1. This reference for a preliminary ruling concerns the interpretation of provisions of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (OJ 1992 L 302, p. 1), as amended by Regulation (EC) No 955/1999 of the European Parliament and of the Council of 13 April 1999 (OJ 1999 L 119, p. 1) (‘the Customs Code’), of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Regulation No 2913/92 (OJ 1993 L 253, p. 1), as amended by Commission Regulation (EC) No 1662/1999 of 28 July 1999 (OJ 1999 L 197, p. 25) (‘the Implementing Regulation’), of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (OJ 1992 L 76, p. 1), as amended by Council Directive 96/99/EC of 30 December 1996 (OJ 1997 L 8, p. 12) (‘the Excise Duty Directive’), and of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1), as amended by Council Directive 1999/85/EC of 22 October 1999 (OJ 1999 L 277, p. 34) (‘the Sixth Directive’).
2. The reference was made in the context of a dispute between Dansk Transport og Logistik (‘DTL’) and the Skatteministeriet (Danish Ministry of Taxation) concerning the levying of customs duty, excise duty and value added tax (‘VAT’) claimed by the customs and tax authorities on cigarettes in connection with TIR transport operations for which DTL had issued TIR carnets and acted as guarantor. Legal context The provisions applicable to TIR transit
3. The Customs Convention on the International Transport of Goods under Cover of TIR Carnets (‘the TIR Convention’), signed in Geneva on 14 November 1975, was approved on behalf of the Community by Council Regulation (EEC) No 2112/78 of 25 July 1978 (OJ 1978 L 252, p. 1). The convention entered into force for the Community on 20 June 1983 (OJ 1983 L 31, p. 13).
4. Article 4 of the TIR Convention provides that ‘[g]oods carried under the TIR procedure shall not be subjected to the payment or deposit of import or export duties and taxes at customs offices en route’.
5. Article 5 of that convention is worded as follows: ‘1. Goods carried under the TIR procedure in sealed road vehicles, combinations of vehicles or containers shall not as a general rule be subjected to examination at customs offices en route. 2. However, to prevent abuses, customs authorities may in exceptional cases, and particularly when irregularity is suspected, carry out an examination of the goods at such offices.’
6. Article 6(1) of the TIR Convention states that, ‘[s]ubject to such conditions and guarantees as it shall determine, each Contracting Party may authorise associations to issue TIR carnets, either directly or through corresponding associations, and to act as guarantors’.
7. Article 37 of the TIR Convention states that, ‘[w]hen it is not possible to establish in which territory an irregularity was committed, it shall be deemed to have been committed in the territory of the Contracting Party where it is detected’. Community legislation Customs legislation
8. According to Article 4(16)(c) of the Customs Code, the customs procedure includes customs warehousing, inter alia.
9. Article 84(1)(a) of that code, which forms part of point A, entitled ‘Provisions common to several procedures’, of Section 3 concerning suspensive arrangements and customs procedures with economic impact, provides, inter alia, that, ‘where the term “suspensive arrangement” is used [in Articles 85 to 90], it is understood as applying, in the case of non-Community goods, to … customs warehousing’.
10. Article 98 of the Customs Code states: ‘1. The customs warehousing procedure shall allow the storage in a customs warehouse of: (a) non-Community goods, without such goods being subject to import duties or commercial policy measures; … 2. Customs warehouse means any place approved by and under the supervision of the customs authorities where goods may be stored under the conditions laid down. …’
11. Under Article 202 of that code: ‘1. A customs debt on importation shall be incurred through: (a) the unlawful introduction into the customs territory of the Community of goods liable to import duties, or … For the purpose of this Article, unlawful introduction means any introduction in violation of the provisions of Articles 38 to 41 and the second indent of Article 177. 2. The customs debt shall be incurred at the moment when the goods are unlawfully introduced. …’
12. Under Article 215 of the Customs Code: ‘1. A customs debt shall be incurred: - at the place where the events from which it arises occur, - if it is not possible to determine that place, at the place where the customs authorities conclude that the goods are in a situation in which a customs debt is incurred, … 3. The customs authorities referred to in Article 217(1) are those of the Member State where the customs debt is incurred or is deemed to have been incurred in accordance with this Article. …’
13. Article 217(1) of the Customs Code states that ‘[e]ach and every amount of import duty or export duty resulting from a customs debt, hereinafter called “amount of duty”, shall be calculated by the customs authorities as soon as they have the necessary particulars, and entered by those authorities in the accounting records or on any other equivalent medium (entry in the accounts)’.
14. According to Article 233 of that code: ‘Without prejudice to the provisions in force relating to the time-barring of a customs debt and non-recovery of such a debt in the event of the legally established insolvency of the debtor, a customs debt shall be extinguished: ... (c) where, in respect of goods declared for a customs procedure entailing the obligation to pay duties: … - the goods, before their release, are either seized and simultaneously or subsequently confiscated, destroyed on the instructions of the customs authorities, destroyed or abandoned in accordance with Article 182, or destroyed or irretrievably lost as a result of their actual nature or of unforeseeable circumstances or force majeure ; (d) where goods in respect of which a customs debt is incurred in accordance with Article 202 are seized upon their unlawful introduction and are simultaneously or subsequently confiscated. In the event of seizure and confiscation, the customs debt shall, none the less for the purposes of the criminal law applicable to customs offences, be deemed not to have been extinguished where, under a Member State’s criminal law, customs duties provide the basis for determining penalties or the existence of a customs debt is grounds for taking criminal proceedings.’
