JUDGMENT OF THE COURT

2 April 1998 (1)

(Council Directive 92/12/EEC of 25 February 1992 on the general arrangementsfor products subject to excise duty and on the holding, movement andmonitoring of such products — Member State in which duty is payable —Purchase through an agent)

In Case C-296/95,

REFERENCE to the Court under Article 177 of the EC Treaty by the Court ofAppeal, England and Wales, for a preliminary ruling in the proceedings pendingbefore that court between

The Queen

and

Commissioners of Customs and Excise,

ex parte EMU Tabac SARL, The Man in Black Limited and John Cunningham,

Intervener: Imperial Tobacco Ltd,

on the interpretation of Council Directive 92/12/EEC of 25 February 1992 on thegeneral 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 byCouncil Directive 92/108/EEC of 14 December 1992 (OJ 1992 L 390, p. 124),

THE COURT,

composed of: G.C. Rodríguez Iglesias, President, H. Ragnemalm, M. Wathelet andR. Schintgen (Presidents of Chambers), G.F. Mancini, J.C. Moitinho de Almeida,J.L. Murray (Rapporteur), J.-P. Puissochet, G. Hirsch, P. Jann and L. Sevón,Judges,

Advocate General: D. Ruiz-Jarabo Colomer,

Registrar: D. Louterman-Hubeau, Principal Administrator,

after considering the written observations submitted on behalf of:

—    EMU Tabac SARL, The Man in Black Limited and Mr Cunningham, byRobert Venables QC, Timothy Lyons and Amanda Hardy, Barristers,

—    Imperial Tobacco Ltd, by David Vaughan QC, and Mark Brealey, Barrister,

—    the United Kingdom Government, by Lindsey Nicoll, of the TreasurySolicitor's Department, acting as Agent, and by Stephen Richards andRobert Jay, Barristers,

—    the German Government, by Ernst Röder, Ministerialrat in the FederalMinistry of Economic Affairs, and Bernd Kloke, Oberregierungsrat in thatMinistry, acting as Agents,

—    the Greek Government, by Fokion Georgakopoulos, Assistant Legal Adviserin the State Legal Service, and Galatia Alexaki, Adviser in the SpecialCommunity Legal Service of the Ministry of Foreign Affairs, acting asAgents,

—    the French Government, by Catherine de Salins, Head of Subdirectorate inthe Legal Affairs Directorate of the Ministry of Foreign Affairs, andFrédéric Pascal, Chargé de Mission in the same Ministry, acting as Agents,

—    the Irish Government, by Michael A. Buckley, Chief State Solicitor, actingas Agent, Michael Collins, SC, and Jennifer Payne, Barrister-at-Law,

—    the Italian Government, by Professor Umberto Leanza, Head of theContentious Diplomatic Affairs Department of the Ministry of ForeignAffairs, acting as Agent, assisted by Ivo Braguglia, Avvocato dello Stato,acting as Agent,

—    the Netherlands Government, by Adriaan Bos, Legal Adviser at the Ministryof Foreign Affairs, acting as Agent,

—    the Austrian Government, by Franz Cede, Ambassador, acting as Agent,

—    the Swedish Government, by Erik Brattgård, Departementsråd in theForeign Trade Department of the Ministry of Foreign Affairs, acting asAgent,

—    the Commission of the European Communities, by Enrico Traversa andPeter Oliver, of its Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of EMU Tabac SARL, The Man in BlackLimited and Mr Cunningham, represented by Robert Venables, Timothy Lyons andAmanda Hardy; Imperial Tobacco Ltd, represented by David Vaughan and MarkBrealey; the United Kingdom Government, represented by Lindsey Nicoll, StephenRichards and Robert Jay; the Danish Government, represented by Peter Biering,Legal Adviser, Head of Department at the Ministry of Foreign Affairs, acting asAgent; the Greek Government, represented by Fokion Georgakopoulos; the FrenchGovernment, represented by Frédéric Pascal; the Irish Government, representedby Andreas O'Caoimh, SC, and Niamh Hyland, Barrister-at-Law; the ItalianGovernment, represented by Ivo M. Braguglia; the Netherlands Government,represented by Marc Fierstra, Assistant Legal Adviser at the Ministry of ForeignAffairs, acting as Agent; the Finnish Government, represented by Tuula Pynnä,Legal Adviser at the Ministry of Foreign Affairs, acting as Agent; the SwedishGovernment, represented by Erik Brattgård; and the Commission, represented byEnrico Traversa and Peter Oliver, at the hearing on 4 March 1997,

after hearing the Opinion of the Advocate General at the sitting on 17 April 1997,

gives the following

Judgment

1.

