JUDGMENT OF 15. 12. 1971 — CASE 35/71 SCHLESWIG-HOLSTEINISCHE HAUPTGENOSSENSCHAFT v HAUPTZOLLAMT ITZEHOE

In Case 35/71 Reference to the Court under Article 177 of the EEC Treaty by the Finanzgericht Hamburg for a preliminary ruling in the action pending before that court between

THE COURT composed of: R. Lecourt, President, J. Mertens de Wilmars (Rapporteur) and H. Kutscher, Presidents of Chambers, A. M. Donner, A. Trabucchi, R. Monaco and P. Pescatore, Judges, Advocate-General: K. Roemer Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — Summary of the facts and procedure

1) Article 15 of Regulation No 120/67 of the Council of 13 June 1967 (OJ, English Special Edition, 1967, p. 33) on the common organization of the market in cereals relates to the payment of levies due on the importation of cereal products coming from third countries and provides as follows: This regulation does not specify expressly either what is to be understood under ‘day of importation’ (Paragraph 1) or the conditions which must be fulfilled for the importation to be regarded as effected in cases where the levy is fixed in advance (Paragraph 2).

‘1) The levy to be charged shall be that applicable on the day of importation.

2) However, as regards imports of products listed in Article 1 (a) and (b), the levy applicable on the day on which application for a licence is made, adjusted for the threshold price which will be in force during the expected month of importation, shall be applied to an import to be effected during the period of validity of the licence, if the applicant so requests when applying for the licence.’

2) Nevertheless it is necessary to be able to establish exactly the moment of importation particularly where the goods are in store before the importer disposes of them. This exact determination is indispensable inter alia for the calculation of the rate of levy applicable which is subect to frequent variations, and also to know whether the importation took place within the period provided in the import licence and, possibly, whether it took place within the period covered by the advanced fixing.

3) In the absence of any indication from Community law, which was only provided by the Council Directive of 4 March 1969 (OJ English Special Edition, 1969 (I), p. 82) relating to customs warehousing and Regulation No 1373/70 (OJ, English Special Edition, 1970 (II), p. 439) the German administration applied, in order to determine the time of importation of the agricultural products subject to Community levies, Paragraph 4 of the Abschöpfungserhebungsgesetz (AbErhG—Law on Imposition of Levies) in the version of 3 August 1964 (BGB1 1964, I, p. 569). The first subparagraph of Paragraph 4 corresponds to the provisions of Article 15 (1) of Regulation No 120/67. The second subparagraph relates to fixing in advance and corresponds to Article 15 (2) of Regulation No 120/67. Subparagraphs 3 and 4 are fundamental to the matter and are as follows: However, the view or certain commentators is that subparagraph 4 does not provide any exception to the concept of importation set out in subparagraph 3 but that the day of the removal from store is only regarded as the day of importation for the application of the rate of levy, whereas for the relevant moment for provisions which do not relate to the rate of levy, that is to say, those that concern the quantity, type and value of the goods subject to the levy, that day is to be taken as the day on which an application for clearance of the goods through customs for release into free circulation on the internal market is made.

1) …

2) …

3) The day of importation (Paragraph 1) and also the day which is material for the fixing of the month of importation (Paragraph 2) shall be taken to be the day on which for the first time an application for clearance of the goods through customs for release into free circulation or for the admission of the goods to a particular system of levies is made or becomes effective, or the day on which the goods are registered (Paragraph 39 in conjunction with Paragraph 6 (5) of the Customs Law), or are withheld or removed from customs inspection or are altered in a manner which is not permitted (Paragraph 57 (1) of the Customs Law).

4) If goods are removed from a deterred levy warehouse then the rate of levy applicable on the day of the removal from store shall be applied to these goods. If the rate of levy is fixed in the import licence (Paragraph 2) then the goods removed from store will be treated for the purposes of the application of this rate of levy as though they had been imported in the month in which they are removed from store; if no rate of levy is fixed for the month in which the goods are removed from store than the rate of levy applicable on the day of the removal from store shall be applied'.

