C-30/65

JUDGMENT OF 22. 3. 1966 — CASE 30/65 MACCHIORLATI DALMAS v HIGH AUTHORITY

CELEX: 61965CJ0030
Datum: 1966-03-22
Källa: eur-lex.europa.eu

THE COURT composed of: Ch. L. Hammes, President, L. Delvaux (Rapporteur), President of Chamber, A. M. Donner, R. Lecourt and R. Monaco, Judges, Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Facts

The facts may be summarized as follows:

A —) On 30 October 1958 the former company Macchiorlati Dalmas e Figli was converted into a limited partnership having the same name. As the Turin plant is no longer in use, the firm carries out its operations in Borgaro, where there is a cold-charge electric arc furnace with a capacity of 8 to 10 metric tons, and at another plant in Corio Canavese. According to the applicant the undertaking procedures almost exclusively dog-spikes and special steel plates for railways. The plates are produced at Borgaro and the dog-spikes at Corio Caravese. The main use of the furnace is for the melting of crude steel for use in later production, but, from time to time, the company has sold ingots of crude steel when production for the railways has slowed down. The scrap used by the company consists of turnings of steel and iron in categories 40, 41 and 43. According to the applicant it always bought this scrap in Italy, France and Germany at market prices and never acquired scrap imported from third countries. Further, the production operations create waste, making it possible for a considerable amount of the undertaking's own scrap to be used for melting down later. During the equalization period the company had on several occasions to acquire scrap, which proved to be useless for production, because the percentage of earth and other materials in it was too high and the claims by purchasers forced it to charge the furnace with a considerable amount of its own waste. The applicant maintains that it has never been in any way connected with Campsider and was not therefore bound by decisions taken by this organization, of which in any case it had never been notified. So far as the decisions of the High Authority are concerned they do not compel undertakings to supply information and the applicant therefore assumed that it was under no duty to do so.

B —) The applicant has on several occasions brought proceedings against the High Authority.

1) As the High Authority discovered during a check carried out in 1957 irregularities in the applicant's conditions of sale, it imposed a fine on it by decision of 14 November 1958. The application in Case 1/59 against this decision was dismissed by the Court's Judgment of 17 December 1959 (Rec. 1958-1959, pp. 424 to 429).

2) As the High Authority discovered as a result of checks carried out that the applicant had failed to declare its production, it made a decision requiring it to pay the levy and surcharges for delay. T he application in Case 22/59 directed against this decision was discontinued by the applicant on 20 April 1960.

3) A decision of 14 November 1961, requiring the applicant to pay surcharges for delay was annulled by the Court by its Judgment in Case 1/63 of 16 December 1963 on the ground that the statement of the reasons upon which the decision was based was inadequate (Rec. 1963, pp. 635 to 638).

4) The applicant disputed a new decision of 14 November 1962 relating to the same surcharges for delay by its application in Case 21/64, which the Court dismissed by its judgment of 31 March 1965 (Rec. 1964, pp. 244 to 249).

C —) Following repeated requests from the High Authority the applicant wrote to it on 19 May 1960 and stated that the scrap bought and consumed, for the period 1 April 1954 to 3 November 1958, amounted to 22330 metric tons. By a decision of 23 February 1962 the High Authority called upon the applicant to produce the invoices for relating to its consumption of electricity for the said period. On 8 August 1962 the High Authority sent the applicant a statement of the tonnage which it had declared, revised in accordance with the results of the investigations and checks carried out, that is to say, a statement that the assessable tonnage amounted to 58480 metric tons. After publication of General Decision No 7/63 the High Authority sent to the applicant on 8 April 1964 a computerized account calling upon it to pay the sum of 395858600 lire in respect of the entire equalization period, as the applicant had never paid any contributions. Availing itself of its right to submit observations on the statement of account, the applicant asked for information and through its lawyer made direct contact with the departments of the High Authority. As it proved impossible to reach an agreement, on 7 April 1965 the High Authority took the two decisions which are the subject matter of this application. The first fixes the assessable tonnage at 58480 metric tons and the second requires the applicant to pay 395858600 lire by way of contributions for the entire period of equalization.

II — Conclusions of the parties

A —) In its application the applicant,‘while reserving the right to tender evidence and to make further submissions’, claims that the Court should:

‘— declare that this application is admissible;

— annul the individual decisions taken by the High Authority on 7 April 1965;

— order the latter to pay the costs.’

B —) In its statement of defence, the defendant contends that the Court should:

‘— dismiss all the claims of the undertaking Macchiorlati, Dalmas e Figli, a limited partnership, submitted in its application of 24 May 1965 and order it to pay the costs of the action.’

C —) In its reply the applicant asks the Court to order the following measures of inquiry:

‘Order the High Authority:

1) to produce all the documents collected during the checks carried out at the applicant's premises and in particular the invoices for the purchase of scrap and the invoices for the sale of products as well as the reports of the inspectors;

2) to state exactly and prove by documentary evidence upon the basis of what factors it fixed the equalization price of the scrap, how these factors were determined and by whom;

3) to state who carried out the checks at the applicant's premises in 1958 and 1961.

Expert's report

Order, if necessary, the report of an expert in order to determine the following facts relating to the applicant's undertaking:

Are plates, fish-plates and dog-spikes to be considered as being included in the products mentioned in Annex I to the ECSC Treaty, and in particular are these products coldfinished products or not, what operations are involved in their production and what is the proportion of waste in relation to the raw materials used for their production?

Can steel be produced at the cold-charge electric furnace, at the applicant's undertaking in Borgaro by the partial use of pig-iron, how much saving of scrap can thereby be achieved and how much more would the production of steel in this way cost compared with the production of steel exclusively from scrap?

Oral evidence by witnesses

Is it not true that, during the discussions at the Marketing Division of the Directorate-General for Steel in Luxembourg, when Mr Astolfi complained of the absurd fixing of the equalization price at a level far lower than the price paid by the applicant, he was told that this price had been fixed on the basis of the average of the data for the whole Community and that the data for Italy had been supplied by Campsider?

Is it not true that on this occasion Mr Astolfi was shown a table showing the figures for Italy and was assured that they had been compiled by Campsider?

We name as witnesses: Mr I. Nicolaï, adviser and Mr Cipolla, official of the High Authority.’

D —) In its rejoinder the defendant repeats the conclusions set out in its statement of defence.

III — Submissions and arguments — of the parties

The submissions and arguments of the parties may be summarized as follows:

A — Admissibility

The defendant submits that the complaints against the general decisions are inadmissible to the extent to which, according to the wording used by the applicant itself in its application, they seek the annulment of the general decisions.

According to the case-law of the Court the specific rule laid down in the third paragraph of Article 36 of the Treaty is a principle of wholly general application. Therefore the reference made by the applicant itself to the third paragraph of Article 36 proves that the submissions seeking the annulment of the general decisions are in fact submissions intended to contest individual decisions on the ground of the alleged illegality of the principles laid down by the High Authority in its general decisions.

B — The substance of the case

The submissions put forward by the applicant are divided into two categories, the first relating directly to the disputed individual decisions, the second relating to the illegality of the general decisions upon which the contested individual decisions are based.

1) The submissions relating to the individual decisions:

a) Infringement of Article 15 of the Treaty on the ground that the statements of the reasons upon which the decisions are based are inadequate, incorrect and inconsistent;

b) Infringement of Article 4 (2) of Decision No 2/57 and of Article 4 (2) of Decision No 16/58;

c) Infringement of Article 81 read together with Article 80 of the Treaty;

d) Infringement of the first paragraph of Article 47 of the Treaty;

e) Infringement of Decision No 19/65 of 15 December 1965.