    By order of 31 July 1995, received at the Court on 18 September 1995, the Courtof Appeal referred to the Court for a preliminary ruling pursuant to Article 177 ofthe EC Treaty two questions concerning the interpretation of Council Directive92/12/EEC of 25 February 1992 on the general arrangements for products subjectto excise duty and on the holding, movement and monitoring of such products (OJ1992 L 76, p. 1), as amended by Council Directive 92/108/EEC of 14 December1992 (OJ 1992 L 390, p. 124, hereinafter 'the Directive‘).

2.

    Those questions were raised in proceedings between EMU Tobacco SARL('EMU‘), The Man in Black Limited ('MBL‘) and John Cunningham, one of the

directors of that company, and the Commissioners of Customs and Excise ('theCommissioners‘) concerning the charging of excise duty on cigarettes.

The United Kingdom legislation

3.

    Section 2(1) of the Tobacco Products Duty Act of 1979 provides that 'there shallbe charged on tobacco products imported into ... the UK a duty of excise ...‘. TheExcise Goods Regulations 1992 set out who is to be liable and when the liabilityarises. The Excise Duties (Personal Reliefs) Order 1992 contains certainexemptions, but they appear to have no relevance for the present case.

The applicable Community legislation

4.

    The Directive was to be transposed by the Member States by 31 December 1992.

5.

    Article 6 provides:

'1. Excise duty shall become chargeable at the time of release for consumption orwhen shortages are recorded which must be subject to excise duty in accordancewith Article 14(3).

Release for consumption of products subject to excise duty shall mean:

(a)     any departure, including irregular departure, from a suspensionarrangement;

(b)    any manufacture, including irregular manufacture, of those products outsidea suspension arrangement;

(c)    any importation of those products, including irregular importation, wherethose products have not been placed under a suspension arrangement.

2. The chargeability conditions and rate of excise duty to be adopted shall be thosein force on the date on which duty becomes chargeable in the Member State whererelease for consumption takes place or shortages are recorded. Excise duty shall belevied and collected according to the procedure laid down by each Member State,it being understood that Member States shall apply the same procedures for levyingand collection to national products and to those from other Member States.‘

6.

    According to Article 7:

'1. In the event of products subject to excise duty and already released forconsumption 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 thoseproducts are held.

2. To that end, without prejudice to Article 6, where products already released forconsumption as defined in Article 6 in one Member State are delivered, intendedfor delivery in another Member State or used in another Member State for thepurposes of a trader carrying out an economic activity independently or for thepurposes of a body governed by public law, excise duty shall become chargeable inthat other Member State.

3. Depending on all the circumstances, the duty shall be due from the personmaking the delivery or holding the products intended for delivery or from theperson receiving the products for use in a Member State other than the one wherethe products have already been released for consumption, or from the relevanttrader or body governed by public law.

4. The products referred to in paragraph 1 shall move between the territories ofthe various Member States under cover of an accompanying document listing themain data from the document referred to in Article 18(1). The form and contentof this document shall be established in accordance with the procedure laid downin Article 24 of this Directive.

5. The person, trader or body referred to in paragraph 3 must comply with thefollowing requirements:

(a)    before the goods are dispatched, make a declaration to the tax authoritiesof the Member State of destination and guarantee the payment of the exciseduty;

(b)    pay the excise duty of the Member State of destination in accordance withthe procedure laid down by that Member State;

(c)    consent to any check enabling the administration of the Member State ofdestination to satisfy itself that the goods have actually been received andthat the excise duty to which they are liable has been paid.

6. The excise duty paid in the first Member State referred to in paragraph 1 shallbe reimbursed in accordance with Article 22(3).‘

7.

    Article 8 provides:

'As regards products acquired by private individuals for their own use andtransported by them, the principle governing the internal market lays down thatexcise duty shall be charged in the Member State in which they are acquired.‘

8.