4) In addition the German legal provisions in force at the time distinguished between public and private customs warehouses on the one hand and deferred duty warehouses on the other, the latter being restricted to goods which have already been cleared through customs for release into free circulation, but in respect of which the imposition of the duty or levy is deferred for the duration of the storage (Paragraph 46 (1) of the Customs Law).

5) The plaintiff in the main action, the central cooperative of the Land of Schleswig-Holstein, obtained customs clearance during August 1968 for release into circulation on the market 20000 kg of barley covered by an import licence valid until 31 August 1968 and 347000 kg of oats covered by a licence valid until 30 September of the same year. It gave as the date of removal from store 1 August 1968 for the 200000 kg of barley, 9 August 1968 for 147000 kg of oats and 30 August 1968 for the remaining 200000 kg of oats and it paid the levies on the basis of these dates considered as the days of importation.

6) Subsequently it became apparent that the goods did not in fact leave store until various dates between 1 to 19 August as regards the barley and 9 August to 28 November as regards the oats. In view or these findings the Customs Office of Husum claimed from the plaintiff an additional payment of DM 6341 by way of levies. In support of the amended notice it stated that the goods stored in the warehouse under the deferred levy scheme could not be considered as removed for release into circulation until the moment when they were physically removed from the warehouses and that the entries in the books relative to the movements of the goods were not sufficient to satisfy the provisions of German law relating to the imposition of the levy.

7) Since the plaintiffs objection to this amended notice was dismissed on 5 February 1970 it brought the matter before the Finanzgericht (Finance Court) Hamburg. This court found that the solution of (the case depended in particular on the interpretation of Article 15 of Regulation No 120/67 and, by order of 30 June 1971, stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling:

I -)

1) Must Article 15 (1) of Regulation No 120/67/EEC of 13 June 1967 (OJ, English Special Edition 1967, p. 33) be interpreted as meaning that when goods are stored in deferred levy warehouses the date of the removal of the goods from store is to be regarded as the day of importation so that the rate of levy applicable on the date of the removal must be applied?

2) If Question I - 1. is answered in the negative: how is the term ‘importation’ in Article 15 (1) of Regulation No 120/67 to be interpreted? Does this mean the bringing of goods into the customs territory or is it based on the application for clearance of the goods for release into free circulation?

II -)

1) Must Article 15 (2) of Regulation No 120/67 be understood to mean that if goods are stored in deferred levy warehouses the importation must be regarded for the purposes of this provision as effected on the date of removal?

2) If Question II - 1. is answered in the negative: what is the decisive date for the imposition of the levy under Article 15 (2) of Regulation No 120/67 if goods are stored in deferred levy warehouses?

3) It Question II - 1. is answered in the affirmative: what rates of levy are applicable if the removal of the goods from the deferred levy warehouse does not take place until after the expiry of the period of validity of the import licence?

8) The Commission of the European Communities, the Federal Republic of Germany and the plaintiff in the main action submitted written observations. On hearing the report of the Judge-Rapporteur and the views of the Advocate-General, the Court decided not to hold any preparatory inquiry. The plain tiff in the main action, the Commission of the European Communities and the Federal Republic of Germany presented oral argument at the hearing on 9 November 1971. The plaintiff in the main action was represented by Mr Modest of the Hamburg Bar. The Commission was represented by its Legal Adviser, Mr Gilsdorf. The Federal Republic or Germany was represented by its Agent, Mr Morawitz. The Advocate-General delivered his opinion at the hearing on 30 November 1971.

II — Observations submitted in accordance with Article 20 of the Protocol on the Statute of the Court of Justice

The observations submitted in accordance with Article 20 of the Protocol on the Statute of the Court of Justice may be summarized as follows:

A — Question I (1 and 2) (the interpretation of paragraph 1 of Article 15 of Regulation No 120/67)

The Government of the Federal Republic of Germany observes that the meaning of the term ‘day of importation’ in Article 15 (1) of Regulation No 120/67 was, at the time in question, in no way more closely defined and that it was only established more clearly by Regulation No 1373/70 (OJ, English Special Edition, 1970 II, p. 439). In these circumstances the national authorities entrusted with the implementation of the Community regulations have to define and interpret these terms in conformity with Community law.

