–

Quadrant Amroq Beverages SRL, by D.-D. Dascălu, avocat,

–

the Romanian Government, by E. Gane and A. Rotăreanu, acting as Agents,

–

Ireland, by M. Browne, A. Joyce and M. Tierney, acting as Agents,

–

the Polish Government, by B. Majczyna, acting as Agent,

–

the European Commission, by A. Armenia and C. Perrin, acting as Agents,

1

This request for a preliminary ruling concerns the interpretation of Article 27(1)(e) of Council Directive 92/83/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on alcohol and alcoholic beverages (OJ 1992 L 316, p. 21) and the principles of proportionality and effectiveness.

2

The request has been made in proceedings between Quadrant Amroq Beverages SRL and Agenţia Naţională de Administrare Fiscală – Direcţia Generală de Administratare a Marilor Contribuabili (National Tax Administration Office – Directorate-General for the Administration of Large-scale Taxpayers, Romania; ‘the competent tax authority’) concerning reimbursement of excise duties paid by that company on ethyl alcohol.

3

The twenty-second recital of Directive 92/83 states:

‘Whereas Member States should not be deprived of the means of combating any [evasion], avoidance or abuse which may arise in the field of exemptions’.

4

Article 19(1) of that directive provides:

‘Member States shall apply an excise duty to ethyl alcohol in accordance with this Directive.’

5

The first indent of Article 20 of that directive states:

‘For the purposes of this Directive the term “ethyl alcohol” covers:

6

Article 27(1)(e) and (2)(d) of that directive is worded as follows:

‘1.   Member States shall exempt the products covered by this Directive from the harmonised excise duty under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of such exemptions and of preventing any evasion, avoidance or abuse:

…

…

2.   Member States may exempt the products covered by this Directive from the harmonised excise duty under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of such exemptions and of preventing any evasion, avoidance or abuse, when used:

…

7

Article 24 of Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (OJ 1992 L 76, p. 1), as amended by Council Regulation (EC) No 807/2003 of 14 April 2003 (OJ 2003 L 122, p. 36), provided:

‘1.   The [European] Commission shall be assisted by a committee referred to as the “Committee on Excise Duties”.

…

4.   In addition to the measures referred to in paragraph 2, the Committee shall examine the matters raised by its chairman, either on his own initiative or at the request of the representative of a Member State, concerning the application of Community provisions on excise duties.

…’

8

Recital 2 of Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12 (OJ 2009 L 9, p. 12) states:

‘Conditions for charging excise duty on the goods covered by Directive [92/12], hereinafter “excise goods”, need to remain harmonised in order to ensure the proper functioning of the internal market.’

9

Article 1(1)(b) of Directive 2008/118 provides:

‘This Directive lays down general arrangements in relation to excise duty which is levied directly or indirectly on the consumption of the following goods (hereinafter “excise goods”):

…

10

Article 4(1) and (9) of Directive 2008/118 states:

‘For the purpose of this Directive as well as its implementing provisions, the following definitions shall apply:

…

11

Article 7(1) and (2) of that directive provides:

‘1.   Excise duty shall become chargeable at the time, and in the Member State, of release for consumption.

2.   For the purposes of this Directive, “release for consumption” shall mean any of the following:

12

Chapter 22 of the CN includes the headings 2207 and 2208, which are worded as follows:

13

Chapter 33 of the CN includes the following heading:

14

According to point 1 of the document of the Committee on Excise Duties entitled ‘Guidelines adopted at the meeting of 12, 13 and 14 November 2003’ (document CED No 458 of 19 November 2003), ‘the delegations accept almost unanimously that the exemption provided for in Article 27(1)(e) of Directive [92/83] applies from the production stage or the importation onwards to flavourings of CN codes 1302 1930, 2106 9020 and 3302, in the versions in force at the time this guideline is adopted’.

15

Article 20658(1)(e) of Legea nr. 571/2003 privind Codul fiscal (Law No 571/2003 establishing the Tax Code) of 22 December 2003 (Monitorul Oficial al României, Part I, No 927 of 23 December 2003; ‘the 2003 Tax Code’), in force until 31 December 2015, provided:

‘Ethyl alcohol and the other alcoholic products referred to in Article 2062(a) are exempt from excise duty when they are:

…

16

The wording of that provision was reproduced in Article 397(1) of Legea nr. 227/2015 privind codul fiscal (Law No 227/2015 establishing the Tax Code) of 8 September 2015 (Monitorul Oficial al României, Part I, No 688 of 10 September 2015; ‘the 2015 Tax Code’), which entered into force on 1 January 2016.