    Article 9(1) and (2) reads as follows:

'1. Without prejudice to Articles 6, 7 and 8, excise duty shall become chargeablewhere products [released] for consumption in a Member State are held forcommercial purposes in another Member State.

In this case, the duty shall be due in the Member State in whose territory theproducts are and shall become chargeable to the holder of the products.

2. To establish that the products referred to in Article 8 are intended forcommercial purposes, Member States must take account, inter alia, of the following:

—    the commercial status of the holder of the products and his reasons forholding them,

—    the place where the products are located or, if appropriate, the mode oftransport used,

—    any document relating to the products,

—    the nature of the products,

—    the quantity of the products.

For the purposes of applying the content of the fifth indent of the firstsubparagraph, Member States may lay down guide levels, solely as a form ofevidence. These guide levels may not be lower than:

(a)    Tobacco products

    cigarettes                     800 items

    cigarillos (cigars weighing

    not more than 3 g each)        400 items

    cigars                     200 items

    smoking tobacco             1.0 kg;

(b)    Alcoholic beverages

    spirit drinks                  10 l

    intermediate products          20 l

    wines (including a maximum

    of 60 l of sparkling wines)          90 l

    beers                     110 l.

Until 30 June 1997 Ireland shall be authorised to apply guide levels which may notbe less than 45 litres for wine (including a maximum of 30 litres of sparkling wine)and 55 litres for beer.‘

9.

    Article 10 provides:

'1. Products subject to excise duty purchased by persons who are not authorisedwarehousekeepers or registered or non-registered traders and dispatched ortransported directly or indirectly by the vendor or on his behalf shall be liable toexcise duty in the Member State of destination. For the purposes of this Article,”Member State of destination” shall mean the Member State of arrival of thedispatch or transport.

2. To that end, the delivery of products subject to excise duty already released forconsumption in a Member State and giving rise to the dispatch or transport ofthose products to a person as referred to in paragraph 1, established in anotherMember State, and which are dispatched or transported directly or indirectly by thevendor or on his behalf shall cause excise duty to be chargeable on those productsin the Member State of destination.

3. The duty of the Member State of destination shall be chargeable to the vendorat the time of delivery. However, Member States may adopt provisions stipulatingthat the excise duty shall be payable by a tax representative, other than theconsignee of the products. Such tax representative must be established in theMember State of destination and approved by the tax authorities of that MemberState.

The Member State in which the vendor is established must ensure that he complieswith the following requirements:

—    guarantee payment of excise duty under the conditions set by the MemberState of destination prior to dispatch of the products and ensure that theexcise duty is paid following arrival of the products,

—    keep accounts of deliveries of products.

4. In the case referred to in paragraph 2, the excise duty paid in the first MemberState shall be reimbursed in accordance with Article 22(4).

5. Subject to Community law, Member States may lay down specific rules forapplying this provision to products subject to excise duty which are covered byspecial national distribution arrangements compatible with the Treaty.‘

The case in the main proceedings

10.

    EMU is a company incorporated in Luxembourg, a subsidiary of The EnlightenedTobacco Company ('ETC‘), which specialises in selling tobacco products in theGrand Duchy of Luxembourg.

11.

    MBL is a company incorporated in the United Kingdom and is also a subsidiary ofETC. Since November 1994 it has been soliciting and obtaining from privateindividuals resident in the United Kingdom orders for cigarettes and tobaccos tobe purchased from EMU. Those orders are placed by individuals, for the purposesof their own private requirements, on the basis of a price list drawn up inLuxembourg francs. They are placed through MBL, which purchases the productsand arranges for their importation into the United Kingdom by a private carrier inthe name and on behalf of those individuals, in return for payment of a fee.Customers may not purchase more than 800 cigarettes at one time.

12.

    The terms under which those transactions are carried out were set out in anagreement made between EMU and MBL on 14 November 1994.

13.

    Those terms included a provision that EMU was to open and maintain a creditaccount in the name of MBL for all purchases made by customers through MBL.

14.