There then arises the question whether the national rules adopted in order to implement Regulation No 120/57 and, in particular, Article 4 of the Law on the imposition of levies (Abschöpfungserhebungsgesetz) in the version in force at the time in question is compatible with Article 15 (1) of Regulation No 120/67/EEC. The national court should have submitted this question for a Dreliminarv ruling.

The German government describes the relevant provisions of German law in 1968 as follows:

The day of importation was, in principle, the day on which the first request for the release of the goods into free circulation was made or took effect (Paragraph 4, Abschöpfungserhebungsgesetz). Nevertheless this provision was to be interpreted taking account of the details of the rules in relation to warehousing in force in Germany.

Before the change in the rules relating to warehousing brought about by the Law of 22 July 1969 (BGB1. I, 879) the German customs legislation distinguished between public and private warehouses (Zollgutläger) and private deferred duty warehouses (Zollauschubläger or, for agricultural products, Abschöpfungsaufschublager).

In these deferred duty warehouses, such as the one owned by the applicant, the goods were only admitted after having been subject to a declaration of release into free circulation.

Nevertheless in spite of the fact that these goods were intended to be sold on the internal market, the payment of customs dues was suspended for as long as they remained in these deferred duty warehouses which were, moreover, with regard to agricultural products subject to levy, named ‘deferred levy warehouses’ (Paragraph 46 of the Zollgesetz of 14 July 1961).

In spite of the difference between the customs warehouses and the deferred duty warehouses the two were deemed to be the same for the purposes of matters relating to import licences.

Prior production of an import licence was required in neither case for the admission of goods into store.

In fact, goods placed in deferred levy warehouses were not, because of the supervision to which they remain subject, regarded as being in free circulation and could even be reexported in so far as they had not left the warehouse for release into free circulation without any customs provision. From an economic point of view, deferred duty warehouses may be regarded as the same as open customs warehouses where, too, imported goods could not compete with products subject to common organization of the market.

In this context paragraph 4 (4) of the Law relating to the imposition of levies provides that the rate of levy to be applied for products leaving deferred levy warehouses is the rate in force on the day of leaving the warehouse. This provision is in conformity with the rules established by the Council Directive of 4 March 1969 (Article 10) for customs warehouses. Open customs warehouses and deferred levy warehouses can be assimilated and it must therefore be concluded that the German national scheme is in conformity with Community law.

The first question should therefore be answered in the affirmative.

The plaintiff in the main action observes also that the term ‘day of importation’ had not been defined by the Community regulations before the Council Directive of 4 March 1969 and Regulation No 1373/70.

While tooth these Community provisions were not applicable at the time of the dealings in question they may nevertheless be relied on in so far as they reveal the interpretation which the Council and Commission placed on this concept. However, these Community provisions (in particular Regulation No 1373/70, Article 15, the Directive of 4 March 1969, Articles 1 (2), 8 and 10) clearly show that there is no importation within the meaning of Article 15 (1) (and the effecting of an import within the meaning of Article 15 (2)) of Regulation No 120/67 until the goods are removed from the customs warehouse and are thus released into free circulation.

Moreover the Directive of the Council of 4 March 1969 wholly conforms to the aims and spirit of the common organization of the markets. Levies should be imposed on foreign goods released into free circulation in the territory of a Member State of the Community. It is only subject to this condition and at that time that the levies can have an effect on the internal market of the Member States and of the Community. Nevertheless imported goods only arrive on the free market when the importer releases them into free circulation or when they are removed from customs supervision for other reasons (such as theft or fraudulent importation).

The criterion of the release of the goods into free circulation is only fulfilled by the action of the warehouse keeper which has the effect of altering the legal situation and by which he expresses his intention of putting an end to the customs supervision.

