1 BY ORDER OF 2 DECEMBER 1980 , RECEIVED AT THE COURT ON 12 JANUARY 1981 , THE BUNDESFINANZHOF ( FEDERAL FINANCE COURT ) REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY TWO QUESTIONS ON THE INTERPRETATION OF ARTICLE 95 OF THE EEC TREATY IN ORDER TO ENABLE IT TO ASSESS THE COMPATIBILITY WITH THAT PROVISION OF THE LEVYING OF A TAX CHARGE REFERRED TO AS THE ' ' MONOPOLAUSGLEICHSPITZE ' ' ( MARGIN CONTAINED IN THE MONOPOLY EQUALIZATION DUTY ) ON IMPORTED SPIRITS PURSUANT TO THE TAX LEGISLATION IN FORCE IN THE FEDERAL REPUBLIC OF GERMANY DURING THE PERIOD PRIOR TO THE ADOPTION OF THE LAW OF 2 MAY 1976 AMENDING THE LAW ON THE SPIRITS MONOPOLY .
2 IT EMERGES FROM THE ORDER FOR REFERENCE AND FROM THE DOCUMENTS BEFORE THE COURT THAT ON 12 JANUARY 1976 THE RESPONDENT IN THE MAIN PROCEEDINGS REQUESTED CUSTOMS CLEARANCE FOR HOME USE FOR A CONSIGNMENT OF BLENDED SPIRIT FROM BELGIUM CONSISTING OF 90% NEUTRAL SPIRIT , COMPARABLE TO GERMAN MONOPOLY SPIRIT , AND 10% SPIRIT DERIVED FROM WINE . IT SHOULD BE NOTED THAT AT THE PRESENT STAGE OF THE PROCEEDINGS THE TAX IMPOSED ON THE LATTER CONSTITUENT IS NOT AT ISSUE AND THAT THE DISPUTE IS CONFINED TO THE TAX CHARGED ON THE CONSTITUENT CORRESPONDING TO DOMESTIC MONOPOLY SPIRIT .
3 IT MUST BE RECALLED THAT AT THE TIME WHEN THE PRODUCT IN QUESTION WAS IMPORTED , IMPORTED SPIRITS WERE SUBJECT TO A TAX REFERRED TO AS THE ' ' MONOPOLAUSGLEICH ' ' ( MONOPOLY EQUALIZATION DUTY ), WHICH WAS COMPOSED OF TWO ELEMENTS , NAMELY , THE EQUIVALENT OF THE TAX ON SPIRITS AMOUNTING TO DM 1 500 PER HECTOLITRE AND THE MONOPOLAUSGLEICHSPITZE AMOUNTING TO DM 80 PER HECTOLITRE . THE LATTER ELEMENT OF THE TAX CHARGE WAS THE EQUIVALENT , IN THE CALCULATION OF THE SELLING PRICE OF MONOPOLY SPIRIT , OF THE PREISSPITZE ( PRICE MARGIN ), WHICH WAS OBTAINED BY DEDUCTING FROM THE MONOPOLY ' S SELLING PRICE OF DM 1 833 PER HECTOLITRE THE AMOUNT OF THE TAX ON SPIRITS AND THE ' ' BASIC PRICE ' ' OF THE SPIRIT FIXED BY THE ADMINISTRATION AT DM 253 PER HECTOLITRE .
4 ANDRESEN CONTESTS THE COMPATIBILITY WITH ARTICLE 95 OF THE TREATY OF LEVYING THE MONOPOLAUSGLEICHSPITZE ON IMPORTED SPIRITS ON THE GROUND THAT THAT CHARGE WAS THE EQUIVALENT OF AN ELEMENT INCLUDED IN THE CALCULATION OF THE MONOPOLY ' S SELLING PRICE , NAMELY THE PREISSPITZE , WHICH IN FACT WAS NOT OF A FISCAL NATURE BUT REPRESENTED THE MONOPOLY ' S ADMINISTRATIVE COSTS AND OTHER ECONOMIC CHARGES .
