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It is apparent from Article 7 of Directive 2008/118/EC (‘the Directive’) that excise duty on tobacco products becomes chargeable at the time of release for consumption and at the rate then in force. Article 9 of the Directive provides that the chargeability conditions and rate of excise duty to be applied are to be those in force on the date on which duty becomes chargeable. Once the products in question have been released for consumption, there is no provision in EU tax legislation which gives Member States the option of imposing on such products, having regard to the date on which they are released for consumption, excise duty in addition to the duty payable or of restricting the distribution of the products for fiscal reasons.

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In Portugal, under Decree No 1295/2007 of the Ministry of Finance and Public Administration (‘the Decree’), cigarette packets bearing a stamp for a given financial year may be sold and marketed only until the end of the third month of the year following that corresponding to the year shown on the stamp, namely the year in which they were released for consumption. As a transitional measure, the Decree provided that the time-limit for sale was fixed at the end of May 2008 for cigarette packets bearing the 2007 stamp and at the end of April 2009 for products bearing the 2008 stamp.

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The Commission therefore took the view that the Portuguese legislation in question infringes Article 7 and the first paragraph of Article 9 of the Directive, while not ruling out the possibility that that legislation may be justified on grounds relating to the public interest.

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However, the Commission submits that the reasons put forward by Portugal during the administrative phase of the procedure to justify that legislation (the prevention of tax evasion and avoidance, the protection of public health, the fight against illicit trade in tobacco and ensuring the receipt of tax revenue) are not acceptable as the principle of proportionality is infringed.

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Article 39(3) of the Directive establishes that Member States are to ensure that tax markings do not create obstacles to the free movement of excise goods. The prohibition introduced by Portugal has created such obstacles by providing that cigarette packets bearing a stamp for a given financial year may be sold and marketed only until the end of the third month of the year following that corresponding to the year shown on the stamp. The fear of importers that they will be unable to offload existing stocks which cannot be sold if the rate of the duty is altered may deter them from making their normal purchases, especially from other Member States, thereby affecting trade to extent greater than necessary, in order to combat, for example, an excessive rise in consumption before the excise duty is increased.

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The Commission therefore takes the view that the prohibition on sales and marketing resulting from the Decree creates obstacles to the free movement of goods within the meaning of Article 39(3) of the Directive and goes beyond what is necessary to prevent evasion, avoidance or abuse. As a consequence, the prohibition is also at odds with Article 39(3) of the Directive and with the principle of proportionality.