2) The submissions relating to general decisions:

a) Illegality of Decision No 19/60 on the ground that it infringes Article 4 (b) and Article 15 of the Treaty and on the ground of misuse of powers;

b) Illegality of Decisions Nos 18/60 and 20/60 read together with Decision No 7/63 on the ground that they infringe Article 1 (1) of Decision No 22/64 and Article 15 of the Treaty and on the ground of misuse of powers;

c) Illegality of Decision No 7/63, so far as the determination of the total amounts of imported scrap and scrap treated as such are concerned on the ground that it infringes Article 15 of the Treaty by failing to state the reasons upon which the alterations appearing in the Annexes are based, and infringement of Decisions Nos 18/60 and 20/60;

d) Illegality of Decision No 26/55 and its successive extensions, relating to the detailed rules for the application of the financial arrangements adopted to achieve savings of scrap by consuming more pig-iron, on the ground that it infringes Article 4(b) of the Treaty and Article 15 of the Treaty, because the statement of the reasons on which it is based is incorrect;

e) Illegality of Decisions Nos 7/63, 18/60 and 20/60 which fixed the equalization prices and the earlier decisions upon which they are based, on the ground that they infringe Articles 3(b) and (c), 4(b) and the second paragraph of Article 47 of the Treaty.

1. Submissions relating to the individual decision fixing the tonnage of scrap liable to equalization

(a) Inadequate statement of the reasons upon which the decision is based

The applicant is of the opinion that the criteria upon which the reasons for the decision are based infringe Article 15 of the Treaty, because they are inadequate, incorrect and inconsistent.

1. The decision states that the copies of the suppliers' invoices prove that 30421 metric tons of scrap were bought, for the period from April 1954 to January 1957. The applicant raises the objection that the source of this statement is the report of the investigation in 1958, which it did not sign. Moreover, two years later, it reported that it had bought 10835 metric tons during the same period. It is clear, the applicant states, that the inspectors made a mistake when they established the relevant data. For the statement of reasons to be valid on this point, it should have mentioned which purchase invoices were taken into account, so as to make it possible to prove errors in calculation.

2. The applicant has produced purchase invoices for the period February 1957 to November 1958 which are consistent with the tonnages it declared. The defendant did not take them into account and made its own assessment based on the invoices for the sale of ingots and rolled products which had been checked in November 1961. The reasons on which this assessment is based are not given, because no mention is made of the data used by the inspectors, there is no record of the investigation, and the invoices are not specified individually.

3. The applicant calls attention to the fact that there is a contradiction between page 4 of the Decision of 7 April 1965 fixing the tonnage of bought scrap subject to equalization, which states that ‘the ratio between the specific charge of bought scrap consumed and one metric ton of steel sold can be determined at 1:1.08 for ingots and 1:1.12 for rolled products’ and page 6 of the same decision which states on the other hand that ‘the ratio between the specific charge of bought scrap and one metric ton of crude steel produced can be determined at 1:1.015 when the steel is processed into rolled steel and at 1:1.08 when the ingots are sold directly as such.’ According to the applicant this contradiction, which is not an error of substance, shows that the reasons upon which the decision is based are carelessly worded.

4. The applicant states that cross-checking the calculation against the consumption of electricity does not provide the contested decision with a credible and reliable statement of the reasons upon which it was based. This calculation, it states, does not take into account own arisings, remeltings and the amounts of pig-iron used in the furnace at Borgaro.

5. According to the applicant the failure to mention specifically the amounts assessed for the different periods of equalization, to which the different rates of equalization correspond, proves the inadequacy of the statement of the reasons upon which the contested decision is based. The defendant's replies to the arguments concerning the inadequacy of the statement of the reasons are as follows: As to 1. The defendant produces, in Schedule 2 to its statement of defence, a statement of the purchase invoices totalling 31318.090 metric tons. It also produces a statement extracted from the invoices containing for the period from April to June 1954 an analysis of the purchases according to the different types of products and suppliers (Schedule 3 to the statement of defence). Further it offers to produce, if the Court wishes, a similar analysis of purchases for the whole of the period from April 1954 to January 1957. As to 2. The defendant replies that the reasons why the assessment had to be based on the sales invoices and not on the purchase invoices produced by the applicant are contained in the contested decision. It produces, in Schedule 4 to the statement of defence, a summary of the sales carried out month by month and product by product by the applicant for the period from February 1957 to November 1958. As to 3. The defendant replies that the applicant's objection is caused by its own technical mistake. In fact 1120 kg of scrap are required for one ton of the finished product, but 1015 kg for one ton of crude steel which is then processed into the finished product. It produces in Schedule 5 to its statement of defence a table setting out the corresponding figures. As to 4. The defendant replies that in its decisions the Court has accepted that the calculation of production based on the figures for the consumption of electricity is adequate and lawful. In the present case the figures obtained by this inductive method correspond exactly to the result obtained from the accounting documents. In addition the decisions of the Court also show that the inductive method of calculation does not overlook certain facts put forward by the applicant as corrective factors in order to dispute the accuracy of the method adopted. It points out that the applicant's arguments based on its use of own arisings and of pig-iron are neither substantiated nor plausible. With regard to the alleged use of pig-iron in the furnace at Borgaro, this has not been proved and, even if it had been, it would only be relevant if it were new pig-iron, and not scrap derived from pig-iron, which is also subject to equalization, which was used. As to 5. The defendant replies that the contested decision in fact carries out an analysis, on the basis of invoices, of the total production into the different periods of equalization. In addition the complaint should be supported by production of documents capable of refuting the evidential value of the invoices checked by the High Authority, which remain in the possession of the applicant. The applicant replies that if it is to be able to defend its rights and if the Court is to be in a position to carry out its judicial review, it is essential that the High Authority prove the facts which it has mentioned by producing all the invoices for the purchases of scrap and the sale of the finished products as well as the reports of its inspectors. The applicant states that it no longer has these invoices. It points out, in addition, with regard to the invoices already produced: that the invoices relating to the transportation of scrap are not evidence of its purchase; that the list of sales includes large quantities of fish-plates which cannot be regarded as products subject to the Common Market; that the system of calculation adopted by the High Authority, which consists of assessing the consumption of scrap on the basis of purchase invoices (from April 1954 to January 1957) and then on the basis of sales invoices (from February 1957 to November 1958) often mean that the same scrap is brought into account twice: in fact it is the same scrap purchased in 1956 which was used to produce the rolled steel and ingots sold at the beginning of 1957. Finally, the applicant points out that it is only from the date of entry into force of Decision No 14/55 that it has been possible for scrap used on contract work to be included in equalization; therefore the inclusion for the period before Decision No 14/55 of scrap used on contract work has no legal foundation. The defendant calls attention to the fact that it produced, in a schedule to its statement of defence, a summary of purchases of scrap for the period from April 1954 to January 1957, based on the purchase invoices (Schedule 2) and a statement showing an analysis of purchases during the period from April to June 1954 (Schedule 3) according to the different types of products and suppliers extracted from these invoices. These documents were compiled from the list of invoices prepared by the inspectors at the applicant's premises, but the applicant knows very well that the High Authority does not have any of these invoices in its possession and could not therefore produce them, which is what the applicant calls upon the High Authority to do in an attempt to shift the burden of proof. All that the defendant could do is to supplement the before-mentioned Schedule 3 by extending the analysis of purchase to January 1957. But it will only produce this additional information if the Court so orders, because it is of the opinion that these further particulars are not necessary to enable the Court to rule that the application is unfounded. With regard to those invoices headed ‘Waggon Department’ the applicant argues that they are evidence only of the transportation of scrap and not of the supply of scrap. The defendant replies that the checks carried out established that large quantities of scrap were supplied by the Waggon Department of the state railways and that it is incumbent on the applicant to produce documentary evidence to the contrary. As regards the applicant's allegation that the calculation of the consumption of scrap based on the sales invoices from February 1957 would entail calculating the same quantities twice, the defendant replies that cross-checking against the amount of electricity used confirms item by item all the data obtained from the purchase and sales invoices. It quotes the Court's Judgment in the Barge Case of 16 December 1963 (Rec. 1963, pp. 562 to 564 and p. 565) in order to prove that it is admissible to produce as evidence the amount of electricity consumed. The defendant's conclusion is that it is for the applicant to prove the inaccuracy of the evidence obtained by the inspectors by producing properly kept accounts. In answer to the applicant's argument relating to the inclusion in equalization of scrap used on contract work the defendant submits that Decision No 14/55 did not introduce any new rules in the matter of equalization of scrap which have been applied from the beginning of the scheme.