The plaintiff in the main action therefore proposes that the Question I (1 and 2) should be answered to the effect that where goods are stored in a deferred levy warehouse, the day of removal from store must be considered as the day of importation within the meaning of Article 15 (1) of Regulation No 120/67. The Commission of the European Communities observes that it is important for the expression ‘day of importation’ to be defined, at least as to its essential elements, in a uniform manner for the Community and that to this extent it should be removed from the national legislative jurisdiction.

As the Community provisions give no decisive indications in this respect, the concept of ‘the day of importation’ must be derived from the spirit and aims of

Article 15 (1) of Regulation No 120/67 and from the function of this article within the context of provisions for the common organization of the market relating to levies and to importation.

Relying on these criteria, the Commission concludes that importation occurs when the goods are finally and irrevocably put into free circulation in such a way that the importation can no longer be revoked. Where goods are stored in customs warehouses this means that the day of removal from the warehouse must be considered as the day of importation since the goods are only finally put into free circulation in the common market when they are removed from store.

In support of its view the Commission relies on the following arguments:

In view of the fact that the aim of the levy is to compensate for fluctuations in the world prices, the moment at which the goods have a decisive influence on trends on the market in the Community must be taken into account, that is to say, the moment when the goods were in fact introduced on the internal market. It would be hardly realistic to take an earlier moment. There sometimes occur substantial delays between the entry into the customs territory and the actual putting into free circulation. Choosing the first moment as the day of levy might have the result of applying different rates of levy to goods which are put into free circulation simultaneously.

The ratio of the Directive of 4 March 1969 leads to the same conclusion. Indeed the Directive states that the date of removal from store must be taken into account for the calculation of the rate of levy. Customs warehouses are characterized by the particular fact that the goods stored there are not considered as being in free circulation. This latter factor is therefore decisive.

The rules relating to import licences lead finally to the same conclusion. Importation within the meaning of the licensing rules is only finally accomplished after the clearance of the goods through customs for release into free circulation (See inter alia Regulation No 1373/70, Articles 4 and 15). The same concept should be applied with regard to the imposition of the levy.

Applying this principle to the situation existing in Germany in 1968 with regard to goods stored in deferred duty warehouses, the Commission states that in such warehouses goods could not be considered as having been put into free circulation in the Community when being given ‘customs clearance for the purpose of admission to the deferred duty warehousing scheme’. That is why the German legislature itself decided to apply the rate of levy on the day of removal from store (Paragraph 4 (4) of the Abschopfungserhebungsgesetz), thus conforming to Community Law.

The commission therefore suggests the following answer to Question I (1 and 2):

‘Article 15 (1) of Regulation No 120/67 must be interpreted as meaning that the day of removal from store must be regarded as the day of importation where the goods are stored in a deferred levy warehouse within the meaning of the provisions in force in the Federal Republic of Germany before the entry into force of the Directive of 4 March 1969 relating to customs warehousing procedure. The rate of levy to be applied is consequently that in force on the day of removal from store.’

B — Question II (1 and 2) (interpretation of Article 15 (2) of Regulation No 120/67

The Government of the Federal Republic of Germany observes that before the entry into force of Regulation No 1373/70 no provision of Community law had yet stated at what moment importation was to be regarded as effected. It follows that at the time in question (1967 to 1968) the national provisions remained in force.

The German legislation concerned with external trade (AWV) regarded the importation as effected once the entry formalities had been completed. In the case of deferred duty warehouses this was only completed when the import licence had to be submitted, that is to say, from the time when the goods ceased to be under customs supervision in other words, when they were removed from store. Paragraph 4 (4) of the Abschopfungserhebungsgesetz provides consequently, that when the rate of levy was fixed in an import licence, the products were to be treated, as regards the application of this rate of levy, as though they had been imported during the month in which they left the warehouse (or in certain cases, on the day on which they left the warehouse).

The rules of German law thus established are compatible with Article 15 (2) of Regulation No 120/67.

The plaintiff in the main action observes that the question of the national court relates to the case where the import licence is only sought and issued after storage in the deferred levy warehouse. In its view in the import transaction is only effected on the day of removal from store. The fixing of a levy in advance in an import licence can there-Fore occur when the goods are already in store.