    For its part, MBL undertook to pay all sums received from customers directly intobank accounts in London or Luxembourg. It irrevocably guaranteed the paymentby return of EMU's monthly credit account statement in accordance with thelatter's usual payment terms. MBL further agreed that any variations in the pound-sterling purchase price of the products caused by exchange rate fluctuations wouldbe absorbed by equivalent increases or reductions in its own fee to customers.

15.

    The contracts for the sale and purchase of the products would be made in theGrand Duchy of Luxembourg and title in those products would pass in that country.The contract was to be subject to the law of England.

16.

    Excise duty in the United Kingdom is generally higher than in the Grand Duchy ofLuxembourg.

17.

    In the course of 1995, the Commissioners detained certain quantities of tobaccoproducts when they were imported into Dover, as they are authorised to do byUnited Kingdom legislation when excise duty is payable.

18.

    EMU, MBL and Mr Cunningham applied for judicial review of that detention.They sought declarations that United Kingdom excise duty was not payable andthat the detention of the tobacco was unlawful, and also an injunction restrainingthe Commissioners from detaining the products imported under their scheme. Theycontended that excise duty was payable in the Grand Duchy of Luxembourg andthat consequently the products in question were exempt from that duty in theUnited Kingdom, with the result that their prices were considerably reduced, by upto 40% in some cases.

19.

    Their application was refused and on 30 May 1995 they appealed to the Court ofAppeal.

20.

    The Court of Appeal considered that the case turned on the interpretation of theDirective, in particular of Article 8 thereof, and accordingly decided to stayproceedings and request the Court of Justice to give a preliminary ruling thefollowing questions:

'1.    Does Directive 92/12/EEC and in particular Article 8 have the effect ofprecluding the charging of excise duty on goods in Member State A incircumstances where —

    (i)    the goods were acquired for the use of a private individual in MemberState A;

    (ii)    they were acquired in Member State B by an agent acting on behalfof that private individual;

    (iii)    transportation of the goods from Member State B to Member StateA was arranged by the agent; and

    (iv)    the individual did not himself travel with the goods from MemberState B to Member State A?

2.    Where a scheme has been commercially devised and marketed whereunderpurchases made in Member State B for the personal use of a privateindividual in Member State A are made by an agent for that individual andthose purchases are transported from Member State B to Member State Aas a result of arrangements made by such an agent, does Directive92/12/EEC have the effect of precluding the charging of excise duty onthose purchases in Member State A?‘

21.

    It appears from the order for reference that by its two questions the national courtseeks essentially to ascertain whether the Directive must be interpreted asprecluding the levying of excise duty in Member State A on goods released forconsumption in Member State B, where the goods were acquired from a company,X, for the use of private individuals in Member State A, through a company, Y,acting in return for payment as agent for those individuals, and wheretransportation of the goods from Member State B to Member State A was also

arranged by company Y on behalf of those individuals and effected by aprofessional carrier charging for his services.

22.

    It should first be observed that the clear purpose of the Directive is to lay down anumber of rules on the holding, movement and monitoring of products subject toexcise duty, in particular so as to ensure that chargeability of excise duties isidentical in all the Member States.

23.

    As is apparent from the third, fifth, sixth and eleventh recitals in its preamble, theDirective draws a distinction between, on the one hand, goods held for commercialpurposes, in respect of which accompanying documents are required fortransportation purposes, and, on the other hand, goods held for personal use.

24.

    As regards the goods last mentioned, as Article 8 provides that excise duty ispayable in the Member State in which they were purchased, no document isrequired when they are transported to another Member State.

25.

    For Article 8 to apply, however, a number of conditions must be satisfied. Thegoods on which excise duty is chargeable must have been acquired by privateindividuals for their own use and transported by them.

26.

    Those conditions must make it possible to establish that goods on which duty ischargeable and which are acquired in one State and then transported to anotherare held for strictly personal purposes.

27.

    The applicants in the main proceedings submit, first, that that provision should beapplied in a situation such as this, where the purchase of the goods chargeable toexcise duty was effected through an agent who also arranged for theirtransportation.

28.

    In support of their submission, the applicants in the main proceedings argue thatthe maxim of Roman law qui facit per alium facit per se, meaning that a personacting through an agent must be treated as if he himself were so acting, constitutesa general principle in a number of legal systems, in particular in English law, andmust be applied in this case, a fortiori since neither the English version of theDirective nor the French, Italian, Spanish, German, Dutch or Portuguese versionsexclude the possibility of using an agent.