(b) Infringement of Decision No 2/57 (Article 2 (2)) and of Decision No 16/58 (Article 4 (2))

According to the applicant the High Authority has infringed the two decisions by failing to take into account, in determining the consumption of bought scrap, the deductions to be made in respect of own total resources and of the decrease in stocks.

The defendant replies that with regard to the deductions to be made for the decrease in stocks, the applicant's representatives told the High Authority's inspectors that the undertaking had never kept any more stocks of scrap than were required for a few days' production.

With regard to the deduction in respect of the applicant's own resources, the defendant points out that it deducted on that account 60 kg for each ton of ingots sold and 138 kg for each ton of finished products. This estimated assessment was made because the applicant refused to give the High Authority any information on the size and composition of its own production and is justified by the Judgment of the Court of of 16 December 1963 in the Case of Mrs Amelia Barge v High Authority (Rec. 1963, p. 534, para. 7).

(c) Infringement of Article 81 of the Treaty in conjunction with Article 80

According to the applicant the inclusion of its special products in the products subject to the common market in coal and steel infringes Articles 80 and 81 of the Treaty. Article 80 only regards as being subject to the Treaty those undertakings which are engaged in production in the coal or the steel industry, as defined, in accordance with Article 81, in Annex I to the Treaty. However, although the applicant undertaking produces steel ingots from time to time, it nevertheless manufactures almost exclusively special plates and dog-spikes for railways. These two products are not included in the products listed in Annex I to the Treaty, since the dog-spikes are not on this list and although item 4400 mentions plates they are described as hot-finished whereas the plates produced by the applicant are for the most part cold-finished. It follows, according to the applicant, that the scrap which it used for the production of special plates and dog-spikes has to be deducted from the tonnage of scrap subject to contribution.

The defendant's reply to this complaint is as follows:

1) Previous proceedings before the Court of Justice disclose either specific estoppels by record so far as this complaint is concerned or admissions of facts by which the parties must be bound. In fact the applicant in its application in Case No 21/64 contested the High Authority's Decision of 8 April 1964 concerning surcharges for delay in paying the levy. The Court dismissed this application by its Judgment of 31 March 1965 (Rec. 1965, pp. 244 to 249). But the applicant does not include in its grounds of action any statement that it is not subject to Community obligations owing to the nature of its production, an objection on which it could have based its application for annulment. Further in its application in Case 22/59 the applicant contested a decision of the High Authority charging it with payment of the levy and surcharges for delay. The grounds relied on in support of this obligation did not dispute the fundamental obligation to pay contributions. The applicant discontinued this application on 20 April 1960 and then paid its contributions relating to the levy, although with certain reservations.

2) The defendant then invokes the Judgment delivered by the Court on 17 December 1959 in the Case Pont-a-Mousson v High Authority (Rec. 1958-1959, pp. 469 to 471) to the effect that the production of goods intended for the market is not the only activity which amounts to production. The result is, the defendant argues, that, even if the final product is outside the Treaty, the actual production of steel is subject to it. And the applicant does not deny that it produces the steel which then undergoes the appropriate treatment for the manufacture of the different products. The defendant says that plates are expressly mentioned in Annex I to the Treaty. With regard to the dog-spikes, during the period from February 1957 to November 1958, their share of the production was 18 metric tons out of a total of 26000 metric tons. The defendant goes on to say that the applicant's case is provided for by the first paragraph of note 3 to Annex I to the Treaty which states that the High Authority shall concern itself with the production of liquid steel for castings only where this is to be regarded as an activity of the steel industry proper. The applicant replies that according to the technical expert's opinion produced in Schedule 42 to its application the plates which it produces are cold-finished products. For this reason this product is not included in the list in Annex I to the Treaty. The same situation arises in the case of fish-plates and dog-spikes. The applicant then draws attention to the fact that among the particulars given in Schedule 4 to the statement of defence are 95 metric tons of small plates, 9348 metric tons of fish-plates and 18 metric tons of dog-spikes, a total of altogether 9461 metric tons of products not subject to the Common Market. Therefore the total amount of finished products sold must, it submits, be reduced from 26368 metric tons to 16907 metric tons and the total amount of assessable scrap reduced accordingly. This shows, it goes on to say, that the checks carried out are not sufficient to determine the relevant factors upon which the applicant undertaking's obligation to pay contributions could be based. The defendant observes that the applicant is wrong when it assumes that, in order to decide whether steel is subject to the Common Market, it is only necessary to know whether the end product does or does not appear under the headings in Annex I to the Treaty; on the contrary, in the case of an undertaking such as the applicant producing different types of products, the end products may fall outside the Treaty. The question to be resolved is whether the steel used by the undertaking for the manufacture of its products is produced by the undertaking itself or by another undertaking. Therefore, the defendant submits, the applicant's argument that it should not be liable to pay contributions on the scrap used to produce special mechanical parts is not conclusive. This reasoning of the applicant would only be justified if it did not itself produce the steel which it uses, which is not the case. Therefore it is the actual production of steel and the prior consumption of scrap which is relevant. (Heading 4100 of Annex I).

(d) Infringement of the first paragraph of Article 47 of the Treaty

According to the applicant the checks for November and December 1961 were carried out by Fidital SpA of Milan, which sent the data obtained to the Société Fiduciaire Suisse (the ‘SAFS’). The results of these checks, carried out illegally by a company which had not been authorized to do so by the High Authority, cannot be used as a basis for the calculation of the assessable amounts.

The defendant replies that according to the Judgment delivered by the Court of 16 December 1963, in the Case of Mrs Amelia Barge v High Authority (Rec. 1963, p. 534, paras. 5, 6 and 7 of the summary) there are no formal or substantive conditions limiting the extent of the High Authority's powers to ‘have checks made’. It follows from this that the undertaking subjected to the check should challenge, not the manner in which the persons instructed to carry out the checks were chosen, but the results of the checks by producing evidence proving that the results of the investigation were wrong.

The defendant goes on to say that even if Fidital is not technically a subsidiary of the SAFS (see Schedule 9 to the application) it is at least closely connected with it because some of the directors are on the boards of both companies.

The applicant replies that, if the presence of an employee of the SAFS, entrusted with the task of carrying out the checks, could give a gloss of legality to the checks carried out in 1958, the same cannot be said of the checks carried out in 1961 exclusively by employees of Fidital. In fact, the applicant argues, the effect of the Judgment of the Court delivered on 16 December 1963 quoted by the defendant is that, even if the High Authority was entitled to authorize the SAFS to carry out the checks, the latter was not entitled to delegate this authority in turn to Fidital.