15. Article 454 of the Implementing Regulation contains, inter alia, certain provisions specific to the TIR Convention and provides: ‘1. This Article shall apply without prejudice to the specific provisions of the TIR … [Convention] concerning the liability of the guaranteeing associations when a TIR … carnet is being used. 2. Where it is found that, in the course of or in connection with a transport operation carried out under cover of a TIR carnet …, an offence or irregularity has been committed in a particular Member State, the recovery of duties and other charges which may be payable shall be effected by that Member State in accordance with Community or national provisions, without prejudice to the institution of criminal proceedings. 3. Where it is not possible to determine in which territory the offence or irregularity was committed, such offence or irregularity shall be deemed to have been committed in the Member State where it was detected unless, within the period laid down in Article 455(1), proof of the regularity of the operation or of the place where the offence or irregularity was actually committed is furnished to the satisfaction of the customs authorities. …’
16. Article 867a of the Implementing Regulation is worded as follows: ‘1. Non-Community goods which have been abandoned to the Exchequer or seized or confiscated shall be considered to have been entered for the customs warehousing procedure. 2. The goods referred to in paragraph 1 may be sold by the customs authorities only on the condition that the buyer immediately carries out the formalities to assign them a customs-approved treatment or use. …’ The Excise Duty Directive
17. Article 4 of the Excise Duty Directive defines ‘suspension arrangement’ as ‘a tax arrangement applied to the production, processing, holding and movement of products, excise duty being suspended’.
18. Under Article 5(1) and (2) of that directive: ‘1. The products referred to in Article 3(1) shall be subject to excise duty at the time of their production within the territory of the Community as defined in Article 2 or of their importation into that territory. “Importation of a product subject to excise duty” shall mean the entry of that product into the territory of the Community … However, where the product is placed under a Community customs procedure on entry into the territory of the Community, importation shall be deemed to take place when it leaves the Community customs procedure. 2. Without prejudice to national and Community provisions regarding customs matters, when products subject to excise duty: - are coming from, or going to, third countries … and are placed under one of the customs suspensive procedures listed in Article 84(1)(a) of [the Customs Code] or in a free zone or a free warehouse, … the excise duty on them shall be deemed to be suspended. …’
19. Article 6 of that directive states: ‘1. Excise duty shall become chargeable at the time of release for consumption or when shortages are recorded which must be subject to excise duty in accordance with Article 14(3). Release for consumption of products subject to excise duty shall mean: (a) any departure, including irregular departure, from a suspension arrangement; … (c) any importation of those products, including irregular importation, where those products have not been placed under a suspension arrangement. 2. The chargeability conditions and rate of excise duty to be adopted shall be those in force on the date on which duty becomes chargeable in the Member State where release for consumption takes place or shortages are recorded. Excise duty shall be levied and collected according to the procedure laid down by each Member State, it being understood that Member States shall apply the same procedures for levying and collection to national products and to those from other Member States.’
20. Article 7 of the Excise Duty Directive states: ‘1. In the event of products subject to excise duty and already released for consumption in one Member State being held for commercial purposes in another Member State, the excise duty shall be levied in the Member State in which those products are held. 2. To that end, without prejudice to Article 6, where products already released for consumption as defined in Article 6 in one Member State are delivered or intended for delivery in another Member State or used in another Member State for the purposes of a trader carrying out an economic activity independently or for the purposes of a body governed by public law, excise duty shall become chargeable in that other Member State. 3. Depending on all the circumstances, the duty shall be due from the person making the delivery or holding the products intended for delivery or from the person receiving the products for use in a Member State other than the one where the products have already been released for consumption, or from the relevant trader or body governed by public law. …’
21. Article 8 of the Excise Duty Directive provides that, ‘[a]s regards products acquired by private individuals for their own use and transported by them, the principle governing the internal market lays down that excise duty shall be charged in the Member State in which they are acquired’.
22. Article 9(1) of that directive reads as follows: ‘Without prejudice to Articles 6, 7 and 8, excise duty shall become chargeable where products for consumption in a Member State are held for commercial purpose in another Member State. In this case, the duty shall be due in the Member State in whose territory the products are and shall become chargeable to the holder of the products.’ The Sixth Directive
23. Article 7 of the Sixth Directive provides: ‘1. “Importation of goods” shall mean: (a) the entry into the Community of goods which do not fulfil the conditions laid down in Articles 9 and 10 of the Treaty establishing the European Economic Community … … 2. The place of import of goods shall be the Member State within the territory of which the goods are when they enter the Community. 3. Notwithstanding paragraph 2, where goods referred to in paragraph 1(a) are, on entry into the Community, placed under one of the arrangements referred to in Article 16(1)(B)(a), (b), (c) and (d), under arrangements for temporary importation with total exemption from import duty or under external transit arrangements, the place of import of such goods shall be the Member State within the territory of which they cease to be covered by those arrangements. …’
24. Article 10(3) of that directive states: ‘The chargeable event shall occur and the tax shall become chargeable when the goods are imported. Where goods are placed under one of the arrangements referred to in Article 7(3) on entry into the Community, the chargeable event shall occur and the tax shall become chargeable only when the goods cease to be covered by those arrangements. However, where imported goods are subject to customs duties, to agricultural levies or to charges having equivalent effect established under a common policy, the chargeable event shall occur and the tax shall become chargeable when the chargeable event for those Community duties occurs and those duties become chargeable. Where imported goods are not subject to any of those Community duties, Member States shall apply the provisions in force governing customs duties as regards the occurrence of the chargeable event and the moment when the tax becomes chargeable.’
25. Article 16 of the Sixth Directive, in the version resulting from Article 28c(E)(1) thereof, is worded as follows: ‘1. Without prejudice to other Community tax provisions, Member States may, subject to the consultations provided for in Article 29, take special measures designed to exempt all or some of the following transactions, provided that they are not aimed at final use and/or consumption and that the amount of value added tax due on cessation of the arrangements [or] situations referred to at A to E corresponds to the amount of tax which would have been due had each of these transactions been taxed within the territory of the country: … B. supplies of goods which are intended to be: … (c) placed under customs warehousing arrangements or inward processing arrangements; … The places referred to in (a), (b), (c) and (d) shall be as defined by the Community customs provisions in force; …’ National legislation Legislation on customs duties
26. The Customs Law (Toldloven), in the version of Consolidated Law No 113 of 27 February 1996, as amended (‘the Customs Law’), lays down, in Paragraph 83, the procedures relating to the treatment of goods in the case of smuggling or attempted smuggling.