17

The implementing rules for the implementation of Article 20658 of the 2003 Tax Code provided:

‘…

…

…

…

…

18

The implementing rules for the implementation of Article 397 of the 2015 Tax Code provide:

‘…

81.   

82.   

19

Section 77(a)(iii) of the Finance Act 2003 transposes Article 27(1)(e) of Directive 92/83 into Irish law. It provides that:

‘Without prejudice to any other relief from excise duty which may apply, and subject to such conditions as the Commissioners may prescribe or otherwise impose, a relief from alcohol products tax shall be granted on any alcohol products which are shown to the satisfaction of the Commissioners:

20

Concentrate Manufacturing Company Ireland Ltd (‘CMCI’) is an Irish subsidiary of PepsiCo, a multinational company that produces foods and beverages. CMCI uses 100% undenatured ethyl alcohol, falling under CN heading 2207, to manufacture flavours that come under CN heading 3302. Those flavours have an actual alcoholic strength exceeding 1.2% volume and are intended for the preparation of non-alcoholic beverages.

21

CMCI produces those flavours in Ireland and sells them to another Irish subsidiary of PepsiCo, Pepsi Cola International Cork (‘Pepsi Ireland’). The latter company sold flavours to the applicant in the main proceedings, which uses them to produce soft drinks in Romania. CMCI delivered the flavours at issue directly to the applicant in the main proceedings.

22

The applicant in the main proceedings does not have the status of registered consignee and Pepsi Ireland does not have the status of authorised warehousekeeper. On the other hand, CMCI is an authorised warehousekeeper.

23

Between 2011 and 2014 and between January and August 2016, the applicant in the main proceedings paid 3702961 Romanian lei (RON) (approximately EUR 752787) in respect of excise duty on the flavours at issue in the main proceedings. In September 2016, it applied for a rebate of that amount.

24

The competent tax authority refused that application on the ground that Article 20658 of the 2003 Tax Code, now Article 397 of the 2015 Tax Code, provides for an exemption from excise duty only for ethyl alcohol and other alcoholic products used for the production of food flavourings intended for the preparation of food or non-alcoholic beverages with an alcohol content not exceeding 1.2% volume. That authority takes the view that, in so far as the applicant in the main proceedings manufactures non-alcoholic beverages from food flavours containing alcohol, that exemption is inapplicable.

25

In addition, according to that authority, the exemption cannot be granted since the applicant in the main proceedings does not have the status of registered consignee and Pepsi Ireland does not have the status of authorised warehousekeeper.

26

Under Irish tax legislation, alcohol used for the production of flavours for the preparation either of foodstuffs or of beverages not exceeding 1.2% volume comes within the exemption provided for in section 77(a)(iii) of the Finance Act 2003, which transposes Article 27(1)(e) of Directive 92/83 into Irish law. That exemption applies to ethyl alcohol used not only in the production of those flavours, but also in all subsequent sales.

27

However, the competent tax authority takes the view that those flavours must be subject to excise duty.

28

After the competent tax authority, by decision of 22 June 2017, rejected a tax appeal of 28 December 2016 lodged by the applicant in the main proceedings, the latter brought an action against that decision before the referring court, the Tribunalul Bucureşti (Regional Court, Bucharest, Romania). That court is uncertain as to the interpretation of Article 27(1)(e) and (2)(d) of Directive 92/83.

29

In those circumstances, the Tribunalul Bucureşti (Regional Court, Bucharest) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

30

The Romanian Government challenges the admissibility of the request for a preliminary ruling on the ground that the referring court has not provided the Court with the information required by Article 94(c) of the Rules of Procedure of the Court of Justice.

31

According to the settled case-law of the Court, the procedure provided for in Article 267 TFEU is an instrument of cooperation between the Court and the national courts by means of which the Court provides the national courts with the points of interpretation of EU law which they need in order to decide the disputes before them (judgments of 20 June 2013, Impacto Azul, C‑186/12, EU:C:2013:412, paragraph 26 and the case-law cited, and of 1 August 2022, Vyriausioji tarnybinės etikos komisija, C‑184/20, EU:C:2022:601, paragraph 47 and the case-law cited).

32

In that regard it should be recalled that, in those proceedings, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of each case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is in principle bound to give a ruling. It follows that questions relating to EU law enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 3 June 2021, BalevBio, C‑76/20, EU:C:2021:441, paragraph 46 and the case-law cited).