5 ANDRESEN SUCCESSFULLY BROUGHT AN ACTION BEFORE THE FINANZGERICHT ( FINANCE COURT ) HAMBURG , AS IS CLEAR FROM THE JUDGMENT GIVEN BY THAT COURT ON 26 JANUARY 1978 . IN THE GROUNDS OF THAT JUDGMENT , THE FINANZGERICHT HELD THAT THERE WAS NO RELATIONSHIP BETWEEN THE MONOPOLAUSGLEICHSPITZE , WHICH WAS UNQUESTIONABLY OF A FISCAL NATURE , AND THE AMOUNT BY WHICH THE MONOPOLY ' S SELLING PRICE EXCEEDED THE SUM OF THE BASIC PRICE AND THE TAX ON SPIRITS . ACCORDING TO THE FINANZGERICHT , ALTHOUGH THAT AMOUNT IS FIXED BY AUTHORITY , IT IN FACT REPRESENTS ECONOMIC CHARGES BORNE BY THE MONOPOLY WHICH , AS SUCH , CANNOT BE OFFSET BY A TAX ON IMPORTED SPIRITS .
6 THE HAUPTZOLLAMT ( PRINCIPAL CUSTOMS OFFICE ) LODGED AN APPEAL AGAINST THAT JUDGMENT BEFORE THE BUNDESFINANZHOF CLAIMING IN SUBSTANCE THAT THE ELEMENT OF THE MONOPOLY ' S SELLING PRICE CORRESPONDING TO THE MONOPOLAUSGLEICHSPITZE WAS PROPORTIONAL TO AMOUNTS FIXED BY AUTHORITY AND , UNDER THE SPECIAL CONDITIONS OF A FISCAL MONOPOLY , WAS PASSED ON TO THE MONOPOLY ' S CUSTOMERS AS AN INTEGRAL PART OF ITS SELLING PRICE . ACCORDING TO THE HAUPTZOLLAMT , THERE CAN THEREFORE BE NO DOUBT THAT THERE ARE ELEMENTS EQUIVALENT TO THE MONOPOLAUSGLEICHSPITZE CONTAINED IN THE MONOPOLY ' S SELLING PRICE WHICH ARE UNQUESTIONABLY OF A FISCAL NATURE , WITH THE RESULT THAT THERE IS NO DISCRIMINATION AGAINST IMPORTED SPIRITS .
7 IN THE GROUNDS OF ITS ORDER FOR REFERENCE , THE BUNDESFINANZHOF RAISES THE QUESTION WHETHER AT THE RELEVANT TIME DOMESTIC MONOPOLY SPIRIT WAS ACTUALLY SUBJECT TO AN INTERNAL FISCAL CHARGE EQUIVALENT TO THE MONOPOLAUSGLEICHSPITZE LEVIED ON IMPORTED SPIRITS . THE BUNDESFINANZHOF CONSIDERS THAT IN VIEW OF THE VARIOUS ELEMENTS TAKEN INTO ACCOUNT IN DETERMINING THE MONOPOLY ' S SELLING PRICE , NAMELY , IN ADDITION TO THE TAX ON SPIRITS , THE ACQUISITION PRICE OF THE SPIRIT AND THE MONOPOLY ' S ADMINISTRATIVE AND MARKETING COSTS , THERE IS SOME DOUBT WHETHER THE ELEMENT REFERRED TO AS THE ' ' PREISSPITZE ' ' , WHICH IS EQUIVALENT TO THE MONOPOLAUSGLEICHSPITZE CHARGED ON IMPORTED SPIRITS , MAY BE REGARDED , EITHER WHOLLY OR PARTLY , AS A TAX CHARGE .
8 THE BUNDESFINANZHOF DRAWS ATTENTION TO THE FACT THAT UNDER THE SYSTEM APPLICABLE TO DOMESTIC SPIRIT WHICH IS NOT SOLD TO THE MONOPOLY AND IS SUBJECT TO A CHARGE REFERRED TO AS THE ' ' BRANNTWEINAUFSCHLAG ' ' ( SPIRITS SURCHARGE ), THAT CHARGE IS REDUCED BY A FIXED RATE DEDUCTION , AMOUNTING AT THE TIME TO DM 31 PER HECTOLITRE , IN ORDER TO TAKE ACCOUNT OF THE COSTS WHICH THE MONOPOLY SAVES IN THE CASE OF SPIRITS EXEMPT FROM THE REQUIREMENT TO DELIVER TO IT . THE BUNDESFINANZHOF DOES NOT RULE OUT THE POSSIBILITY THAT THAT SYSTEM MAY POSSIBLY SERVE AS A BASIS FOR DETERMINING THE SYSTEM APPLICABLE TO IMPORTED SPIRITS .