27. Under the first sentence of Paragraph 83(1) of that law, goods discovered in connection with smuggling or attempted smuggling, including goods on which a traveller evades or attempts to evade import duties, are to be ‘detained’ by the State customs and tax authorities or by the police. Under the second sentence of Paragraph 83(1), smuggled goods and other goods in respect of which customs duties or taxes are evaded or an attempt is made to evade customs duties or taxes are to be ‘detained or seized’ by the relevant authorities, subject to the rules on seizure in Chapter 75b of the Danish Code of Civil Procedure.
28. Paragraph 83(2) of the Customs Law is worded as follows: ‘Where an amount of customs duty, tax or fine owed or the costs of proceedings are paid, goods which have been detained or seized shall be returned, subject to the general rules on imports, to the person from whom they were detained or seized, or to another person who proves that he is entitled to the goods. If the goods are not claimed within two months after the end of the month in which the case is definitively resolved, they shall be sold off by the State customs and tax authorities at a duly advertised public auction. Goods which, in the view of the State customs and tax authorities, are unmarketable or unsaleable may, however, be destroyed under customs supervision after the specified period has expired. The amount raised from the auction shall be used first to cover the costs incurred by the public authorities in storing and selling the goods and then the amount of customs duty, tax or fine owed and the costs of proceedings. Any surplus shall be paid to the owner, provided that he comes forward within three years after the auction and duly proves his ownership of the goods that have been sold off.’ Legislation governing excise duty on tobacco
29. Under Paragraph 2(1) of the Law on excise duty on tobacco (Tobaksafgiftsloven), in the version of Consolidated Law No 635 of 21 August 1998, as amended, excise duty due on goods for consumption in Denmark was to be paid at the latest when the goods subject to duty were received from abroad.
30. Paragraph 12(1) of that law states that ‘duty is to be paid on goods subject to duty imported from places outside the European Union ...’.
31. According to the order for reference, that law does not contain any detailed rules on tax treatment in connection with the smuggling or attempted smuggling of tobacco goods or on the seizure, confiscation or destruction of those goods. VAT legislation
32. Under Paragraph 12(1) of the Law on VAT (Momsloven), in the version of Consolidated Law No 422 of 2 June 1999, as amended, VAT is to be paid on goods imported into Denmark from places outside the European Union. Paragraph 12(2) of that law provides that where goods are, on importation, stored in Copenhagen’s Free Port, in a free warehouse or in a customs warehouse, the tax becomes chargeable only when the goods cease to be covered by one of those arrangements.
33. The first sentence of Paragraph 26 of the Law on VAT states that the tax becomes chargeable upon importation of the goods. The second sentence of that paragraph provides that the tax becomes chargeable on goods under one of the arrangements referred to in Paragraph 12(2) of the Law on VAT only when they cease to be covered by the arrangement concerned.
34. According to the order for reference, that law contains no detailed rules on tax treatment in connection with the smuggling or attempted smuggling of tobacco goods or on the seizure, confiscation or destruction of those goods. The disputes in the main proceedings and the questions referred for a preliminary ruling
35. Pursuant to an authorisation from the Danish customs and tax authorities granted under Article 6 of the TIR Convention, DTL is entitled to issue TIR carnets and act as the guarantor association in connection with TIR transport operations.
36. The referring court is hearing three disputes relating to customs and tax debts in connection with the smuggling of cigarettes in the course of TIR operations, for which DTL had issued TIR carnets and acted as guarantor. In two of the cases in the main proceedings, the goods were transported to Denmark by sea and, in the third case, by land.
37. The introduction, by sea, of the goods into Community customs territory was discovered by the local customs and tax authorities on 2 May 2000. Two lorries crossed the Danish border, on board a ferry from Klaipeda, in Lithuania, which at the time of the facts in the main proceedings was not yet a Member State of the European Union. When the ferry docked in Åbenrå, those lorries were inspected by the abovementioned authorities, following which they found a large quantity of cigarettes hidden in the semi-trailers which were not enumerated in the TIR carnets.
38. The introduction of the goods by land was discovered by the local customs and tax authorities on 11 October 2000. A Lithuanian lorry arrived in Frøslev, a Danish town on the border between Denmark and Germany, where those authorities discovered, in addition to the goods mentioned in the TIR carnets, a large quantity of cigarettes hidden in the semi-trailer. Those goods were brought illegally into Community customs territory when crossing the border between Poland, which at the time of the facts in the main proceedings was not yet a Member State of the European Union, and Germany. They were then transported from Germany to Denmark, without being detected by the German authorities. The seals of the lorry and the semi-trailer were not broken until the customs check carried out in Denmark.
39. In all the cases in the main proceedings the customs authorities immediately detained the cigarettes, in accordance with the first sentence of Paragraph 83(1) of the Customs Law. The cigarettes remained in the possession of those authorities from their seizure to their destruction between November 2004 and March 2005.
40. By letters sent between December 2001 and August 2002, those authorities sought from the transporters, namely the Lithuanian undertakings whose names the TIR carnets were in, payment of customs duty, excise duty and VAT in respect of the smuggled cigarettes.
41. Since those undertakings did not reply to those letters, the customs and tax authorities decided, on 4 February 2003 in two of the cases in the main proceedings and on 16 April 2002 in the third case, that DTL, as the association acting as guarantor under the TIR Convention, was required to pay the sum corresponding to its maximum liability under the TIR carnets which it had issued for those transport operations. DTL brought an action against those decisions before the Landsskatteret (Tax Court), which upheld them.
42. DTL then lodged an appeal against that judgment before the Østre Landsret (Eastern Regional Court) and paid, on a conditional basis, the sum sought in two of the cases in the main proceedings, but did not pay the sum sought in relation to the third case.