This solution in no way contradicts the objectives of the common organization of the agricultural market and, in particular, the system of the fixing of levies in advance. The system of advance fixing in fact enables a dealer to make a declaration of fixing in advance without having to supply proof of the purchase of the goods and the date thereof and their resale in the Community. His only obligation is to import during the validity of the licence.

The plaintiff observes that the reply to Question II (2) is superfluous. The Commission observes that in view of its prior submissions the answer must be that the import transaction must only be effected on the day of removal from store.

This interpretation is corroborated by the system of fixing in advance. This system is wholly based on the requirement that in the event of fixing in advance, importation must actually take place during the prescribed period. This requirement is breached if the date of importation is fixed in such a way that the importer complies with his obligations under the import licence even if the goods never reach the Community market (as could happen, for example, if the day of entry into store was regarded as the day of importation).

The Commission suggests the following answer to Question II, 1 and 2: ‘Article 15 (2) of Regulation No 120/67 must be interpreted as meaning that if goods are stored in deferred levy warehouses of the kind mentioned above, the import transaction for the purpose of this provision, must be considered as being effected on the day when the goods leave the store.’

There can be no doubt about the solution in national law. The Official interpretation given by the German administration clearly shows that ‘removal from store’ (within the meaning of Article 28 Z.G. and of Article 4 (3) of the Abschopfungserhebungsgesetz) must be understood to mean the physical leaving of the store (except in cases of movement within one silo divided up into different compartments with the permission of the administration).

C — Question II (3)

The Government of the Federal Republic of Germany observes that the question put by the national court presupposes that there has already been decided the question whether ‘removal from store’ means the actual removal or whether the book-keeping operations describing the goods as having left the store may be sufficient.

The solution thus adopted by German law for deferred duty warehouses was followed by Community law, particularly by the Directive of 4 March 1969 in respect of the private warehouses which in German law replaced deferred duty warehouses.

It must therefore be replied that mere recording of movements in the books cannot be regarded as importation within the meaning of Community law or as removal from store.

Consequently where the actual leaving occurred after the expiry of the validity of an import licence containing an advance fixing of the rate of levy, the rate of levy applicable on the day of leaving the warehouse must be applied.

The plaintiff in the main action observes that the question referred seeks in fact to know what is meant by ‘removal from store’ that is, whether the removal is completed once the owner of the store makes a declaration to the customs office responsible for supervision purposes and that he has effected the removal from the register required for supervision purposes or whether it only occurs when the goods in fact physically leave the warehouse.

The solution to this question must be uniform in all the Member States: indeed if the concept ‘day of importation’ must be given a Community interpretation the same principle should apply with regard to the term ‘removal from store’ which is the equivalent of the ‘day of importation’ when the entry into free circulation is made from a warehouse.

The plaintiff observes that private and free warehouses of the type involved in the present case are characterized by the fact that the person storing goods has a large measure of control over the goods stored since they are not under seal. All transactions are made, to a great extent, on the basis of the confidence reposed in the proprietors of warehouses and the customs authorities do not intervene in most operations.

The ‘removal from store’ requires that the declaration of leaving the warehouse should be made and that this should be recorded in the books of the warehouse by their keeper, thus making apparent from the books the intention of putting the goods into free circulation, both operations being public in nature.

These actions entail, in turn, two others on the part of the Customs Office: termination of supervision and the issue of the notice of assessment to levy to the warehouse keeper.

The goods are therefore actually put into free circulation whether or not they are in fact removed from the warehouse on the day of the declaration and the deletion from the books.

To require on the other hand an actual removal from store would be to insist unduly on formalities which would require, for each amount sold, either removal to another silo in the same depot, until the buyer in fact comes to remove the goods, possibly in small consignments, or an actual removal, requiring completion of a renewed declaration for each small consignment removed or transferred. Such a requirement places at risk the system of free warehousing, imposes a heavy burden on the customs service and gives rise to the possibility of abuse.