29.

    That argument cannot be upheld.

30.

    First, it is clear from the case-law of the Court that the Community legal orderdoes not, in principle, aim to define concepts on the basis of one or more nationallegal systems unless there is express provision to that effect (Case 64/81 Corman[1982] ECR 13, paragraph 8). The text of Article 8 of the Directive does notcontain any express reference to national legal systems.

31.

    Secondly, even if the abovementioned principle were common to all the MemberStates, it must be noted that, as the Advocate General has observed, it is one whichderives from civil law, and more specifically from the law of obligations, and it doesnot necessarily fall to be applied in the sphere of fiscal law, where the objectivesare of a quite different nature.

32.

    Lastly, it should be noted that where the Community legislature intended theDirective to apply in the event of the involvement of a third party it did so bymeans of an express provision formulated for that purpose. That is the case inArticles 9(3) and 10(1).

33.

    As far as Article 8 is concerned, it is evident that none of the language versionsexpressly provides for such involvement and that, on the contrary, the Danish andGreek versions indicate particularly clearly that, for excise duty to be payable in thecountry of purchase, transportation must be effected personally by the purchaserof the products subject to duty.

34.

    The applicants in the main proceedings accept that those two language versionspreclude the involvement of an agent. They submit, however, that if those versionsare not consistent with the other versions they are to be disregarded, on the groundthat, at the time when the Directive was adopted, those two Member Statesrepresented in total only 5% of the population of the 12 Member States and theirlanguages are not easily understood by the nationals of the other Member States.

35.

    In that regard it must be observed that the contradiction between the Danish andGreek versions on the one hand and the other language versions on the other onlyarises if the argument put forward by the applicants in the main proceedings isaccepted.

36.

    Furthermore, to discount two language versions, as the applicants in the mainproceedings suggest, would run counter to the Court's settled case-law to the effectthat the need for a uniform interpretation of Community regulations makes itimpossible for the text of a provision to be considered in isolation but requires, onthe contrary, that it should be interpreted and applied in the light of the versionsexisting in the other official languages (see, in particular, Case 9/79 Koschniske[1979] ECR 2717, paragraph 6). Lastly, all the language versions must, in principle,be recognised as having the same weight and thus cannot vary according to the sizeof the population of the Member States using the language in question.

37.

    It follows from the foregoing that Article 8 of the Directive is not applicable wherethe purchase and/or transportation of goods subject to duty is effected through anagent. The conditions governing the application of Article 8 are not, therefore,satisfied in the situation described by the national court.

38.

    The applicants in the main proceedings argue further that the principle of legalcertainty, as set out in particular in Case C-30/89 Commission v France [1990] ECRI-691, implies that the Directive should be so construed as to give the benefit of anyambiguity to private individuals in so far as it is liable to entail financialconsequences.

39.

    In that connection, it is to be observed that the existence of possible ambiguity ina provision can only be established by reference to the context of that provision(see, inter alia, Case 292/82 Merck [1983] ECR 3781, paragraph 12).

40.

    As already noted in this judgment, in particular at paragraph 33, it is clear from theDirective that at no point did the Community legislature intend Article 8 to applyin the event of the involvement of an agent. Accordingly that provision is notambiguous.

41.

    The applicants in the main proceedings submit, secondly, that, should Article 8 beinterpreted as not applying where an agent is involved, then Article 6 would haveto be applied, with the consequence that excise duty would be payable, in this case,solely in the Grand Duchy of Luxembourg, the country in which the goods werereleased for consumption.

42.

    On that point, it should be observed that, although Article 6 provides that duty isto become chargeable at the time of release for consumption of goods in aMember State, this does not, however, preclude excise duty from beingsubsequently levied in another Member State pursuant to Articles 7, 9 or 10,whereupon duty paid in the first State may be reimbursed pursuant to Articles 7(6)or 10(4).

43.

    A situation such as that described by the national court would appear to fall underboth Article 7 and Article 10 of the Directive.

44.

    Article 10(2) provides that the delivery of products subject to excise duty alreadyreleased for consumption in a Member State and giving rise to the dispatch ortransport of those products to a person established in another Member State whois not an authorised warehousekeeper or registered or non-registered trader, andwhich are dispatched or transported directly or indirectly by the vendor or on hisbehalf is to cause excise duty to be chargeable on those products in the MemberState of destination.