43. The referring court considers that Paragraph 83 of the Customs Law does not expressly state whether the customs and tax debt relating to the smuggled goods exists and may be recovered where the goods are detained, seized or destroyed in accordance with that provision.
44. In those circumstances, the Østre Landsret decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling: ‘(1) Is the expression “seized and simultaneously or subsequently confiscated” in point (d) of [the first paragraph] of Article 233 of the Customs Code to be interpreted as meaning that the provision covers situations where goods detained under … Paragraph 83(1) of the Customs Law on unlawful introduction are simultaneously or subsequently destroyed by the authorities without their having left the authorities’ possession? (2) Is the Excise Duty Directive to be interpreted as meaning that unlawfully introduced goods which are seized on importation and simultaneously or subsequently destroyed by the authorities are to be regarded as placed under “a suspension arrangement” with the effect that the excise duty is not incurred or is extinguished (see the first subparagraph of Article 5(2) and Article 6(1)(c) of the Excise Duty Directive, read in conjunction with Articles 84(1)(a) and 98 of the Customs Code, and Article 867a of the [I]mplementing [Regulation])? Is the answer affected by whether or not a customs debt incurred on such unlawful introduction is extinguished under point (d) of [the first paragraph of] Article 233 of the Customs Code? (3) Is the Sixth Directive to be interpreted as meaning that unlawfully introduced goods seized on importation and simultaneously or subsequently destroyed by the authorities are to be regarded as being placed under a “customs warehousing procedure” with the effect that the VAT debt is not incurred or is extinguished (see Articles 7(3), 10(3) and 16(1)(B)(c) of the Sixth Directive and Article 867a of the [I]mplementing [Regulation])? Is the answer affected by whether or not a customs debt incurred on such unlawful introduction is extinguished under point (d) of [the first paragraph of] Article 233 of the Customs Code? (4) Are the Customs Code, the [I]mplementing [Regulation], [the Excise Duty Directive] and the Sixth Directive to be interpreted as meaning that the customs authorities in the Member State where unlawful introduction of goods during a TIR operation is detected are competent to charge customs duty, excise duty and VAT on the operation where the authorities in another Member State, where the unlawful introduction into the Community occurred, did not detect the irregularity and consequently did not charge customs duty, excise duty and VAT (see Article 215 in conjunction with Article 217 of the Customs Code, Article 454(2) and (3) of the [I]mplementing [Regulation] then in force, [Article 7(1) of the Excise Duty Directive] and Article 7 of the Sixth Directive)?’ The questions referred The first question
45. By its first question, the referring court asks, in essence, whether a situation in which goods which are detained by the local customs and tax authorities on their unlawful introduction into the customs territory of the Community and simultaneously or subsequently destroyed by those authorities, without having left their possession, is covered by the concept of goods which are ‘seized and simultaneously or subsequently confiscated’ in point (d) of the first paragraph of Article 233 of the Customs Code.
46. DTL, the Netherlands and Italian Governments and the Commission of the European Communities consider that that concept should be applied to goods in such a situation, with the result that, pursuant to point (d) of the first paragraph of Article 233 of the Customs Code, the customs debt is extinguished in relation to those goods. The Danish Government argues to the contrary, claiming that confiscation, within the meaning of that provision of the Customs Code, cannot be assimilated to the destruction of the goods in accordance with Paragraph 83(1) of the Customs Law.
47. It should be noted, at the outset, that, pursuant to point (d) of the first paragraph of Article 233 of the Customs Code, the customs debt is extinguished if the goods in respect of which that debt arises, in accordance with Article 202 of that code, are seized on their unlawful introduction into the customs territory of the Community and are simultaneously or subsequently confiscated.
48. First, as regards the interpretation of t he expression ‘on unlawful introduction’ of goods into the customs territory of the Community, in Article 202 and point (d) of the first paragraph of Article 233 of the Customs Code, it should be noted, first of all, that the unlawful introduction is completed at the moment at which the goods go beyond the first customs office situated inside that territory without those goods having been presented there (Case C‑459/07 Elshani [2009] ECR I‑0000, paragraph 25).
49. Consequently, goods are the subject of an ‘unlawful introduction’ into the customs territory of the Community within the meaning of Article 202 of the Customs Code where, having crossed the external land border of the Community, the goods are in that territory beyond the first customs office, without having been conveyed to that office and without having been presented to customs, with the result that the customs authorities have not been notified of the fact that those goods have been introduced by the persons responsible for compliance with that obligation ( Elshani , paragraph 26).
50. Next, the Court has held that Article 202 and point (d) of the first paragraph of Article 233 of the Customs Code must be interpreted as meaning that, in order to lead to the extinction of the customs debt, the seizure of goods unlawfully introduced into the customs territory of the Community must take place before those goods go beyond the first customs office situated inside that territory (see, to that effect, Elshani , paragraph 38).
51. That analysis is justified, in the first place, by the fact that the seizure and confiscation of goods upon their unlawful introduction, laid down in point (d) of the first paragraph of Article 233 of the Customs Code, constitutes a ground for the extinction of the customs debt which must be narrowly construed (see Elshani , paragraph 30). That article addresses the need to protect the Community’s own resources and that objective may not be prejudiced by creating new grounds for the extinction of a customs debt (see, to that effect, Case C‑112/01 SPKR [2002] ECR I‑10655, paragraph 31, and Elshani , paragraph 31).
52. In the second place, the presence of unlawfully introduced goods in the customs territory of the Community comprises, of itself, a very high risk that those goods will end up forming part of the economic networks of the Member States and that, once those goods have gone beyond the area in which the first customs office is situated inside the customs territory, there is less likelihood that the customs authorities will, fortuitously, discover those goods in the course of spot checks ( Elshani , paragraph 32).