The defendant replies that the High Authority was well aware that the SAFS had delegated its authority to its subsidiary Fidital and had approved the delegation and that in law when the High Authority makes use of the information obtained on its own instructions by an organization or person considered to be suitable for this purpose it is in fact exercising its own powers. It quotes on this point from the case-law of the Court the Judgments of 16 December 1963 in the Barge Case (Rec. 1963, pp. 559 to 561) and of 14 April 1960 in the Brescia Case (Rec. 1960, pp. 172 and 1973).

2. Submission relating to the individual decision fixing the amount of the contribution claimed from the applicant undertaking

During the oral procedure the applicant claimed that the basis of the contested individual decision applicable until then, namely Decision No 7/63, was destroyed by the adoption by the High Authority on 15 December 1965 of the new general Decision No 19/65 relating to the drawing up of final statements of account for the equalization of imported ferrous scrap and scrap treated as such, which lays down new criteria for establishing the amounts of the contributions payable.

The defendant made no definite reply to this objection.

3. Submissions relating to the illegality of the general decisions upon which the contested individual decisions are based

The applicant begins with a detailed history of the various stages in the development of the equalization scheme.

It points out that the individual decision of 7 April 1965, fixing the amount of the contributions which it is called upon to pay, bases its calculations on general Decision No 7/63 which in turn refers to a series of other general decisions. It therefore states that the legal arguments which it puts forward relating to the general decisions, referred to and repeated by Decision No 7/63, refer also to Decision No 7/63.

The defendant replies that in its opinion no useful purpose would be served if it replied to the applicant's general history of the scheme, because many of the judgments of the Court contain an account, to which reference can be made, of the history of the High Authority's operations supported by decisions of the Special Council of Ministers.

(a) Illegality of Decision No 19/60

According to the applicant, by establishing for the application of Decision No 22/54 an accounting period of 12 months and for the application of Decision No 14/55 an accounting period of 22 months, Article 1 of Decision No 19/60 infringes Article 4(b) and 15 of the Treaty and is defective on the ground of misuse of powers.

It must in fact be noted that Decisions Nos 2/57 and 16/58 limit this accounting period to 3 months and that Decisions Nos 22/54 and 14/55 had given the Imported Ferrous Scrap Equalization Fund (hereinafter referred to by its French initials as the CPFI) the task of establishing the accounting periods on a monthly basis.

The misuse of powers arises out of the fact that the High Authority, on the pretext of the need to apportion the charges more fairly concealed its intention to simplify the accounts and to close them. Article 4(b) of the Treaty has been infringed because there has been unfair discrimination between undertakings and Article 52 has been infringed because the reasons upon which the decision is based are not stated.

The defendant replies that with regard to Decision No 22/54 the CPFI had already laid down an accounting period of 12 months. With regard to Decision No 14/55 an initial period of 9 months laid down by the Fund was followed by another period of 13 months, as a result of the extensions of this Decision. The only innovation introduced by Decision No 14/55 is therefore the combination of the two accounting periods. With regard to the monthly calculations introduced by the Fund, this did not cover the fixing of percentages but the payments by undertakings. The reason for having the two successive accounting periods fixed by the Fund as regards Decision No 14/55 is to bring about uniformity with the practice adopted for Decision No 22/54, so that the accounting periods for each of these decisions correspond to the period during which the latter decision remains in force.

The submission put forward by the applicant can only be substantiated if it proves that it has suffered damage in person as a result of the contested individual decision because of the criteria in Article 1 of Decision No 29/60. With regard to the infringement of Article 4(b) of the Treaty, the effect of the Judgment delivered by the Court on 17 December 1959, in the Case Pont-à-Mousson v High Authority (Rec. 1958-1959, pp. 445 et seq.) is that the applicant must prove that the application of the criticized decisions leads to discrimination between undertakings in the field of competition. With regard to the alleged misuse of powers, this has not been proved at all. On this point the defendant also invokes the case-law of the Court, which lays down that, as a uniform rate of equalization has been held to be compatible with the provisions of the Treaty, the contested decisions remain lawful, even if it were proved that this uniformity was dictated by a concern to avoid administrative complications (Judgment of 12 June 1958, Hauts Fournaux de Chasse v High Authority, Rec. 1958-1959, p. 133, para. 4, summary). The defendant points out that the decided cases of the Court relating to the fixing of uniform rates of equalization for the different qualities of scrap can also be applied to the standardization of the accounting periods.

The applicant replies that the method of calculation used for lengthy periods leads to an assessment which only has a statistical and accounting significance and does not take account of the actual situation of undertakings.

The applicant submits that it has a legal interest in pleading the illegality of Article 1 of Decision No 19/60, because the method of calculation adopted by this decision led, during the period when Decision No 14/55 was in force, to the fixing of equalization contributions at 286 369.16 units of account, that is to say, a little less than half the amount of the total sum claimed.

The applicant then states that, according to the data set out by the defendant in Schedule 2 to its statement of defence, the applicant is said to have purchased 24249.088 metric tons of scrap during the period from April 1955 to January 1957. How, it asks, could it have raised specific objections based on facts which it did not know and which it disputes?

Since, it says, it has been shown that the method of calculation by reference to lengthy periods of time involves the levy of contributions bearing no relation to the objectives and the main purpose of equalization, discrimination between undertakings is implicitly proved by the fact that a uniform rule is applied to those undertakings which are in different situations.

The defendant answers this argument by producing a table of calculations annexed to its rejoinder. The table shows that, if quarterly reference periods for calculation from 1 April 1954 to 31 January 1957 had been laid down in the contested decision, which is what the applicant requests, the equalization charge payable would have been 5022000 lire more than the charge fixed by the contested individual decisions.

Relying on the Judgment of the Court in the Pont-à-Mousson Case on 17 December 1959 (Rec. 1958-1959, pp. 475 and 478) the defendant points out that, since the applicant would not have had to pay a smaller equalization charge if different periods for calculation had been employed, it is not entitled to plead an infringement of Article 4(b) of the Treaty which does not exist in the applicant's particular case or in general.

With regard to the misuse of powers which according to the applicant arises out of the fact that the High Authority was guided mainly by administrative objectives, the defendant submits that misuse of powers is precluded by the fact that no discrimination in the field of competition arose out of the methods by which the High Authority exercised its power with the intention of avoiding shortages in the market for scrap.

(b) Illegality of Decisions Nos 18/60 and 20/60 in conjunction with Decision No 7/63

The applicant disputes the legality of treating so-called expensive scrap on the same footing as imported scrap and criticizes the decisions, which, in defining the amount of imports to be taken into account for the determination of contributions, do not deduct therefrom the amounts which have been fraudulently described as imported scrap.

1) Decision No 22/54, which established the equalization scheme, did not mention scrap treated as imported scrap in Article 1, which defines the aims of the equalization scheme, but only mentions it incidentally in Article 2. Decisions Nos 18/60, 20/60 and 7/63 which make scrap treated as imported scrap subject to equalization from the entry in force of Decision No 22/54 therefore infringed Article 1 of this Decision.

2) None of the general decisions governing the matter gives a definition of scrap, which, if it was expensive, was treated as imported scrap. Therefore Decision No 7/63 and the preceding decisions, which take into consideration certain amounts of scrap treated as imported and base the equalization accounts on these amounts, infringe Article 15 of the Treaty so far as concerns scrap treated as imported which was taken into account and included in the calculation, because it does not state the reasons for preparing the equalization accounts in this way.