33

It is also apparent from settled case-law that the need to provide an interpretation of EU law which will be of use to the referring court requires that court to define the factual and legislative context of the questions it is asking or, at the very least, to explain the factual circumstances on which those questions are based. The order for reference must also set out the precise reasons why the national court is unsure as to the interpretation of EU law and considers it necessary to refer a question to the Court for a preliminary ruling (judgment of 1 August 2022, Roma Multiservizi and Rekeep, C‑332/20, EU:C:2022:610, paragraph 43 and the case-law cited).

34

In the present case, although the order for reference presents certain deficiencies, the Court considers that the referring court has set out with sufficient clarity the reasons which prompted it to inquire about the interpretation of certain provisions and principles of EU law. Furthermore, the information contained in the order for reference enabled the governments of the Member States and other interested parties to submit observations.

35

It follows that the request for a preliminary ruling is admissible.

36

By its first question, the referring court asks, in essence, whether Article 27(1)(e) of Directive 92/83 must be interpreted as meaning that both ethyl alcohol used for the production of flavours intended, in turn, for the preparation of non-alcoholic beverages with an alcohol strength not exceeding 1.2% volume and ethyl alcohol which has already been used for the production of such flavours are covered by the exemption provided for in that provision.

37

Directive 92/83, which harmonises the structures of excise duties on alcohol and alcoholic beverages, sets out, in Article 27(1)(e) thereof, that Member States are to exempt the products covered by that directive from the harmonised excise duty under conditions which they are to lay down for the purpose of ensuring the correct and straightforward application of such exemptions and of preventing any evasion, avoidance or abuse when used for the production of flavours for the preparation of foodstuffs and non-alcoholic beverages with an alcohol strength not exceeding 1.2% volume.

38

Under the first indent of Article 20 of that directive, the term ‘ethyl alcohol’ refers, inter alia, to ‘all products with an actual alcoholic strength by volume exceeding 1.2% volume which fall within CN codes2207 and 2208, even when those products form part of a product which falls within another chapter of the CN’.

39

In addition, it must be noted that it follows from the very wording of Article 27 of Directive 92/83 that only products falling within the scope of that directive are able to benefit from the exemption provided under that Article 27. By contrast, it is irrelevant that those products comprise goods which do not, as such, fall under the scope of that directive (judgment of 7 April 2022, Y GmbH (Vanilla oleoresin), C‑668/20, EU:C:2022:270, paragraph 65 and the case-law cited).

40

It follows that every product falling within CN headings 2207 and 2208 and with an alcoholic strength by volume exceeding 1.2% is covered by the term ‘ethyl alcohol’, within the meaning of the first indent of Article 20 of Directive 92/83, even when it forms part of a flavour which falls under CN heading 3302. Accordingly, under Article 19(1) of that directive, such a product should, in principle, be subject to the harmonised excise duty provided for by that directive, subject however to the exemption contained in Article 27(1) of that directive.

41

In that regard, as the Advocate General has also observed in essence in point 30 of his Opinion, the wording of Article 27(1)(e) of Directive 92/83 is nonetheless not free from ambiguity.

42

However, according to settled case-law, when interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part (judgment of 8 September 2022, Ministerstvo životního prostředí (Hyacinth macaws), C‑659/20, EU:C:2022:642, paragraph 37 and the case-law cited).

43

In those circumstances, it is necessary to examine the context of Article 27(1)(e) of Directive 92/83 and the objectives pursued by that directive.

44

It is apparent from the case-law that the element which determines the application of the exemption provided for under that provision is the end-use to which the ethyl alcohol is put (see, by analogy, judgment of 9 December 2010, Repertoire Culinaire, C‑163/09, EU:C:2010:752, paragraph 49).

45

In the present case, that end-use consists, first, in the production of flavours themselves containing ethyl alcohol and, second, in the production of non-alcoholic beverages with an alcoholic strength not exceeding 1.2% volume.

46

In that context, it must also be recalled that the Court has already held, first, that the exemption of products covered by Article 27(1) of Directive 92/83 is the rule and refusal is the exception, and, second, that the power granted to Member States by that provision to lay down conditions for the purpose of ‘ensuring the correct and straightforward application of such exemptions and of preventing any evasion, avoidance or abuse’ cannot detract from the unconditional nature of the obligation imposed by that provision to grant exemption (judgment of 9 December 2010, Repertoire Culinaire, C‑163/09, EU:C:2010:752, paragraph 51 and the case-law cited).