53. Consequently, the seizure of such goods, together with their simultaneous or subsequent confiscation within the meaning of point (d) of the first paragraph of Article 233 of the Customs Code, can only lead to the extinction of the customs debt if that seizure was executed before those goods went beyond the area in which the first customs office is situated inside the customs territory of the Community.
54. Finally, contrary to what the Danish Government claims, that interpretation is also transposable to goods transported with a TIR carnet.
55. In that regard, while it is indeed apparent, first, from Article 4 of the TIR Convention that goods carried under the TIR procedure will not be made subject to the payment or deposit of import or export duties and taxes at customs offices en route and, second, from Article 5 of that convention that those goods will not, as a general rule, be made subject to examination at customs offices en route, it is none the less the case that, when goods are introduced into the customs territory of the Community, the TIR carnet is generally inspected at the customs office at the external border of the Community. At that point, the customs seals are also checked.
56. In addition, as stated by the Advocate General in point 102 of her Opinion, even in relation to transport operations with a TIR carnet, once the goods which have been introduced unlawfully into the customs territory of the Community have gone beyond the area in which the first customs office inside that territory is situated, it is less likely that they will, fortuitously, be discovered in the course of spot checks. Consequently, there is a high risk that such goods will end up forming part of the economic networks of the Member States.
57. Consequently, even in relation to goods transported with a TIR carnet, pursuant to point (d) of the first paragraph of Article 233 of the Customs Code, the customs debt is extinguished only if the seizure of the goods was executed before those goods went beyond the area in which the first customs office is situated inside the customs territory of the Community.
58. In the present case, as regards the two cases in which the goods were introduced into the customs territory of the Community by sea, it seems that the goods were detained by the local customs and tax authorities on their unlawful introduction into that territory, in accordance with point (d) of the first paragraph of Article 233 of the Customs Code. Thus, it appears that those cases fall within that situation.
59. As regards the case in which the goods were transported to Denmark by land, it is apparent from the order for reference that the unlawful introduction into the customs territory of the Community took place when the border between Poland and Germany was crossed. The detainment and destruction of those goods occurred at the crossing of the border between Germany and Denmark, namely after the ‘unlawful introduction’ and not at the same point in time. Consequently, it would appear that the facts in that case do not fall within the situation envisaged in point (d) of the first paragraph of Article 233 of the Customs Code.
60. Second, in so far as concerns the interpretation of the terms ‘seizure’ and ‘confiscation’ for the purposes of point (d) of the first paragraph of Article 233 of the Customs Code, DTL considers that seizure and confiscation are successive measures and that confiscation is a more restrictive measure than seizure. By contrast, according to the Danish Government, that provision makes the extinction of the customs debt subject to both the seizure and the confiscation of the unlawfully introduced goods.
61. In that regard, it should be noted that, even if they are two separate measures, they may in practice take place simultaneously. As the Advocate General stated in point 110 of her Opinion, ‘seizure’ of the goods for the purposes of point (d) of the first paragraph of Article 233 of the Customs Code is to be understood as action by the competent authorities to assume actual physical control of the goods in order to keep them safe and prevent them from physically entering the economic networks of the Member States.
62. As regards the question whether the destruction of the goods may be regarded as ‘confiscation’ for the purposes of point (d) of the first paragraph of Article 233 of the Customs Code, DTL, the Netherlands Government and the Commission argue that confiscation implies the loss of the owner’s right of ownership of the goods and that the possible acquisition of the ownership of those goods by the authorities is irrelevant. DTL considers, in particular, that confiscation takes place at the moment when the original owner loses his property right over the seized goods. The Danish Government states, by contrast, that confiscation presupposes a transfer of property to the State. In the cases in the main proceedings, the Danish State did not become the owner of the detained goods at any point.
63. It should be noted, in that regard, that point (d) of the first paragraph of Article 233 of the Customs Code, first, does not make any reference to a possible transfer of ownership of the goods and, second, relates exclusively to the definitive withdrawal of the original owner’s power to dispose of the goods and to preventing the marketing of those goods without tax being paid on them in the economic network of the Community. Since the destruction of such goods under State supervision definitively prevents them from entering the economic network, it does not matter whether the State acquires ownership of the seized goods or not.
64. Finally, contrary to what the Danish Government argues, that assessment is not precluded by the fact that, in the second indent of point (c) of the first paragraph of Article 233 of the Customs Code, the destruction of the goods is set out separately from the seizure and confiscation of those goods, or even the fact that point (d) of the first paragraph of Article 233 of the Customs Code refers only to confiscation.
65. The second indent of point (c) of the first paragraph of Article 233 of the Customs Code covers situations in which goods declared for a customs procedure remain at the disposal of the importer, by providing for grounds for extinction of the customs debt also in respect of declared goods which are not at the disposal of the customs authorities and which are destroyed on their instruction. By contrast, point (d) of the first paragraph of Article 233 of the Customs Code refers only to goods which are not at the importer’s disposal.
66. It follows from the above that the answer to the first question is that a situation in which goods which are detained by the local customs and tax authorities when introduced into the customs territory of the Community in the area in which the first customs office is situated at the external border of the Community, and are simultaneously or subsequently destroyed by those authorities, without having left their possession, is covered by the concept of goods which are ‘seized and simultaneously or subsequently confiscated’ in point (d) of the first paragraph of Article 233 of the Customs Code, with the result that the customs debt is extinguished pursuant to that provision. The second question
67. By its second question, the referring court asks, in essence, whether, where goods are seized on their introduction into the territory of the Community and simultaneously or subsequently destroyed by the competent authorities, the excise duty on those goods is deemed ‘to have been placed under a suspension arrangement’, for the purposes of the first subparagraph of Article 5(2) and Article 6(1)(c) of the Excise Duty Directive, read in conjunction with Articles 84(1)(a) and 98 of the Customs Code, and Article 867a of the Implementing Regulation, with the result that the obligation to pay excise duty on them is not incurred or is extinguished.