3) The scrap which the High Authority itself admits was unlawfully included in the equalization as a result of frauds discovered during the operation of the scheme was included in the total amount of scrap made subject to equalization by Decisions Nos 18/60, 20/60 and 7/63. For this reason these decisions have infringed Decision Nos 22/54 (Articles 2 and 3), Decision No 14/55 (Articles 2 and 5(a)), Decision No 2/57 (Articles 2 and 11) and Decision No 16/58 (Articles 2 and 11(a)). They are in addition defective on the ground of misuse of powers, because the High Authority, which knew that the scrap fraudulently declared could not be accepted for equalization, nevertheless included it in the tonnage admitted to equalization in order to avoid taking any responsibility for it. The defendant replies to begin with that the definition of scrap treated as imported, which is criticized, is the rule setting limits to the High Authority's powers when it exercises a discretionary power. Therefore the applicant should have established that the High Authority committed a specific misuse of its powers when it included expensive scrap treated as imported in its calculation and not that the wording of the disputed provision was too wide. The applicant replies in the first place that with regard to scrap treated as imported the absence of any clear definition of it by the High Authority prevents the Court from carrying out a judicial review of the scrap treated as imported which is included in the calculations made for the purpose of equalization. The continued absence of a concise definition of this concept has prevented any effective supervision and checks by the persons concerned. Further the decision whether scrap treated as imported is to be included in equalization has been left to the discretion of regional officials, although inclusion may have serious financial consequences for some undertakings and considerable advantages for others. The applicant maintains that in these circumstances only scrap from the breaking up of ships or from similar operations can properly be regarded as scrap to be treated as imported, and to treat any other kind of scrap on the same footing is ultra vires and renders the contested decisions illegal. So far as the inclusion of scrap accepted for equalization as the result of fraud is concerned, the applicant states that the defendant's argument regarding the provisional nature of the calculations is inadmissible. In fact the individual decisions based on the general decisions, now alleged to be illegal, impose precisely ascertained financial charges upon undertakings and are enforceable. Further, as the tonnage of scrap brought into equalization by Decision No 7/63 is slightly more than the tonnage mentioned in Decisions Nos 18/60 and 20/60, the 229889 metric tons, which the High Authority admitted in its report to the Assembly on 8 April 1961 to have been accepted for equalization, as the result of fraudulent practices, have not been deducted from the aggregate account of scrap subject to equalization. Decision No 7/63 does not therefore disclose the real state of the checks and corrections made, because two years later it still failed to deduct the scrap admitted to equalization as a result of fraud. This means according to the applicant that the High Authority has acted ultra vires and that the contested decision is therefore illegal. With reference to scrap treated as imported and expensive scrap the defendant replies that, if its price is higher than the price of scrap recovered within the Community, it is nevertheless lower than that of scrap imported from third countries and that expensive scrap would not have been used if, taking into account equalization refunds, its price had remained at a level clearly higher than that of internal scrap and that of scrap imported from third countries. With regard to the complaint that the scrap accepted for equalization as a result of fraud was included in the total amount of scrap, the defendant points out that these amounts are provisional refers to the Judgment of the Court of 21 January 1965 in the Merlini Case ([1965] E.C.R., para. 4, summary). With regard to the frauds the High Authority intends to recover the sums illegally collected by deducting them from the equalization charges when the accounts are finally closed.

As to 1) The defendant points out that Article 2 of Decision No 22/54 is an integral part of the whole of the text and cannot be arbitrarily severed from it.

As to 2) The defendant calls attention to the fact that Decision No 23/58 places the acceptance for equalization of scrap originating mainly from ship-breaking and the salvage of wrecks under the direct supervision of the High Authority and mentions the conditions applicable for this purpose which are in any case clearly set out in the Decision No 2/57 (first recital, Article 2(a) and Article 10(c)).

As to 3) The defendant replies that the applicant is wrong to treat as final the data relating to imported scrap and contributions in Decisions Nos 18/60, 20/60 and 7/63 and also the tables annexed to each of them, which are in fact only successive stages leading to the final and complete liquidation of the entire financial scheme. Therefore, it argues, the applicant's complaint fails if the calculations are not final calculations. It then refers to the decisions of the Court, which dismissed as unfounded the complaints raised against the High Authority by reason of the frauds which had been established, whether from the point of view of mistakes in the calculation of contributions (Judgment of 17 December 1959 in the Feram Case, Rec. 1958-1959, pp. 501 et seq.) or from that of liability for a wrongful act or omission (Judgment in the Feram Case above; Judgment of 14 December 1962 in the Chasse Case, [1962] E.C.R., 381 et seq.; Judgment of 14 December 1962 in the Meroni Case, [1962] E.C.R., 411 et seq. and Judgment of 2 June 1965 in the Feram Case, Rec. 1965, p. 402 et seq.).

(c) Illegality of Decision No 7/63

The applicant submits that a comparison of the tables annexed to Decisions Nos 18/60 and 20/60 and these annexed to Decision No 7/63 discloses different amounts of imported scrap and scrap treated as such subject to equalization. The applicant therefore argues that Decision No 7/63 infringes Decisions Nos 18/60 and 20/60 and Article 15 of the Treaty, because no reasons whatever are given for the alterations appearing in the Annexes.

The defendant replies that this complaint presupposes that the three decisions in question should be considered as definitive. However, according to the Judgment of the Court of 21 January 1965 in the Case Merlini v High Authority ([1965] E.C.R.) these measures are still provisional. The figures given by each successive decision show what stage the investigations and checks have reached and it is to be expected that the amounts will be different.

(d) Illegality of Decision No 26/55

The applicant argues that the scheme designed to ensure a saving of scrap iron by the increased use of pig-iron, introduced by Decision No 14/55, extended by Decisions Nos 26/55 and 3/56 and confirmed by Decisions Nos 2/57 and 16/58, is illegal for two reasons.

1) This provision, which restricts the benefits of such a scheme to economies effected by using Siemens-Martin furnaces (Decision No 26/55) and liquid-charge electric furnaces, (Decision No 3/56), discriminates against undertakings, which, like the applicant undertaking, achieved economies in the use of scrap by consuming much more pig-iron but through the adoption of other production processes and are not therefore able to reap the benefit of the bonus for the scrap saved. The applicant submits that for this reason the contested provision infringes Article 4(b) of the Treaty in conjunction with Decision No 14/55 (Articles 1 and 2(c) and Decision No 2/57) (Articles 1(1) and 2(c)).

2) The before-mentioned decisions infringe Article 15 of the Treaty because the statements of the reasons upon which they are based are defective, as solid-charge furnaces can also effect economies in scrap by making greater use of pig-iron.