Moreover such a solution is contrary to that accepted for exports by Regulation No 1041/67, namely that it is the declared intention of the exporter which determines the moment of exportation. The plaintiff in the main action therefore suggests the following answer:

‘Goods are removed from a customs warehouse or from a deferred levy warehouse within the meaning of Article 15 of Regulation No 120/67 when the goods are actually removed before the declaration of the Customs Office responsible for its supervision has been completed or where the removal has been notified to the Customs Office responsible for the supervision and where the putting into free circulation of the goods has been made public by its removal from the registers stocks necessary for supervision. If at this moment there exists no valid import licence, the rate of levy applicable is: (a) the rate in force on the day when the goods were in fact removed, where the removal of the goods occurred before or without being notified to the Customs Office responsible for its supervision; (b) where a declaration has been made to the Customs Office responsible for the supervision and for the removal from the stocks registers: the rate in force on the day when these two acts are completed even if the actual removal of the goods from warehouse occurs later.’

Finally it is the practice of the German customs authorities to take account of the day of the declaration of removal in calculating the levy where the actual removal occurs not too long after the declaration which indicates that the decisive factor is the declaration. The importance of the declaration is undeniable since this declaration is of an irrevocable and final nature.

The Commission observes that the validity of the rates of levy fixed in advance also comes to an end on the expiry of the validity of the import licence. Goods removed from store after the expiry of the period are therefore subject, in accordance with Article 15 (1) of Regulation No 120/67, to the rates of levy applicable on the day of removal from store (in spite of the fact that they are removed from the warehouse without a valid licence since the provisions of Article 15 (1) remain applicable independently of the question of validity of the licence).

The Commission adds that the problem apparently also arises of how ‘removal from store’ is to be understood. Nevertheless this is a question for national law and the national court has expressly reserved, in the order making the reference to the Court, the right to decide this point. Nonetheless in so far as this point should be decided by the Court, it is proper that the Court should leave to the national law the task of deciding what constitutes removal from store, provided that this term must be defined or interpreted in national law in such a way that the removal from store constitutes a final release of the goods into circulation in the Community. It is not impossible that a final putting into free circulation may occur by book-keeping operations in so far as these are not revocable and enable it to be determined in a certain manner, whether or not the goods have finally been released into free circulation.

Grounds of judgment

1. By an order received at the Court on 30 June 1971 the Finanzgericht Hamburg, pursuant to Article 177 of the Treaty establishing the EEC, referred various questions which relate essentially to the interpretation of the terms ‘day of importation’ and ‘import effected’ contained in Article 15 of Regulation No 120/67/EEC of the Council on the common organization of the market in cereals.

The first question (I (1 and 2))

2. The Court is asked first to decide whether Article 15 (1) of that Regulation must be interpreted as meaning that when goods have been stored in deferred duty warehouses, the date of the removal of the goods from the warehouse must be regarded as the day of importation and, consequently, as determining the rate of levy. The grounds of the order making reference show that this question concerns imports from third countries into the Federal Republic of Germany of barley stored in a deferred duty warehouse. Although, according to the German law in force at the time, goods were only admitted into deferred duty warehouses after their clearance through customs for release into free circulation, payment of the levy was suspended for the period of storage, the goods remain subject to the supervision of the Customs Office and capable of being re-exported. It must be examined what rate of levy is to be applied to the goods upon their removal from store.

3. According to Article 15 (1) of Regulation No 120/67 the levy to be imposed is the levy applicable on the day of importation. The concept ‘day of importation’, which is conclusive for the purposes of the application of the levy scheme must have the same meaning in all the Member States, since otherwise there is a danger that different rates of levy would be applied to goods which are in the same situation economically at the same date and the introduction of which into the territory of the Member States has comparable effects on the market in agricultural products. This meaning is to be inferred from the purpose of the levy system. The levies are mainly intended to protect and stabilize the Community market, in particular by preventing fluctuations in world market prices from having repercussions within the Community. This aim is best achieved if the levy is fixed on the basis of the day from which the imported goods exercise and influence on the internal market of the Community, that is to say, the date on which they finally reach this market and enter into competition with domestic products. The rate of levy applicable must therefore be that in force on the date on which the goods are irrevocably put into free circulation.

