1 BY AN ORDER OF 7 MAY 1981 WHICH WAS RECEIVED AT THE COURT ON 10 JUNE 1981 THE FINANZGERICHT ( FINANCE COURT ) HAMBURG REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION AS TO THE VALIDITY OF ARTICLE 1 ( 3 ) OF COMMISSION REGULATION ( EEC ) NO 572/78 OF 21 MARCH 1978 LAYING DOWN DETAILED RULES FOR THE APPLICATION OF SPECIAL IMPORT ARRANGEMENTS FOR CERTAIN TYPES OF FROZEN BEEF INTENDED FOR PROCESSING ( OFFICIAL JOURNAL , L 78 , P . 17 ).
2 THE FILE SHOWS THAT THE PLAINTIFF IN THE MAIN ACTION , BY A CUSTOMS DECLARATION OF 16 OCTOBER 1978 , ASKED THE GERMAN CUSTOMS ADMINISTRATION FOR CLEARANCE FOR THE RELEASE INTO FREE CIRCULATION OF 13 5391 KG OF FROZEN BONED BEEF INTENDED FOR PROCESSING . CLEARANCE WAS GRANTED ON THE CONDITIONS LAID DOWN BY ARTICLE 1 OF COMMISSION REGULATION ( EEC ) NO 572/78 . THE CUSTOMS ADMINISTRATION SUBSEQUENTLY FOUND THAT ONLY 5 150 KG OF FROZEN BEEF HAD BEEN PROCESSED IN THE PERIOD BETWEEN 25 AND 31 JANUARY 1979 , THAT IS WITHIN THE TIME-LIMIT OF THREE MONTHS LAID DOWN BY ARTICLE 1 ( 3 ) OF REGULATION NO 572/78 , AND THAT 8 3891 KG WAS PROCESSED BETWEEN 1 AND 12 FEBRUARY 1979 .
3 IN VIEW OF THAT FAILURE TO OBSERVE THE TIME-LIMIT THE CUSTOMS ADMINISTRATION , IN ACCORDANCE WITH THE SECOND AND THIRD SUBPARAGRAPHS OF ARTICLE 1 ( 3 ) OF REGULATION NO 572/78 , CONSIDERED AS FORFEIT THE AMOUNT OF THE SECURITY LODGED BY THE PLAINTIFF IN PROPORTION TO THE QUANTITY OF MEAT WHICH WAS PROCESSED OUTSIDE THE TIME-LIMIT AND , PURSUANT TO ARTICLE 1 ( 8 ) OF THE SAID REGULATION , FIXED THE ADDITIONAL SUM PAYABLE AS LEVY BY THE PLAINTIFF AT DM 42 044.49 .
4 THE PLAINTIFF INSTITUTED PROCEEDINGS BEFORE THE FINANZGERICHT FOR THE ANNULMENT OF THE DECISION THUS FIXING THE AMOUNT OF THE LEVY , CLAIMING THAT THE CHARGING OF THE TAX ON THE GROUND THAT THE TIME-LIMIT FOR PROCESSING HAD BEEN EXCEEDED ONLY BY A VERY SMALL MARGIN WAS IN BREACH OF THE PRINCIPLE OF PROPORTIONALITY .
5 THE FINANZGERICHT CONSIDERED THAT THERE WERE GROUNDS FOR DOUBTING THE VALIDITY OF THE PROVISION OF COMMUNITY LAW AT ISSUE AND REQUESTED THE COURT OF JUSTICE TO DELIVER A PRELIMINARY RULING ON THE QUESTION WHETHER ARTICLE 1 ( 3 ) OF COMMISSION REGULATION ( EEC ) NO 572/78 OF 21 MARCH 1978 IS INVALID IN SO FAR AS IT PROVIDES THAT THE SECURITY LODGED BY THE IMPORTER SHALL BE FORFEIT AND RETAINED AS A LEVY IF THE TIME-LIMIT LAID DOWN IN THAT PROVISION FOR THE PROPER PROCESSING OF FROZEN BEEF IS EXCEEDED , OR WHETHER THE REGULATION IS RATHER TO BE INTERPRETED , IN ACCORDANCE WITH THE TREATY , AS ALLOWING FOR THE SECURITY NOT TO BE FORFEIT IF THE PERIOD HAS BEEN EXCEEDED BY MERELY 12 DAYS .