3) In support of its submission the applicant produces an expert's report (Schedule 42 to the application) showing that a large amount of pig-iron can be used in the solid-charge electric arc furnace at Borgaro, for the production of steel products by the applicant undertaking. The defendant replies that the expert's report is not conclusive, because it does not establish that in this case the consumption of pig-iron has increased compared with the consumption of scrap or that any such increase led without question to precise production constants. General rules must be based on technical conditions which are certain and do not change. It is not only necessary to have an accurate knowledge of the constant factors in the operation of the production systems under review but also to know whether such factors enable the relationship between the various materials employed for the production of steel to be established a priori. However, these conditions were only ascertained in the case of the two production processes mentioned in Decisions Nos 26/55 and 3/56 to the exclusion of all others. Therefore the applicant had to prove that processes other than those mentioned in the two decisions are of a kind which enable a fixed percentage of economies in the use of scrap to be determined so that they can be included in the provisions of general application. This complaint should be put forward as a misuse of powers since it comes within the discretionary powers of the High Authority, the limits and conditions in which they are exercised being technically the province of the High Authority. With regard to the complaint of discrimination it should be pleaded as discrimination in favour of certain undertakings and not against particular undertakings. The defendant mentions on this point that the Court, after laying down criteria for the interpretation of discrimination in its Judgment of 26 June 1958 in the Case Syndicat de la Sidérurgie du Centre-Midi v High Authority (Rec, 1958-1959 pp. 471 et seq.) gave its view on the application of the concept of discrimination to circumstances similar to the facts of the present case in its Judgment of 17 December 1959 in the Case Fonderies de Pont-à-Mousson v High Authority (Rec., 1958-1959 pp. 449 and 450, paras. 5 and 6, summary). According to the defendant these cases show that the applicant must prove, in support of its submission, that the introduction of advantages in favour of undertakings using the two production processes referred to in Decisions Nos 26/55 and 3/56 creates an unfavourable situation for the other undertakings in the field of competition. The defendant states that it is impossible to show this, because the benefits flowing from these decisions only amount to partial compensation for the expenses incurred directly, by the increased use of pig-iron and liquid Thomas steel or indirectly by technical research. The applicant answers this argument by producing a further opinion of Mr Maiocco, engineer, annexed to its reply, which states that economies in the use of scrap were established during trials carried out at the furnace in operation at the works of the applicant undertaking. It goes on to say, that by pleading the illegality of the contested decision on the ground that the statement of the reasons upon which it is based is incorrect, it is referring to a misuse of powers since the High Authority based its decision on facts not borne out by experience. With regard to the reference by the defendant to the Judgment of 17 December 1959, this is not conclusive, because in the present case the situations under examination can easily be compared with each other. It concludes that the technical expert's further report on which it relies, contains proof of the inadequacy of the reasons upon which the decision is based and of the misuse of powers by the High Authority by only granting the bonus for economies in the use of scrap in respect of the two production processes and not in respect of the system of production used for the solid-charge electric furnace which also effects considerable savings of scrap. The defendant replies that it emerges from the expert's report produced by the applicant that the furnace at Borgaro normally produces steel from scrap and that this method of production is markedly more economical than the other, which involves the use of a greater amount of solid pig-iron. As the technical features of the applicant's furnace make it quite unnecessary for it to use the most costly method, the applicant cannot therefore submit that it has suffered damage compared with the production methods laid down in Decisions Nos 26/55 and 3/56. The defendant adds that the absence of any proof by the applicant to the contrary shows that the applicant, which is able to produce steel from scrap, did not in fact adopt another more costly production process.

(c) Illegality of Decisions Nos 7/63, 18/60 and 20/60 fixing the equalization prices and of the decisions upon which they are based

According to the applicant, Decisions Nos 7/63, 18/60 and 20/60, which fixed the equalization prices of imported scrap and scrap treated as such, and Decisions Nos 9/56, 34/56, 19/58, 15/59 and 39/59 upon which they are based, infringed in the first instance Article 3(b) and (c) of the Treaty because they were in flagrant contravention of the objectives of the Treaty. They also infringed Article 4(b) of the Treaty because they were discriminatory. Finally they infringed the second paragraph of Article 47 because the High Authority did not publish data likely to be useful to governments or other persons concerned.

1) The infringement of Articles 3(b) and (c) and 4(b) of the Treaty consists in the fact that the method of determining the equalization price, carried out in accordance with criteria varying according to the equalization period, but invariably with the object of establishing weighted average prices for specific periods of time, does not take into account the prices actually paid by undertakings in the Common Market. As a result the equalization contribution, calculated by subtracting from the average price of imported scrap the average weighted price of internal scrap, is a charge which affects undertakings unequally, because undertakings which bought scrap in the internal market at prices above the average weighted price of internal scrap pay a greater contribution and the undertakings which bought at lower prices pay a smaller contribution. According to the applicant the High Authority should have adopted different methods of calculation, dispensing with the fixing of averages and working on the actual prices payable by the consumers. The applicant mentions as an example of this that, although according to Annex III to Decision No 7/63 the equalization price for the period from February to April 1957 is 46.57 units of account or 28106 lire, it in fact paid during this period according to the two certificates from its suppliers, which it produces, the price of 33300 lire (Schedules 39 and 40 to the application). According to the applicant the prices of scrap were in general much higher in Italy than in the other Community countries. Therefore the fixing of contributions on the basis of an average equalization price resulted in serious discrimination between the Italian undertakings and the undertakings in the areas where the price was either lower than or equal to the average. In particular, undertakings in the areas where the price of scrap was below the average price benefited first by paying a lower price and secondly by being liable to pay an equalization charge lower than the actual difference between the price paid on the home market and the price of imported scrap.

2) The infringement of the second paragraph of Article 47 of the Treaty lies in the fact that the High Authority should have made known by adequate publication the entire data used to determine the equalization price and, in particular, the average prices determined during the different periods in the different areas of the Community and the quantities included in the calculation of the weighted averages. The defendant replies as follows:

As to 1) In contrast to the figures put forward by the applicant the equalization price for Italy, according to Article 6(2) of Decision No 18/60, is 30381 lire for the period from February to April 1957. This is the figure with which the figure of 33300 lire given by the applicant and the figures of 31500 and 28520 lire respectively given by the suppliers, which produced certificates, must be compared. What is more it regards the certificates produced as declarations made to accommodate the applicant. It produces in support of its argument (Schedule I to the statement of defence) the relevant data showing the changes which had taken place in the price of scrap. The defendant then states that under the first paragraph of Article 33 of the Treaty the Court may not examine the evaluation of the situation, resulting from economic facts or circumstances, in the light of which the High Authority took the contested decisions, save where the High Authority is alleged to have misused its powers or to have manifestly failed to observe the provisions of the Treaty or any rule of law relating to its application. However in the present case the High Authority chose to calculate equalization on the basis of the weighted averages and not on an equalization between the areas inside the Community. The complaint that Articles 3 and 4 of the Treaty have been infringed is certainly not a complaint that there has been a manifest infringement of the Treaty within the meaning of the first paragraph of Article 33 referred to above. The applicant has not pleaded misuse of powers either, not could it do so. For, as the defendant points out, the fact that the High Authority has not included among the objectives of its operations, carried out to achieve different results, the objective of equalizing prices inside the Common Market by crediting or debiting contributions cannot be considered as a misuse of powers, having regard to the fact that according to the principles of the Treaty uniform prices on the internal market must be safeguarded by the creation of a common market based on free competition.