47

The objective of the exemptions contained in Directive 92/83 is, in particular, to neutralise the impact of excise duties on alcohol used as an intermediate product in other commercial or industrial products (judgments of 9 December 2010, Repertoire Culinaire, C‑163/09, EU:C:2010:752, paragraph 48, and of 15 October 2015, Biovet, C‑306/14, EU:C:2015:689, paragraph 21).

48

To that effect, point 1 of the document of the Committee on Excise Duties, entitled ‘Guidelines adopted at the meeting of 12, 13 and 14 November 2003’, also states that the delegations of the Member States accept almost unanimously that the exemption provided for in Article 27(1)(e) of Directive 92/83 applies from the production stage or the importation onwards to flavourings falling, in particular, under CN heading 3302.

49

As the Advocate General observed in point 33 of his Opinion, if the competent tax authority’s interpretation, summarised in paragraph 24 of this judgment, were to prevail, it would mean that ethyl alcohol intended for the production of such flavours would be exempt from excise duties, whereas ethyl alcohol already incorporated into those flavours would not. That interpretation would give rise to the inconsistent result that, having been exempt from duty at the stage when it is intended for use in the production of flavours, once the ethyl alcohol has been used to produce those flavours, it would again become subject to excise duty. Such an outcome would not achieve the objective of neutralising the impact of excise duties on alcohol used for the production of flavours for the preparation of non-alcoholic beverages with an alcohol strength not exceeding 1.2% volume.

50

In the light of the foregoing considerations, the answer to the first question is that Article 27(1)(e) of Directive 92/83 must be interpreted as meaning that both ethyl alcohol used for the production of flavours intended, in turn, for the preparation of non-alcoholic beverages with an alcohol strength not exceeding 1.2% volume and ethyl alcohol which has already been used for the production of such flavours are covered by the exemption provided for in that provision.

51

By its second question, the referring court asks, in essence, whether Article 27(1)(e) of Directive 92/83 must be interpreted as meaning that, once ethyl alcohol released for consumption in a Member State in which it is exempt from excise duty, on the ground that it has been used for the production of flavours intended for the preparation of non-alcoholic beverages with an alcoholic strength not exceeding 1.2% volume, is subsequently marketed in another Member State, the latter is required to treat that ethyl alcohol in an identical manner.

52

The Court has already held that the uniform application of the provisions of Directive 92/83 requires that the imposition or not of excise duty on a product and the exemption from duty of a product in a Member State must, as a rule, be recognised by all the other Member States (judgment of 9 December 2010, Repertoire Culinaire, C‑163/09, EU:C:2010:752, paragraph 41).

53

Any other interpretation would compromise the attainment of the objective of Directive 92/83 and would be likely to hinder the free movement of goods (judgment of 9 December 2010, Repertoire Culinaire, C‑163/09, EU:C:2010:752, paragraph 42).

54

However, a Member State cannot be denied the possibility, recognised by the twenty-second recital and by Article 27 of that directive, of adopting measures to combat any evasion, avoidance or abuse which may arise in the field of exemptions and to ensure the correct and straightforward application of such exemptions (judgment of 9 December 2010, Repertoire Culinaire, C‑163/09, EU:C:2010:752, paragraph 43).

55

Nevertheless, the adoption of such measures must be based on concrete, objective and verifiable evidence (judgment of 9 December 2010, Repertoire Culinaire, C‑163/09, EU:C:2010:752, paragraph 44).

56

It follows from the foregoing considerations that, to the extent that, as is apparent from the file before the Court, the flavours at issue in the main proceedings have been released for consumption, within the meaning of Directive 2008/118, in the Member State of their production, namely Ireland, and that that Member State applied to those flavours the exemption provided for in section 77(a)(iii) of the Finance Act 2003, which transposes Article 27(1)(e) of Directive 92/83, the Member State of destination of those flavours was required to treat them in an identical manner upon their arrival on its territory, unless there were grounds justifying the finding of an incorrect application of that exemption or of the existence of any evasion, avoidance or abuse.

57

First, it follows from the answer to the first question that Ireland’s application of that exemption to the flavours at issue in the main proceedings was correct. Second, subject to verification by the referring court, it is not apparent from the file before the Court that the competent tax authority’s refusal to apply that exemption to those flavours was justified by evidence of evasion, avoidance or abuse.