6 ACCORDING TO THE PLAINTIFF IN THE MAIN ACTION ARTICLE 14 OF REGULATION NO 805/68 OF THE COUNCIL ON THE COMMON ORGANIZATION OF THE MARKET IN BEEF AND VEAL , AS AMENDED BY REGULATION NO 425/77 OF 14 FEBRUARY 1977 ( OFFICIAL JOURNAL 1977 , L 61 , P . 1 ), WHICH FORMS THE BASIS FOR COMMISSION REGULATION NO 572/78 , DOES NOT CONFER ON THE LATTER POWER TO FIX TIME-LIMITS INVOLVING FORFEITURE .
7 ARTICLE 14 ( 4 ) ( C ) PROVIDES THAT THE COMMISSION MUST DETERMINE DETAILED RULES FOR THE APPLICATION OF THE SUSPENSION OF THE LEVY ON FROZEN MEAT INTENDED FOR PROCESSING , AND PARTICULARLY THOSE CONCERNING CONTROL OF THE END USE OF IMPORTED MEAT . THE CONFERMENT OF THAT POWER , EXPRESSED IN GENERAL TERMS , IMPLIES THAT THE COMMISSION HAS THE RIGHT AND THE DUTY TO TAKE ALL APPROPRIATE MEASURES IN ORDER TO ENSURE THAT THE RULES LAID DOWN BY THE COUNCIL ARE IMPLEMENTED IN SUCH A WAY AS TO ATTAIN FULLY THE OBJECTIVES PURSUED BY SUCH RULES .
8 THE OBJECTIVES PURSUED BY THE COUNCIL IN ESTABLISHING SPECIAL ARRANGEMENTS FOR THE IMPORTATION OF CERTAIN BEEF INTENDED FOR PROCESSING WERE DEFINED IN THE SEVENTH RECITAL IN THE PREAMBLE TO THE BASIC REGULATION , REGULATION NO 805/68 OF THE COUNCIL . THAT RECITAL STATES THAT WHILST THE SUSPENSION OF THE LEVIES IS INTENDED TO GUARANTEE ADEQUATE SUPPLIES FOR THE PROCESSING INDUSTRIES IN THE COMMUNITY THAT MUST NOT BE AT THE EXPENSE OF THE FUNDAMENTAL PRINCIPLE OF PREFERENCE FOR COMMUNITY-PRODUCED MEAT . IN OTHER WORDS THE EXISTENCE AND EXTENT OF THE RIGHT TO THE SUSPENSION OF THE LEVY IN THIS FIELD DEPENDS DIRECTLY ON THE SITUATION AND DEVELOPMENT OF THE COMMUNITY MARKET .
9 SINCE THAT MARKET IS CAPABLE OF DEVELOPING RELATIVELY SWIFTLY IT IS NECESSARY TO BE ABLE TO ADAPT THE SPECIAL IMPORT ARRANGEMENTS TO MEET THAT DEVELOPMENT . FOR THAT PURPOSE REGULATION NO 805/68 OF THE COUNCIL , AS AMENDED BY REGULATION NO 425/77 , IN ADDITION PROVIDES IN ARTICLE 14 ( 4 ) ( A ) THAT THE QUANTITIES WHICH MAY BE IMPORTED UNDER SUSPENSION OF THE LEVY MUST BE DETERMINED BY THE COMMISSION ON A QUARTERLY BASIS . THAT PROVISION WOULD BE RENDERED NUGATORY IF IT WERE POSSIBLE FOR PROCESSING UNDERTAKINGS TO BUILD UP STOCKS WITH A VIEW TO SPECULATION SO THAT THEY COULD NULLIFY THE EFFECTS OF ANY RESTRICTION OR INDEED ABOLITION BY THE COMMISSION OF THE SPECIAL IMPORT ARRANGEMENTS INTENDED TO ENSURE THE PROTECTION OF THE COMMUNITY MARKET .