As to 2) The defendant replies that Decisions Nos 18/60, 19/60, 20/60, the tables annexed to them, and Decision No 7/63, are all accompanied by detailed statements of the reasons upon which they are based. Further the High Authority cannot be criticized for ever having failed to supply the necessary information either by publication or orally at its offices. The applicant replies that the prices which it paid for domestic scrap are considerably higher than the equalization prices. In order to prove this it requests the defendant to produce the purchase invoices of the scrap mentioned in Schedule 3 to its statement of defence. It states that the purchase prices of scrap given by its suppliers (Schedules 39 and 40 to the application) are correct and it criticizes the data relating to the changes in the price of scrap produced by the defendant in Schedule 1 to its statement of defence. It then submits that a comparison of the statement of the prices which it paid for domestic scrap with the equalization prices shows that such an unjustified increase in its production costs has occurred a posteriori and indeed after several years, so that it is impossible for the applicant undertaking to carry on its business. It adds that the economic objectives which the defendant claims that the equalization scheme is intended to achieve expressly contravene the fundamental aims of the Treaty. With regard to the complaints of infringement of the second paragraph of Article 47 of the Treaty, the applicant comments that the High Authority is not in a position to explain on the basis of what factors it fixed the equalization price or how it determined them. The defendant replies that the equalization rules took into account the situation in areas such as Italy where the market price is affected by transport costs, because they are a long way from the centres where scrap is salvaged and collected. Therefore if equalization had been carried out in such a way that different equalization prices were fixed for the different regions, a practice moreover which is prohibited by the Treaty, the Italian consumers of scrap would have had to pay a higher charge than the consumers in other countries. The defendant also states that if the scarcity of scrap had not been counteracted by the equalization scheme, there would have been an increase in its price which would have given rise to an intolerable burden, in particular on small undertakings. The defendant argues that the data relating to the price of scrap in the Common Market were based on monthly declarations by undertakings of the prices paid, checked by reference to the purchase invoices. The defendant states that the applicant's request to the High Authority to produce copies of the purchase invoices is inadmissible. It argues that the applicant must produce in support of its conclusions all the purchase invoices in its sole possession. With regard to the complaint of infringement of the second paragraph of Article 47 of the Treaty on the ground that the High Authority has not published periodically the data upon which the equalization price is based, the defendant replies that the OCCF (the Joint Bureau of Ferrous Scrap Consumers) and CPFI provided all the information which the producers asked them to supply either directly or through their regional offices, namely in the case of Italy through Campsider.

IV — Procedure

The pleadings of the parties were lodged within the prescribed time and the procedure followed the normal course.

During the hearing on 18 January 1966, upon reading the preliminary report of the Judge-Rapporteur and upon hearing the Advocate-General, the Court decided to open the oral procedure without prescribing any measures of inquiry but nevertheless called upon the High Authority, the defendant, to produce a summary of the applicant's purchases of scrap for the period from July 1954 to January 1957 classifying individual products and suppliers separately, as a supplement to the list of purchases which it had produced in Schedule 3 to its statement of defence. The defendant lodged this document on 28 January 1966.

The parties presented oral argument at the hearing on 8 February 1966.

Mr Advocate-General Roemer delivered his opinion at the hearing on 22 April 1966.

Grounds of judgment

A — Admissibility

The defendant submits that the claims relating to the general decisions are inadmissible to the extent to which they are aimed at their annulment.

The applicant's submissions are only directed to the annulment of the two individual decisions affecting it made on 7 April 1965 and the application relies on Article 36 of the Treaty which permits individual decisions to be contested on the ground that the general decisions upon which they are based are illegal. Consequently the applicant intends to rely on the illegality of the general decisions upon which the two disputed individual decisions are based.

The application is therefore admissible.

B — The substance of the case

1. Submissions relating to the individual decision fixing the tonnage of scrap subject to equalization

(a) Inadequate statement of the reasons upon which the decision is based

The applicant's complaints relating to the formal statement of the reasons upon which the contested decision is based cannot be upheld, since the decision mentions in summary form the essential considerations of fact and of law upon which it is based and in particular the apportionment of the chargeable amounts of bought scrap between the different accounting periods.

Further, the defendant has given a complete answer to the applicant's allegation that there was an inconsistency in the statement of reasons with reference to the ratio between the input of scrap to the furnace and the production of steel, namely that this input had been calculated first with reference to crude steel and then to finished products.

(b) Inaccuracy of the statement of the reasons upon which the decision is based

The applicant also submits that the content of the findings relating to the consumption of scrap in the contested decision are incorrect.

aa) With regard to the period from April 1954 to January 1957, in respect of which the decision refers to the invoices for the purchase of scrap checked by the inspectors on the spot, the simple allegation of the applicant, which consists only of describing the defendant's findings as absurd, cannot be regarded as having any validity. Since from the beginning of the operation of the equalization scheme disputes arose concerning the declarations and compulsory contributions, the applicant was under a duty to keep all the documents required to prove the alleged inaccuracy of the calculations until the questions still in dispute had been finally settled. The defendant's answer to the applicant's allegation that certain invoices came not from the suppliers of scrap but from transport undertakings was that these invoices apparently related to deliveries of scrap by the Waggon Department of the Italian railways, and the applicant has not adduced any evidence to the contrary. According to the applicant the scrap used in contract work has been included in equalization ever since the scheme came into operation, although rules to this effect were not laid down until Decision No 14/55 was taken. However Decision No 14/55 did not introduce any new rules but merely clarified the principles which applied to equalization from the beginning.

bb) With regard to the period from February 1957 to November 1958 in respect of which the decision refers to data relating to the sale of finished products the applicant disputes the accuracy of the data used. It submits, in particular, that the decision is based on finished products which fall outside the ambit of the ECSC Treaty. It is not disputed that the applicant itself produces the steel required for the manufacture of its finished products. Therefore it is the scrap used as the raw material for the production of steel which has quite properly been made subject to equalization. It was therefore permissible to calculate the consumption of scrap required for the production of crude steel on the basis of the volume of the production of finished products. The applicant also submits that, in calculating the consumption of scrap on the basis of the sales of finished products, it is probable that certain amounts of scrap, which were bought at the end of the period ending in January 1957 were processed into finished products at the beginning of the period commencing in February 1957 and were therefore twice made the subject of equalization contributions. As the High Authority only took into account sales of finished products effected up to the end of November 1958, any such double charge would in any event be offset by the fact that scrap bought and consumed before this date for the manufacture of finished products at a later date was not taken into consideration in calculating the basis of assessment.

cc) The applicant finally criticizes the checking of the consumption of scrap on the basis of the consumption of electricity. Whatever criticisms may be levelled against this method of calculation it was only used in this case to corroborate by means of a cross-check results obtained by another method. The applicant adduces no evidence to support its allegations or in particular to prove the use of large quantities of new pig-iron instead of cast-iron scrap which under the equalization rules is subject to the payment of contributions.

dd) This submission is therefore unfounded.

(c) Infringement of Articles 4 of Decisions Nos 2/57 and 16/58

The applicant claims that the defendant based its calculations exclusively on the consumption of scrap without making any deductions for own arisings and reduction of stocks as provided by Decisions Nos 2/57 and 16/58.

With regard to the deductions for the reduction of stocks; the defendant has showed, without being contradicted by the applicant, that the latter only ever kept sufficient stocks for a few days' production, so that there was no necessity to take the reduction in stocks into consideration for the calculation of the contribution.

With regard to the deductions for the applicant's own arisings, the High Authority made and applied its own estimate, because the applicant failed to supply it with particulars of its own production and because the applicant failed to supply evidence that, owing to special circumstances, the amount of the arisings had been higher than the tonnage taken into account.

For these reasons this complaint is unfounded.

(d) Infringement of Articles 80 and 81 of the Treaty

The applicant submits that the defendant exceeded its powers by including in the basis of assessment to contribution scrap consumed for the production of fishplates, dog-spikes and plates as these products are outside the scope of the ECSC Treaty.

As became apparent during the examination of the first submission it is not disputed that the applicant itself produced the steel required for the manufacture of the abovementioned finished products and that it was therefore the scrap used as the raw material for the production of steel which was quite properly made subject to equalization.

It follows that this submission is unfounded.