68. That court also asks whether the answer to that question is affected by whether or not the customs debt incurred on such an importation is extinguished for the purposes of point (d) of the first paragraph of Article 233 of the Customs Code.
69. In order to assess the effect of the detainment and destruction of the goods on the incurrence of the excise duty debt, it needs first to be determined whether the chargeable event under Article 5(1) of the Excise Duty Directive occurred. Only afterwards do the issues arise of the chargeability and possible suspension of the excise duty under Articles 6(1) and 5(2) of that directive, respectively.
70. First, as regards the chargeable event for excise duty, it is apparent from the first subparagraph of Article 5(1) of the Excise Duty Directive that the duty becomes chargeable at the time of the production of the goods subject to excise duty within the territory of the Community or on the importation of such goods into that territory. The second subparagraph of Article 5(1) states that ‘importation’ is to mean ‘the entry of that product into the territory of the Community’.
71. In order to ensure a coherent interpretation of the Community legislation at issue, the latter term must be interpreted in the light of the concept of ‘introduction’ set out in point (d) of the first paragraph of Article 233 of the Customs Code.
72. Accordingly, goods subject to excise duty must be regarded as having entered the territory of the Community for the purposes of Article 5(1) of the Excise Duty Directive as of the moment they go beyond the area in which the first customs office is situated inside the customs territory of the Community (see, by analogy, Elshani , paragraph 25).
73. In circumstances such as those at issue in the two cases in the main proceedings in which goods transported by sea were seized and subsequently destroyed by the local customs and tax authorities before going beyond the first customs office situated inside the territory of the Community, it appears that those goods were not imported into the territory of the Community, with the result that the chargeable event for excise duty, laid down in Article 5(1) of the Excise Duty Directive, did not occur. Consequently, those goods cannot be made subject to excise duty.
74. If, on the other hand, such goods are seized and destroyed by the authorities after going beyond the first border customs office situated inside the territory of the Community, they must be regarded as having been imported into the Community with the result that the chargeable event for excise duty has occurred in relation to those goods, in accordance with Article 5(1) of the Excise Duty Directive. That seems to be the case for the goods at issue in the case in the main proceedings in which the unlawful introduction into the territory of the Community took place in Germany, whereas the subsequent seizure and destruction of those goods took place in Denmark.
75. Second, it should be noted, as regards the question whether and at what point the excise duty, in respect of which the chargeable event is the introduction of goods into the territory of the Community, becomes chargeable, that it is apparent from Article 6(1) of the Excise Duty Directive that that tax becomes chargeable, inter alia, at the time those goods are released for consumption. Point (c) of the second subparagraph of Article 6(1) states that release for consumption includes ‘any importation of those products, including irregular importation, where those products have not been placed under a suspension arrangement’.
76. As noted in paragraphs 71 and 72 above, the concept of ‘importation’ of goods for the purposes of the Excise Duty Directive presupposes that the goods have gone beyond the area in which the first customs office inside the customs territory of the Community is situated.
77. Third, as regards the goods at issue in the case in the main proceedings in which those goods were transported by land, the referring court asks whether the chargeability of the excise duty can be suspended under Article 5(2) of the Excise Duty Directive, on the ground that the goods which were seized and confiscated after their unlawful introduction into the customs territory of the Community have been entered for the customs warehousing procedure in accordance with Article 867a of the Implementing Regulation.
78. In that regard, it should be noted that the suspension arrangement defined in Article 4(c) of the Excise Duty Directive is the tax arrangement applied to the production, processing, holding and movement of products, excise duty being suspended. It is a feature of that arrangement that the excise duty on the products covered by it is not yet payable, although the chargeable event for taxation purposes has already taken place (Case C‑395/00 Cipriani [2002] ECR I‑11877, paragraph 42). Consequently, as regards the products subject to excise duty, that arrangement postpones the chargeability of excise duty until one of the conditions of chargeability is met.
79. It is true that it is apparent from Article 5(2) of the Excise Duty Directive that the suspension of the duty presupposes that the goods introduced unlawfully are under one of the customs suspensive procedures listed in Article 84(1)(a) of the Customs Code, one of which is customs warehousing.
80. However, it is apparent from paragraphs 75 and 76 above that, in the cases in the main proceedings, the duty became chargeable as soon as the goods went beyond the area in which the first customs office inside the customs territory of the Community is situated.
81. Accordingly, smuggled goods which were imported unlawfully in that way are to be regarded as having been released for consumption, with the result that the fact that they were subsequently entered for a customs warehousing procedure in accordance with Article 867a of the Implementing Regulation, following their seizure and confiscation, has no effect on the chargeability of the excise duty.
82. Article 867a of the Implementing Regulation, read in conjunction with Article 84(1)(a) of the Customs Code and the first subparagraph of Article 5(2) of the Excise Duty Directive, cannot impede the chargeability of the duty which results from point (c) of the second subparagraph of Article 6(1) of that directive.
83. Finally, as regards the question whether the extinction of the customs debt under point (d) of the first paragraph of Article 233 of the Customs Code affects whether the excise duty incurred on those goods is extinguished, the Excise Duty Directive does not contain any express provision concerning the extinction of the excise duty in the case of unlawful importation of goods.
84. In those circumstances, given the similarities between customs duties and excise duties in that they arise from the importation of goods into the Community and their subsequent distribution through the economic channels of the Member States, and in order to ensure a coherent interpretation of the Community legislation at issue, it must be found that excise duty is extinguished in the same way as customs duty.
85. Consequently, as is apparent from paragraph 50 above, in order to lead to the extinction of the excise duty, the seizure or the confiscation of the goods must take place before those goods go beyond the area in which the first customs office inside the customs territory of the Community is situated.