9 IN ORDER TO RESOLVE THOSE PROBLEMS , THE BUNDESFINANZHOF REFERRED TO THE COURT THE FOLLOWING TWO QUESTIONS :
' ' DOES THE EXPRESSION ' TAXATION IMPOSED ON A SIMILAR DOMESTIC PRODUCT ' , WITHIN THE MEANING OF THE FIRST PARAGRAPH OF ARTICLE 95 OF THE TREATY ESTABLISHING THE EUROPEAN ECONOMIC COMMUNITY COVER A CHARGE ARISING FROM THE SELLING PRICE FIXED BY THE SPIRITS MONOPOLY ADMINISTRATION FOR MONOPOLY SPIRIT USED IN THE MANUFACTURE OF SUCH A PRODUCT?
IS SUCH A CHARGE TO BE REGARDED AS TAXATION WITHIN THAT MEANING ONLY IN SO FAR AS CONCERNS THAT PART OF THE SELLING PRICE WHICH THE SPIRITS MONOPOLY ADMINISTRATION IS BOUND UNDER STATUTORY PROVISIONS TO REMIT TO THE STATE TREASURY AS A TAX ON SPIRITS , OR DOES THAT PART OF THE SELLING PRICE WHICH IS RETAINED BY THE SPIRITS MONOPOLY ADMINISTRATION TO COVER ITS COST ALSO CONSTITUTE SUCH TAXATION?
' '
10 DURING THE PROCEDURE BEFORE THE COURT THE RESPONDENT IN THE MAIN PROCEEDINGS MAINTAINED THAT SINCE THE PREISSPITZE INCLUDED IN THE CALCULATION OF THE MONOPOLY ' S SELLING PRICE IS NOT OF A FISCAL NATURE , THE IMPOSITION OF THE MONOPOLAUSGLEICHSPITZE ON IMPORTED SPIRITS IS DISCRIMINATORY IN ITS ENTIRETY . IT CLAIMS THAT THE PREISSPITZE , FAR FROM CONSTITUTING TAXATION BORNE BY DOMESTICALLY PRODUCED SPIRIT , IN FACT REPRESENTS THE MONOPOLY ' S ADMINISTRATIVE AND MARKETING COSTS ; MOREOVER , IT SERVES TO FINANCE SUBSIDIES GRANTED TO NATIONAL PRODUCTION BY MEANS OF THE GREATLY VARYING ACQUISITION PRICES WHICH THE MONOPOLY PAYS TO VARIOUS PRODUCERS OF SPIRITS .
11 THE RESPONDENT ' S VIEW WAS INITIALLY SUPPORTED BY THE COMMISSION , WHICH STATED THAT ONLY ELEMENTS WHICH WERE UNQUESTIONABLY OF A FISCAL NATURE COULD BE TAKEN INTO ACCOUNT FOR THE PURPOSE OF COMPARING THE TAXATION IMPOSED RESPECTIVELY ON THE NATIONAL AND IMPORTED PRODUCTS . WHEREAS THE FISCAL NATURE OF THE MONOPOLAUSGLEICH , INCLUDING THE MONOPOLAUSGLEICHSPITZE , IS UNDENIABLE , THE COMPOSITION OF THE MONOPOLY ' S TOTAL SELLING PRICE IS DIFFICULT TO ANALYSE . OF THE ELEMENTS MAKING UP THAT PRICE , ONLY THE TAX ITSELF IS UNDOUBTEDLY OF A FISCAL NATURE . IN THE CASE OF THE PREISSPITZE , HOWEVER , ANY FISCAL COMPONENTS ARE INTERMINGLED WITH THOSE ARISING FROM THE COMMERCIAL ADMINISTRATION OF THE MONOPOLY . AT THAT STAGE THE COMMISSION TOOK THE VIEW THAT , IN THE INTEREST OF THE CLARITY REQUIRED FOR THE APPLICATION OF THE PROVISIONS OF THE TREATY , A FISCAL CHARGE MIGHT NOT BE EQUATED FOR THE PURPOSE OF THE COMPARISON OF CHARGES UNDER ARTICLE 95 WITH A COMPONENT OF THE MONOPOLY ' S SELLING PRICE WHOSE NATURE , FISCAL OR OTHER , COULD NOT BE DETERMINED WITH CERTAINTY .