10 THE PROTECTION OF THE OBJECTIVES PURSUED BY THE COUNCIL IN THIS FIELD THUS JUSTIFIED THE COMMISSION IN PROVIDING IN THE IMPLEMENTING MEASURES THAT THE MEAT IMPORTED SUBJECT TO SUSPENSION OF THE LEVY MUST BE PROCESSED WITHIN A SPECIFIED PERIOD .
11 THE PLAINTIFF IN THE MAIN ACTION ALSO CLAIMS THAT THE WITHDRAWAL OF THE SUSPENSION WHERE THE PRESCRIBED PERIODS ARE EXCEEDED IS OUT OF PROPORTION TO THE GRAVITY OF THE SHORTCOMING , WHICH DOES NOT JEOPARDIZE THE OBJECTIVES PURSUED BY THE ARRANGEMENTS .
12 SUCH AN ARGUMENT IS BASED ON A MISTAKEN VIEW OF THE OBJECTIVES PURSUED BY THE ARRANGEMENTS IN QUESTION INASMUCH AS IT FAILS TO TAKE INTO CONSIDERATION THE NEED TO PRESERVE THE ROLE OF COMMUNITY PREFERENCE WHICH COULD NOT BE GUARANTEED , FOR THE REASONS GIVEN ABOVE , IF A TIME-LIMIT FOR PROCESSING WERE NOT PRESCRIBED FOR UNDERTAKINGS QUALIFYING FOR SUSPENSION OF THE LEVY ON IMPORTS . FAILURE TO CARRY OUT THE PROCESSING WITHIN THE PERIOD LAID DOWN THUS DIRECTLY JEOPARDIZES THE OBJECTIVES PURSUED BY THE SYSTEM AND THE PENALTY ATTACHED TO IT IS BY NO MEANS DISPROPORTIONATE .
13 FINALLY , THE PLAINTIFF COMPANY COMPLAINS THAT THE COMMISSION HAS MADE THE CHARGING OF THE LEVY AN AUTOMATIC CONSEQUENCE OF FAILURE TO OBSERVE THE TIME-LIMIT REGARDLESS OF THE EXTENT OF SUCH FAILURE AND IS THEREBY IN BREACH OF THE PRINCIPLE OF EQUALITY OF TREATMENT . HOWEVER , SUCH A COMPLAINT CANNOT BE UPHELD IN RELATION TO COMMISSION REGULATION ( EEC ) NO 572/78 SINCE THE REGULATION EXCLUDES THE APPLICATION OF THE CONTESTED PROVISION IN CASE OF FORCE MAJEURE AND LIMITS , IN ARTICLE 1 ( 1 ) ( C ), THE BASIS FOR THE CALCULATION OF THE LEVY TO BE CHARGED EXCLUSIVELY TO PRODUCTS WHICH ARE NOT PROCESSED WITHIN THE PRESCRIBED PERIOD .
14 SINCE CONSIDERATION OF THE QUESTION SUBMITTED HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF THE PROVISION IN QUESTION THE REPLY TO BE GIVEN TO THE FINANZGERICHT HAMBURG SHOULD BE THAT ARTICLE 1 ( 3 ) OF REGULATION NO 572/78 IS NOT INVALID IN PROVIDING THAT THE SECURITY LODGED BY THE IMPORTER MUST BE FORFEIT AND RETAINED AS LEVY WHEN THE PERIOD PRESCRIBED BY THAT PROVISION FOR THE DUE PROCESSING OF THE FROZEN BEEF IS EXCEEDED .