45.

    That provision was so drafted as to cover not only the case where the products aredispatched or transported by the vendor himself, but also, more broadly, all casesof dispatch or transport on behalf of the vendor.

46.

    Moreover, the formula used in that provision clearly indicates that the Communitylegislature is more concerned with the objective nature of the transaction than withits legal form.

47.

    In the case in the main proceedings, EMU and MBL are subsidiaries of the samecompany and as such they can be regarded as forming part of the same economicentity, despite the fact that they are separate legal persons (see Case 170/93Hydrotherm v Compact [1984] ECR 2999, paragraph 11).

48.

    In addition, it appears from the order for reference that MBL does not act at theinstigation of the private individuals it represents, but solicits from them orders fortobacco and cigarettes which are then placed exclusively with EMU, the vendor.Lastly, MBL and EMU set out in general terms their reciprocal obligations in anagreement made in 1991 which makes clear that the risks inherent in fluctuationof exchange rates are to be borne by MBL and not by the purchasers themselves.

49.

    Accordingly, although MBL acted as agent for the purchasers under English law,it must be concluded that the goods in question in the main proceedings weredispatched or transported directly or indirectly by the vendor or on his behalf in thesense contemplated by Article 10 of the Directive and that excise duty is chargeablein the United Kingdom.

50.

    As regards the double taxation that would result, according to the applicants in themain proceedings, from the levying of excise duty in the United Kingdom, Article10(4) provides expressly that, if Article 10(2) applies, the excise duty paid in theMember State where the goods were released for consumption is to be reimbursed.

51.

    With regard to Article 7, paragraph 1 thereof provides for the levying of excise dutyin a Member State in which products already released for consumption in anotherMember State are held for commercial purposes. Article 7(2) provides, to that end,that where such products are delivered, intended for delivery in another MemberState or used in another Member State for the purposes of a trader carrying outan economic activity independently or for the purposes of a body governed bypublic law, excise duty is to become chargeable in that other Member State.

52.

    In a case such as that now before the national court, where goods from oneMember State are carried to another Member State on the instructions of a traderacting in return for payment who has previously solicited customers in that latterState and has arranged for importation of the goods, it must be held that exciseduty is chargeable in that latter Member State.

53.

    It follows from the foregoing that the Directive must be interpreted as notprecluding the levying of excise duty in Member State A on goods released forconsumption in Member State B, where the goods were acquired from a company,X, for the use of private individuals in Member State A, through a company, Y,acting in return for payment as agent for those individuals, and wheretransportation of the goods from Member State B to Member State A was alsoarranged by company Y on behalf of those individuals and effected by aprofessional carrier charging for his services.

Costs

54.

    The costs incurred by the United Kingdom, Austrian, Danish, Finnish, French,German, Greek, Irish, Italian, Netherlands and Swedish Governments and by theCommission of the European Communities, which have submitted observations tothe Court, are not recoverable. Since these proceedings are, for the parties to themain proceedings, a step in the proceedings pending before the national court, thedecision on costs is a matter for that court.

On those grounds,

THE COURT

in answer to the questions referred to it by the Court of Appeal by order of 31 July1995, hereby rules:

Council Directive 92/12/EEC of 25 February 1992 on the general arrangements forproducts subject to excise duty and on the holding, movement and monitoring ofsuch products, as amended by Council Directive 92/108/EEC of 14 December 1992,must be interpreted as not precluding the levying of excise duty in Member StateA on goods released for consumption in Member State B, where the goods wereacquired from a company, X, for the use of private individuals in Member StateA, through a company, Y, acting in return for payment as agent for those individuals, and where transportation of the goods from Member State B toMember State A was also arranged by company Y on behalf of those individualsand effected by a professional carrier charging for his services.

Rodríguez Iglesias Ragnemalm Wathelet Schintgen Mancini Moitinho de Almeida Murray Puissochet Hirsch Jann Sevón

Delivered in open court in Luxembourg on 2 April 1998.

R. Grass

G.C. Rodríguez Iglesias

Registrar

President

1: Language of the case: English.