86. Therefore, the answer to the second question is that the third subparagraph of Article 5(1) and Article 6(1) of the Excise Duty Directive must be interpreted as meaning that goods seized by the local customs and tax authorities on their introduction into the territory of the Community and simultaneously or subsequently destroyed by those authorities, without having left their possession, must be regarded as not having been imported into the Community, with the result that the chargeable event for excise duty on them does not occur. Where goods are seized after their unlawful introduction into that territory, namely once they have gone beyond the area in which the first customs office inside that territory is situated, and simultaneously or subsequently destroyed by those authorities, without having left their possession, the excise duty on them is not to be deemed ‘to have been placed under a suspension arrangement’ for the purposes of the first subparagraph of Article 5(2) and Article 6(1)(c) of the Excise Duty Directive, read in conjunction with Articles 84(1)(a) and 98 of the Customs Code, and Article 867a of the Implementing Regulation, with the result that the chargeable event for excise duty on those goods occurs and, consequently, the excise duty on them becomes chargeable. The third question
87. By its third question, the referring court asks, in essence, whether Articles 7(3), 10(3) and 16(1)(B)(c) of the Sixth Directive read in conjunction with Article 867a of the Implementing Regulation must be interpreted as meaning that goods which are seized by the local customs and tax authorities either on their importation into the Community or thereafter, and are simultaneously or subsequently destroyed by those authorities, without having left their possession, must be regarded as having been placed under a customs warehousing procedure, so that the chargeable event for VAT does not occur and that tax does not become chargeable.
88. That court also asks whether the answer to that question is affected by whether or not the customs debt incurred on such an unlawful importation is extinguished for the purposes of point (d) of the first paragraph of Article 233 of the Customs Code.
89. In the first place, as regards the chargeable event for, and the chargeability of, VAT on goods unlawfully introduced into the Community, it must be noted that, in accordance with Article 2(2) of the Sixth Directive, ‘importation’ is subject to VAT. According to Article 7(1)(a) of that directive, importation is constituted by the ‘entry into the Community’ of the relevant goods.
90. Next, the second subparagraph of Article 10(3) of the Sixth Directive states that, where imported goods are subject inter alia, to customs duties, ‘the chargeable event shall occur and the tax shall become chargeable when the chargeable event for those … duties occurs and those duties become chargeable’.
91. In addition, according to the Court’s case-law on the applicability of the Sixth Directive to the unlawful importation of drugs, the chargeable event for customs duties and the chargeability of VAT are essentially the same in such cases. The two charges display comparable essential features since they arise from the importation of goods into the Community and their subsequent distribution through the economic channels of the Member States (see, to that effect, Case 294/82 Einberger [1984] ECR 1177, paragraph 18, and Case C‑343/89 Witzemann [1990] ECR I‑4477, paragraph 18).
92. In that regard, and taking account of what has been stated in paragraph 48 above, the second subparagraph of Article 10(3) of the Sixth Directive must be interpreted as meaning that the chargeable event for VAT and the chargeability of VAT on smuggled goods which have been seized and simultaneously or subsequently confiscated can occur only once the goods have gone beyond the area in which the first customs office inside the customs territory of the Community is situated.
93. Consequently, where the imported goods are seized and simultaneously or subsequently destroyed by the competent authorities before going beyond the first customs office situated inside the customs territory of the Community, it must be found that neither the chargeable event for VAT has occurred nor has that VAT become chargeable for the purposes of that article. That appears to be the situation in the two cases in the main proceedings in which the goods were transported by sea.
94. By contrast, where the goods have been seized and simultaneously or subsequently confiscated by the authorities in another Member State after going beyond the first customs office situated inside the customs territory of the Community, the chargeable event for VAT has already occurred and the VAT has become chargeable as a result, pursuant to the second subparagraph of Article 10(3) of the Sixth Directive. That appears to be the situation in the third case in the main proceedings in which the goods were transported by land.
95. In the second place, it is apparent from the question referred to the Court of Justice that the national court seeks to determine whether Article 867a of the Implementing Regulation has an effect on the chargeability of the VAT, with the result that the seized goods would need to be regarded as being placed under ‘a customs warehousing procedure’, a procedure which is laid down in Article 16(1)(B)(c) of the Sixth Directive, so that the chargeable event for VAT does not occur and, consequently, that tax does not become chargeable. The national court also seeks to determine whether the suspensive effect of the occurrence of both the chargeable event for, and the chargeability of, tax, laid down in the second sentence of the first subparagraph of Article 10(3) of the Sixth Directive, may operate for such goods.
96. In that respect, as regards the situation in which ‘goods are placed under one of the arrangements referred to in Article 7(3)’, a situation which is referred to in the second sentence of the first subparagraph of Article 10(3) of the Sixth Directive, the words ‘on entry’ must be understood as meaning that the goods have not gone beyond the first customs office and have, thus, not been imported into the territory of the Community. Consequently, where goods are seized and confiscated on their entry at an external border of the Community, the chargeable event does not occur and the tax does not become chargeable and there is no need to seek to determine the possible effect of the second subparagraph of Article 10(3) and Article 16(1)(B) of the Sixth Directive or of Article 867a of the Implementing Regulation, and this was the case in relation to the goods imported by sea in two of the cases in the main proceedings.
97. By contrast, as noted in paragraphs 81 and 82 above in relation to the chargeability of the excise duty, where goods which are introduced into the Community unlawfully are seized and confiscated by the competent authorities after going beyond the first border customs office, Article 867a of the Implementing Regulation and the second subparagraph of Article 10(3) of the Sixth Directive do not prevent the VAT on those goods from becoming chargeable, even if they are subsequently placed under a customs warehousing procedure. That appears to be the situation for the goods transported by land in the third case in the main proceedings.
98. In the third place, in so far as concerns the effect of the extinction of the customs debt under point (d) of the first paragraph of Article 233 of the Customs Code on the chargeable event for, and the chargeability of, VAT, in the light of the fact that, under the second subparagraph of Article 10(3) of the Sixth Directive, the chargeable event for, and the chargeability of, customs duty and VAT on the importation of goods occur in parallel, as stated in paragraph 91 above, it must be found that the same conditions apply as regards extinction to both customs duty on importation and VAT.