(e) Infringement of Article 47 of the Treaty

The applicant submits that, as the checks carried out in 1961 by Fidital were not authorized by the High Authority, they could not be taken into consideration in calculating the amount of chargeable scrap.

The checks carried out by the High Authority pursuant to Article 47 of the Treaty through private auditing companies are not a delegation by it of its powers but the exercise by it of its own powers by making use of information which it has obtained on its own responsibility.

It is not disputed that the High Authority had agreed to the checks carried out by Fidital. It follows that an undertaking subject to investigation cannot dispute the procedures adopted for the selection of those appointed to carry out the investigation but can only challenge the results by adducing evidence that they are incorrect.

Therefore the results of the investigations carried out by Fidital must be taken into account until the applicant proves that they are wrong.

This submission is therefore unfounded.

2. Submission relating to the individual decision fixing the amount of the equalization contributions

During the oral procedure the applicant alleged that the contested individual decision had no legal basis, because the High Authority adopted on 15 December 1965 general Decision No 19/65 relating to the establishment of final accounts for the equalization of imported ferrous scrap and scrap treated as such, which lays down new criteria for fixing the amount of the contributions payable.

In these proceedings the legal situation to be taken into account is that existing when the contested decision was taken. Moreover, since this latter decision was only provisional, the defendant will have to take into consideration the new factors introduced by Decision No 19/65 in order to rectify, if necessary, the amount of the equalization debt which the applicant is liable to pay.

Therefore this submission is unfounded.

3. Submissions relating to the general decisions upon which the contested individual decisions are based

(a) The determination of the accounting periods

The applicant criticizes general Decision No 19/30 on the ground that this decision laid down an accounting period of 12 months for the period during which Decision No 22/54 was to remain in force and an accounting period of 22 months for the period during which Decision No 14/55 was to remain in force.

On this issue the applicant has not adduced any evidence that the adoption of shorter accounting periods would have led to a reduction in the amount of its contributions. On the contrary, the defendant in its rejoinder showed the very opposite, namely that the applicant's equalization debt would have been higher if, in accordance with its request, accounting periods of three months had been applied.

This submission is therefore unfounded.

(b) Inclusion in the calculation of scrap ‘treated as imported’

aa) The applicant submits that scrap treated as imported has been wrongly included in the equalization of prices, so that the total equalization charges and therefore the amount of the contributions payable by the applicant have been increased.

1) Article 1 of Decision No 22/54 only mentions imported scrap with the result that, at least during the period when this decision was in force, scrap treated as such could not be included in the equalization calculation under Decisions Nos 18/60 and 20/60. Article 2 of Decision No 22/54 expressly states that ‘undertakings … shall pay the contributions required to finance the equalization operations in respect of scrap imported from third countries or scrap treated as such’ The argument that neither the heading of Decision No 22/54 nor Article 1 thereof mentions scrap treated as imported cannot be upheld, because a decision like any other legislative provision must be interpreted as a whole.

2) The applicant submits that the expressions ‘expensive scrap’ and ‘scrap treated as imported’ cannot be accurately defined, so that the administration is entitled to decide which kinds of scrap other than imported scrap shall be subject to equalization and that the reasons for this enlargement of the equalization scheme have not been given. The applicant has not proved that the general decisions which it criticizes unequivocally permit the inclusion in the equalization scheme of amounts of scrap which could not on any reasonable basis be so included.

bb) The applicant submits that the equalization calculations are inaccurate, because they include amounts of scrap accepted for equalization as a result of frauds. The statements of account relating to the equalization of scrap are only provisional. It will not be possible until the investigations in progress are completed to ascertain finally the amount of equalization payments obtained by fraud or to determine the amount which may eventually be recovered. Therefore the applicant cannot at present put forward any reason for disputing in this respect the provisional equalization calculations.

cc) For these reasons this submission is unfounded.

(c) Changes in the amounts of scrap brought into equalization

The applicant submits that the equalization calculations are inaccurate inasmuch as the figures relating to the scrap brought into equalization have changed without any explanation of this fact having been supplied by the High Authority.

The statements of account relating to equalization are only provisional and reflect the stage reached in the investigations and checks being carried out.

The requirement that the reasons upon which general decisions relating to equalization are based must be stated does not include an obligation to reproduce in detail all the results of the checks.

This submission is therefore unfounded.

(d) Economies in the use of scrap by the increased use of pig-iron

The applicant submits that the grant of a bonus under Decision No 26/55 for using pig-iron in Siemens and Martin furnaces and the grant of a bonus under Decision No 3/56 for using Thomas steel in electric furnaces amounts to discrimination and distorts the conditions of competition to the prejudice of undertakings which, like the applicant undertaking, use solid-charge furnaces.

The bonus granted to undertakings under the conditions laid down in Decisions Nos 26/55 and 3/56 only amounted to compensation payable to them for the increase in their running costs caused by an increased input of pig-iron. Therefore these undertakings did not derive a financial advantage from the bonus. It follows that the general decisions criticized by the applicant were incapable of either discriminating against it or of distorting the conditions of competition to its detriment.

This submission is therefore unfounded.

(e) The fixing of the equalization prices

aa) The applicant submits that the equalization prices could not have been validly determined because the prices paid for Community scrap have not been accurately established or checked. The facts upon which the calculation of the equalization prices have to be based have been taken from the monthly declarations of undertakings setting out the prices which they paid. The High Authority carefully established the accuracy of these declarations by checking the purchase invoices.

bb) The applicant also submits that the determination of uniform equalization prices for the whole of the Community had a discriminatory effect because of the differences in the prices of Community scrap which in fact existed inside the Community. It claims that in fact the prices which it paid for scrap inside the market were distinctly higher than the equalization prices and that for this reason it has been placed at a disadvantage by comparison with undertakings which could acquire scrap inside the market at a price lower than the equalization price. It is a feature of the market for scrap, that having regard to the place of establishment of the consuming undertakings, there are price variations, which are compatible with the general unity of this market. The equalization price is the weighted average of the different prices ruling on the market. The applicant has not proved that the operation of the equalization scheme has influenced these price differences or that it has increased the disadvantages which it has suffered compared with more favourably placed undertakings.

cc) Finally the applicant pleads infringement of Article 47 of the Treaty on the ground that all the factors necessary to determine the various equalization data have not been published or notified to the undertakings. The rate of contribution and the equalization price, factors which are necessary to enable undertakings subject to equalization to fix their sale prices, were always communicated to them in due time, first by the authorities in Brussels or by their regional offices and later by the High Authority itself. The High Authority is not obliged under Article 47 of the Treaty to make known to the undertakings the other factors relating to equalization calculations.

dd) For these reasons this last submission must be dismissed as unfounded.

4. The request by the applicant for measures of inquiry

It is not necessary to grant the applicant's request for an order that measures of inquiry be adopted. During the proceedings the applicant has had the opportunity to adduce the evidence necessary to support its submissions.

C — Costs

Under Article 69 (2) of the Rules of Procedure the unsuccessful party shall be ordered to pay the costs. The applicant has failed in all its submissions and must therefore be ordered to bear the costs.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the parties; Upon hearing the opinion of the Advocate-General; Having regard to Articles 3, 4, 15, 33, 36, 47, 80, 81 of Annex I to the Treaty establishing the European Coal and Steel Community; Having regard to the Protocol on the Statute of the Court of Justice annexed to the Treaty establishing the European Coal and Steel Community; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, especially Article 69, THE COURT hereby:

1 Dismisses Application 30/65 as unfounded;

2 Orders the applicant to bear the costs.