12 IN ITS ORAL OBSERVATIONS THE COMMISSION ALTERED ITS VIEWS ON THAT POINT . REFERRING TO THE GROUNDS OF THE ORDER FOR REFERENCE OF THE BUNDESFINANZHOF , IT EXPRESSED THE OPINION THAT IT WOULD BE MORE APPROPRIATE TO DRAW AN ANALOGY BETWEEN THE FISCAL SYSTEM APPLICABLE TO IMPORTED SPIRITS AND THE FISCAL SYSTEM APPLICABLE TO DOMESTIC SPIRITS NOT SUBJECT TO THE MONOPOLY . CONSEQUENTLY , IT PROPOSES THAT THE QUESTIONS RAISED SHOULD BE ANSWERED TO THE EFFECT THAT THE RULE AGAINST DISCRIMINATION CONTAINED IN ARTICLE 95 WOULD BE COMPLIED WITH IF IMPORTED SPIRIT RECEIVED THE SAME TREATMENT AS SPIRIT WHICH IS NOT SUBJECT TO THE MONOPOLY , THAT IS TO SAY , IF THE MONOPOLAUSGLEICHSPITZE WERE REDUCED BY THE FIXED RATE DEDUCTION APPLICABLE TO THE BRANNTWEINAUFSCHLAG . THE COMMISSION CONSIDERS THAT THAT SOLUTION WOULD HAVE THE ADVANTAGE OF AVOIDING DISTORTION OF COMPETITION IN FAVOUR OF IMPORTED SPIRITS VIS-A-VIS DOMESTIC SPIRITS NOT SUBJECT TO THE MONOPOLY . IN REPLY TO A QUESTION ASKED BY THE COURT , IT STATED THAT IT ADHERED TO THAT OPINION BECAUSE IT CONSIDERED THAT THE FIRST VIEW WHICH IT PUT FORWARD WOULD CALL IN QUESTION THE COURT ' S DECISION IN ITS JUDGMENT OF 17 FEBRUARY 1976 IN CASE 45/75 REWE V HAUPTZOLLAMT LANDAU ( 1976 ) ECR 181 .
13 THE COURT CONSIDERS THAT THE FIRST VIEW PUT FORWARD BY THE COMMISSION CONFORMS MORE CLOSELY TO THE REQUIREMENTS OF ARTICLE 95 AND THAT THERE IS , MOREOVER , NO INCONSISTENCY BETWEEN THAT SOLUTION AND THE GROUNDS OF THE JUDGMENT OF 17 FEBRUARY 1976 .
14 IT MUST FIRST BE POINTED OUT IN THAT REGARD THAT SINCE IN THIS CASE THE IMPORTED PRODUCT IS SPIRIT WHICH IS SIMILAR TO THE MONOPOLY SPIRIT IN THE FEDERAL REPUBLIC OF GERMANY , THE COMPARISON OF FISCAL CHARGES ENVISAGED BY ARTICLE 95 MUST BE CARRIED OUT WITH REFERENCE TO THE SYSTEM OF TAXATION APPLICABLE TO MONOPOLY SPIRIT AND NOT WITH REFERENCE TO THE SYSTEM APPLICABLE TO EXEMPT SPIRIT . INDEED , THE POINT AT ISSUE IN THIS CASE IS NOT THE SIMILARITY OF TWO PRODUCTS BUT THE STRUCTURE OF TWO SYSTEMS FOR THE TAXATION OF AN IDENTICAL PRODUCT WHICH DIFFER ACCORDING TO WHETHER THE PRODUCT IS MARKETED BY THE MONOPOLY OR IS IMPORTED .
