows that, for the same reasons as those set out above, reimbursement of the co-responsibility levies collected pursuant to Regulation No 1432/88 in its original version could be limited to producers who had supplied or made available to a processing undertaking, for processing under contract, the cereals which they had produced and which were intended for use, after processing, on their own holdings .
32 It follows from the foregoing considerations that the answer to be given to the national court must be that consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Article 1(1 ) of Commission Regulation No 3779/88 of 2 December 1988 on the reimbursement of the co-responsibility levy in the cereals sector provided for in Regulations Nos 2040/86 and 1432/88 in respect of first-stage processing undertaken on a producer' s account .