99. Accordingly, the answer to the third question is that Articles 2(2), 7 and 10(3) of the Sixth Directive must be interpreted as meaning that goods seized by the local customs and tax authorities on their introduction into the territory of the Community and simultaneously or subsequently destroyed by those authorities, without having left their possession, must be regarded as not having been imported into the Community, with the result that the chargeable event for VAT on them does not occur and, consequently, that tax does not become chargeable. However, the second subparagraph of Article 10(3) in conjunction with Article 16(1)(B)(c) of the Sixth Directive and Article 867a of the Implementing Regulation must be interpreted as meaning that, for goods which are seized by those authorities after their unlawful introduction into that territory, namely once they have gone beyond the area in which the first customs office inside that territory is situated, and are simultaneously or subsequently destroyed by those authorities, without having left their possession, the chargeable event for VAT occurs and that tax is chargeable, even if those goods are subsequently placed under a customs warehousing procedure. The fourth question
100. By its fourth question, the national court asks, in essence, whether the customs authorities in the Member State in which an unlawful importation of goods during a transport operation with a TIR carnet is detected are competent, under Articles 215 and 217 of the Customs Code, in conjunction with Article 454(2) and (3) of the Implementing Regulation, Article 7(1) of the Excise Duty Directive and Article 7 of the Sixth Directive, to recover customs duty, excise duty and VAT on the smuggled goods where the authorities in the Member State in which the unlawful introduction into the Community occurred did not detect that irregularity or recover that duty or those taxes.
101. It should be noted at the outset that, taking account of the answers given to the previous questions, this question concerns only the case in the main proceedings in which the cigarettes were introduced into the Community by land across the Polish-German border before being discovered and then seized by the Danish authorities at the German-Danish border.
102. In addition, as asserted by the Netherlands Government and the Commission, the competence to recover customs duty, excise duty and VAT must be analysed separately.
103. As regards, first, the competence to recover the customs debt, it is apparent, first of all, from the first indent of Article 215(1) of the Customs Code that such a debt is incurred ‘at the place where the events from which it arises occur’.
104. In that regard, it is apparent from the Court’s case-law that the determination of the place where the customs debt was incurred allows the Member State with jurisdiction to recover customs duties to be identified. Therefore, the purpose of that provision is to determine territorial jurisdiction to recover the amount of the customs debt (see, to that effect, Case C‑526/06 Road Air Logistics Customs [2007] ECR I‑11337, paragraph 26).
105. Next, under Article 215(3) of the Customs Code, the customs authorities referred to in Article 217(1) of that code, which are competent for entering the customs debt in the accounts, ‘are those of the Member State where the customs debt is incurred’.
106. Finally, as already pointed out in paragraph 48 above, the customs debt is incurred, in accordance with Article 202 of the Customs Code, at the place where the goods liable to customs duty go beyond the first customs office situated inside the customs territory of the Community without having been presented there.
107. Thus, it is apparent from a joint reading of the provisions referred to above that, in circumstances such as those in the relevant case in the main proceedings, it is the authorities in the Member State situated at the external border of the Community at which the goods were unlawfully introduced into the customs territory of the Community - the German authorities in the case concerned - which are competent to recover the customs debt, even if the unlawful introduction of the goods was detected subsequently in the territory of another Member State.
108. In addition, as pointed out by DTL, it is apparent from Article 454 of the Implementing Regulation that the distribution of competences referred to above also applies in relation to transport operations carried out with a TIR carnet.
109. Second, the competence to recover VAT results from a combination of Articles 7(2) and 10(3) of the Sixth Directive.
110. Article 7(2) states that ‘the place of import of goods shall be the Member State within the territory of which the goods are when they enter the Community’. Article 10(3) provides, as has already been pointed out in paragraph 90 above, that ‘the chargeable event shall occur and the tax shall become chargeable when the goods are imported’.
111. Consequently, like customs duties, VAT became chargeable in the Member State where the goods were unlawfully introduced into the Community and, therefore, the authorities in that Member State - the German authorities in the case concerned in the main proceedings - are competent to recover that tax.
112. Finally, in so far as concerns the competence to recover excise duty, Article 7(1) of the Excise Duty Directive provides, inter alia, that, in the event of products subject to excise duty and already released for consumption in one Member State being held for commercial purposes in another Member State, the duty is to be levied by the other Member State.
113. In the present case, it is likely that the goods discovered and seized are being held for commercial purposes. However, it is for the national court, which is the only court with direct knowledge of the dispute before it, to assess whether that is the case.
114. If that is the case, it is apparent from Article 6(1) in conjunction with Article 7(1) of the Excise Duty Directive that the authorities in the Member State in which the goods which are unlawfully introduced into the Community were discovered and seized are competent to recover excise duty. In the case in the main proceedings at issue, those are the Danish authorities.
115. If that is not the case, the first Member State into which the goods were imported, the Federal Republic of Germany in this case, remains competent to recover the excise duty pursuant to Article 6 of the Excise Duty Directive, even if the unlawfully introduced goods were only discovered subsequently by the authorities in another Member State.
116. Therefore, the answer to the fourth question is that Articles 202, 215(1) and (3), and 217 of the Customs Code, and Articles 7(2) and 10(3) of the Sixth Directive must be interpreted as meaning that it is the authorities in the Member State situated at the external border of the Community at which the goods were unlawfully introduced into the customs territory of the Community which are competent to recover the customs debt and the VAT, even if those goods were then transported to another Member State where they were discovered then seized. Articles 6(1) and 7(1) of the Excise Duty Directive must be interpreted as meaning that the authorities in that latter Member State are competent to recover the excise duty, provided that those goods are held for commercial purposes. It is for the national court to determine whether that condition is satisfied in the dispute before it. Costs
117. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.