4. If the goods have been moved into a customs warehouse and subjected to supervision by the customs authorities, and if they can still be re-exported without undue cost, they cannot be regarded as irrevocably put into free circulation. This condition is not fulfilled until the goods are removed from store. Accordingly, in cases such as that described in the question, the day of importation within the meaning of Article 15 (1) is the date of removal from store so that the rate of levy applicable on this date must be applied.

The second question (II (1 and 2))

5. The Court is further asked to decide whether Article 15 (2) of Regulation No 120/67 must also be interpreted as meaning that if goods are stored in deferred levy warehouses, the import transaction must be regarded as effected on the date of removal from store. It is evident from the order for reference that this question concerns certain consignments of oats imported into the Federal Republic of Germany from a third country which were stored in a deferred levy warehouse and for which there was an import licence with a rate of levy fixed in advance.

6. Article 15 (2) of Regulation No 120/67, which deals with the fixing of the levy in advance, provides, by way of exception to the rule contained in paragraph 1, that the levy which is applicable on the day of submission of an application for the import licence in that the importer seeks the benefit of the advance fixing of the levy may, at his request, be applied provided that what is involved is an ‘import to be effected’ during the period of validity of the said import licence. For the purposes of ascertaining in what cases the import has taken place during the period of validity of the import licence, the Court is asked to interpret the phrase ‘import to be effected’ by deciding at what time this occurs. Thus the Finanzgericht seeks to know, by means of the interpretation requested, what date is to be regarded as the day of importation in the cases mentioned in Article 15 (2).

7. The reasons which were decisive for the interpretation of the concept ‘day of importation’ in Article 15 (1) also apply to the interpretation of the same concept in Article 15 (2). It must therefore be answered that the import is effected when the goods are removed from store.

The third question (II (3))

8. The national court further asks what rate of levy is applicable if the removal of the goods from deferred levy warehouses does not take place until after the expiry of the period of validity of the import licence but the rate of levy was fixed in advance. It is apparent from the documents in the case that although the removal of the goods stored was notified and the transfer out was recorded in the stock records during the period of validity of the import licence, most of the goods were not removed from the warehouse until after expiry of the validity of the import licence.

9. In order to answer this question it must first be decided whether the removal from store can only be effected by the physical removal of the goods or Whether it can also ensue from book-keeping operations.

10. Although the Community law applicable at the time did not expressly regulate this question it follows from what has been said in relation to the first two questions that it is necessary, and also sufficient, in order to constitute removal from store, that the goods are irrevocably put into free circulation. It is for the legislation of the individual Member States to stipulate in detail what factual circumstances or what customs formalities fulfil this condition.

11. Moreover, the rate of levy fixed in advance is no longer applicable if the goods are removed from store after the expiry of the period of validity of the import licence. If in spite of this they are still imported, the rate applicable on the day of importation must be applied in accordance with Article 15 (1).

12. Therefore it must be held that in the case of goods in respect of which the levy has been fixed in advance which have not been removed from store until after the expiry of the period of validity of the import licence, the rate of levy applicable on the date of removal from store must be applied.

Costs

13. The costs incurred by the Commission and the Federal Republic of Germany which submitted observations to the Court are not recoverable. As these proceedings are, so far as the parties to the main action are concerned, a step in the action pending before the national court, the decision on costs is a matter for that court.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the observations of the plaintiff in the main action, the Government of the Federal Republic of Germany and the Commission of the European Communities; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Article 177; Having regard to Regulation No 120/67 of the Council of 13 June 1967; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, THE COURT in answer to the questions referred to it by the Finanzgericht Hamburg by order of 28 May 1970, hereby rules:

1 As regards goods in deferred levy warehouses, Article 15 of Regulation No 120/67 of the Council of the European Economic Community must be interpreted as meaning that the day of importation or of the effecting of the import is the day on which the goods are removed from the warehouse, which implies that they are irrevocably put into free circulation.

2 Where goods in respect of which the levy has been fixed in advance are not removed from store until after the expiry of the period of validity of the import licence, the rate of levy applicable on the day of removal from store must be applied.