15 IN ORDER TO MAKE THAT COMPARISON , IT IS NECESSARY TO ANALYSE THE STRUCTURE OF THE MONOPOLY ' S SELLING PRICE AS BASED ON THE SCHEME OF THE GERMAN LEGISLATION . IT IS CLEAR FROM THAT LEGISLATION THAT IN THE COMPUTATION OF THAT PRICE ONLY THE TAX ON SPIRITS ITSELF IS UNQUESTIONABLY OF A FISCAL NATURE . THE OTHER TWO ELEMENTS MAKING UP THE PRICE , NAMELY THE BASIC PRICE AND THE PREISSPITZE , ARE FIXED AT THE DISCRETION OF THE ADMINISTRATION ; UNDER THAT METHOD OF CALCULATION , THE BASIC FIGURE IS CONSTITUTED BY THE TOTAL SELLING PRICE , SO THAT THE ELEMENT REFERRED TO AS THE ' ' PREISSPITZE ' ' IS DETERMINED BY DEDUCTING FROM THAT TOTAL PRICE THE SUM OF THE TAX ON SPIRITS AND THE BASIC PRICE . IT THUS BECOMES EVIDENT THAT THE PREISSPITZE IS IN FACT MERELY A RESIDUAL AMOUNT WHICH IS INEXTRICABLY INVOLVED IN THE DETERMINATION BY THE MONOPOLY OF THE TOTAL SELLING PRICE AND THE BASIC PRICE . THE BASIC PRICE IS IN TURN AN AVERAGE PRICE BASED ON A FIXED ESTIMATE .
16 IT FOLLOWS THAT THE PREISSPITZE IS NECESSARILY A VARYING AMOUNT OF INDETERMINATE COMPOSITION COVERING ALL ASPECTS OF THE MONOPOLY ' S COMMERCIAL ADMINISTRATION ; HOWEVER , IT IS NOT POSSIBLE TO DETERMINE THE EXTENT TO WHICH IT IS AN ELEMENT EQUALIZING THE PRICES PAID TO PRODUCERS , WHAT PROPORTION THEREOF COVERS THE ADMINISTRATIVE , MANAGEMENT AND MARKETING COSTS OF THE MONOPOLY AND WHAT PROPORTION REPRESENTS A POSSIBLE PROFIT , WHICH ALONE MAY BE OF A FISCAL NATURE SINCE IT IS REMITTED TO THE STATE TREASURY .
17 IT MUST BE RECALLED THAT IN ITS JUDGMENT OF 17 FEBRUARY 1976 , THE COURT CONSIDERED THAT THE SCOPE OF ARTICLE 95 ' ' COULD NOT BE SO EXTENDED AS TO ALLOW ANY KIND OF COMPENSATION BETWEEN A TAX CREATED SO AS TO APPLY TO IMPORTED PRODUCTS AND A CHARGE OF A DIFFERENT NATURE IMPOSED , FOR EXAMPLE , FOR ECONOMIC PURPOSES ON THE SIMILAR DOMESTIC PRODUCT ' ' . IT IS TRUE THAT THE COURT ACCEPTED THAT THERE MIGHT BE AN EXCEPTION TO THAT PRINCIPLE , BUT ONLY WHERE THE IMPORTED PRODUCT AND THE SIMILAR DOMESTIC PRODUCT WERE BOTH EQUALLY SUBJECT TO A GOVERNMENT TAX WHICH WAS ' ' INTRODUCED AND QUANTIFIED BY THE PUBLIC ADMINISTRATION ' ' . IT IS EVIDENT FROM A CONSIDERATION OF THE FOREGOING THAT IN VIEW OF THE INTERMINGLING OF THE BASIC PRICE OF THE SPIRIT AND THE PREISSPITZE DUE TO THE METHOD OF CALCULATING THE MONOPOLY SELLING PRICE , ANY FISCAL ELEMENT WHICH MAY BE INCLUDED IN THE PREISSPITZE IS INDETERMINATE TO SUCH A DEGREE THAT IT DOES NOT SATISFY THE REQUIREMENT THAT IT SHOULD BE A GOVERNMENT TAX WHICH IS INTRODUCED AND QUANTIFIED BY THE PUBLIC ADMINISTRATION .
18 THUS IT IS CLEAR THAT , IN THE COMPUTATION OF THE SELLING PRICE OF MONOPOLY SPIRIT , ONLY THE AMOUNT REPRESENTING THE TAX ON SPIRITS MAY BE TAKEN INTO ACCOUNT FOR THE PURPOSES OF THE COMPARISON OF FISCAL CHARGES ENVISAGED BY ARTICLE 95 OF THE TREATY . CONVERSELY , ANY OTHER COMPONENT OF THE MONOPOLY PRICE WHICH IS NOT IN THE NATURE OF A FISCAL CHARGE , DETERMINED AS TO AMOUNT , MUST BE EXCLUDED FROM THAT COMPARISON . INDEED , THE PREISSPITZE , LIKE THE BASIC PRICE , CORRESPONDS , IN A PROPORTION WHICH IT IS IMPOSSIBLE TO CALCULATE , TO ECONOMIC CHARGES WHICH FALL ON ANY IMPORTER OF SPIRITS FROM OTHER MEMBER STATES . IT FOLLOWS THAT THE LEVYING OF THE MONOPOLAUSGLEICHSPITZE ON IMPORTED SPIRITS IS DISCRIMINATORY .
19 IN VIEW OF THE MONOPOLY ' S DISCRETION IN FIXING ITS PRICES , THAT IS THE ONLY SOLUTION WHICH WILL GUARANTEE THAT THE COMPARISON OF FISCAL CHARGES WHICH IS CENTRAL TO ARTICLE 95 IS NOT DISTORTED TO THE DETRIMENT OF IMPORTED PRODUCTS BY THE IMPACT ON THE LEVEL OF TAXATION IMPOSED ON THOSE PRODUCTS OF NON-FISCAL CHARGES , PARTICULARLY ECONOMIC CHARGES , BORNE BY THE MONOPOLY .
20 CONSEQUENTLY , THE REPLY WHICH MUST BE GIVEN TO THE QUESTIONS RAISED BY THE BUNDESFINANZHOF IS THAT THE TERM ' ' TAXATION ' ' , CONTAINED IN ARTICLE 95 OF THE TREATY , MUST BE REGARDED AS COVERING , IN SO FAR AS THE SELLING PRICE FOR SPIRITS FIXED BY A NATIONAL MONOPOLY IS CONCERNED , ONLY THAT PART OF THE PRICE WHICH THE MONOPOLY IS REQUIRED BY LAW TO REMIT TO THE STATE TREASURY AS A TAX ON SPIRITS , DETERMINED AS TO AMOUNT , TO THE EXCLUSION OF ALL OTHER ELEMENTS OR CHARGES , ECONOMIC OR OTHER , INCLUDED IN THE CALCULATION OF THE MONOPOLY SELLING PRICE .
21 THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAS SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .
ON THOSE GROUNDS ,
THE COURT ( SECOND CHAMBER ),
IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE BUNDESFINANZHOF BY ORDER OF 2 DECEMBER 1980 , HEREBY RULES :
THE TERM ' ' TAXATION ' ' , CONTAINED IN ARTICLE 95 OF THE EEC TREATY , MUST BE REGARDED AS COVERING , IN SO FAR AS THE SELLING PRICE FOR SPIRITS FIXED BY A NATIONAL MONOPOLY IS CONCERNED , ONLY THAT PART OF THE PRICE WHICH THE MONOPOLY IS REQUIRED BY LAW TO REMIT TO THE STATE TREASURY AS A TAX ON SPIRITS , DETERMINED AS TO AMOUNT , TO THE EXCLUSION OF ALL OTHER ELEMENTS OR CHARGES , ECONOMIC OR OTHER , INCLUDED IN THE CALCULATION OF THE MONOPOLY SELLING PRICE .