58

In the light of the foregoing considerations, the answer to the second question is that Article 27(1)(e) of Directive 92/83 must be interpreted as meaning that, once ethyl alcohol that has been released for consumption in a Member State in which it is exempt from excise duty, on the ground that it has been used for the production of flavours intended for the preparation of non-alcoholic beverages with an alcoholic strength not exceeding 1.2% volume, is subsequently marketed in another Member State, the latter is required to treat that ethyl alcohol in an identical manner within its territory, since the first Member State applied correctly the exemption provided for in that provision and there is no evidence of evasion, avoidance or abuse.

59

As a preliminary point, it should be noted that although the referring court referred, in the third question, to Article 27(2)(d) of Directive 92/83, it made no reference, in its request for a preliminary ruling, either to any national legislation implementing that provision or to any circumstances capable of justifying the relevance of that provision for the resolution of the dispute in the main proceedings.

60

In those circumstances, it must be held that, by its third question, the referring court asks, in essence, whether Article 27(1)(e) of Directive 92/83 must be interpreted as precluding legislation of a Member State which makes the grant, to an economic operator marketing within its territory goods purchased from a seller located in the territory of another Member State in which they were manufactured, released for consumption and exempted from excise duty in accordance with that provision, of the benefit of that exemption provided for in that provision subject to the conditions that that operator has the status of registered consignee and that that seller has the status of authorised warehousekeeper.

61

In that regard, it must be recalled that Article 27(1) of Directive 92/83 provides that Member States may lay down conditions for the purpose of ensuring the correct and straightforward application of the exemptions provided for in that provision and of preventing any evasion, avoidance or abuse. As is recalled in paragraph 46 above, the Court has already held that that power granted to the Member States cannot detract from the unconditional nature of the obligation imposed by that provision to grant exemption (judgment of 9 December 2010, Repertoire Culinaire, C‑163/09, EU:C:2010:752, paragraph 51 and the case-law cited).

62

It follows that, in exercising that power, the Member State concerned must put forward concrete, objective and verifiable evidence of a serious risk of evasion, avoidance or abuse and that the conditions laid down by that Member State by virtue of the power thus conferred on it cannot go beyond what is necessary to attain that objective (judgment of 9 December 2010, Repertoire Culinaire, C‑163/09, EU:C:2010:752, paragraph 52 and the case-law cited).

63

Consequently, the Member States cannot make the application of the exemption under Article 27(1)(e) of Directive 92/83 conditional on compliance with conditions which are not proven, by concrete, objective and verifiable evidence, to be necessary to ensure the correct and straightforward application of such an exemption and to prevent any evasion, avoidance or abuse (see, by analogy, judgment of 9 December 2010, Repertoire Culinaire, C‑163/09, EU:C:2010:752, paragraph 53).

64

It appears from the evidence before the Court that the conditions laid down by the national legislation at issue in the main proceedings, that is to say, that the economic operator marketing within the territory of the Member State concerned goods purchased from a seller located in the territory of another Member State has the status of registered consignee and that that seller has the status of authorised warehousekeeper, are not necessary either to ensure the correct and straightforward application of the exemption provided for in Article 27(1)(e) of Directive 92/83 or to prevent any evasion, avoidance or abuse.

65

It is true that the Romanian Government argues, in its written observations, that, if the flavours at issue in the main proceedings were allowed to circulate outside a duty suspension arrangement, there is a risk that they would be converted into alcoholic beverages intended for consumption on which excise duty would not be paid.

66

However, it should be noted, as the Advocate General did in point 36 of his Opinion, that, as is apparent from document CED No 364 rev 1 of 22 January 2003, the Committee on Excise Duties took the view that the flavours are used predominantly as concentrates for the preparation of soft drinks, that they are relatively expensive, costing more than the cheapest alcohol marketed in the majority of Member States and, finally, that it is expensive to purify flavours in order to extract ethyl alcohol therefrom. In the light of those characteristics, the Committee on Excise Duties concluded that the grant of the exemption provided for in Article 27(1)(e) of Directive 92/83 at the time of the production of the flavours would not give rise to any risk of tax evasion.

67

Those considerations are such as to cast serious doubt on the existence of the risk that the flavours are converted into alcoholic beverages intended for consumption, alluded to by the Romanian Government, and on the need for the conditions laid down by the legislation at issue in the main proceedings in order to ensure the correct and straightforward application of that exemption and to prevent any evasion, avoidance or abuse.

68

Nevertheless, it is for the referring court, before which the dispute in the main proceedings has been brought and which must assume responsibility for the subsequent judicial decision, to ascertain, on the basis of concrete, objective and verifiable evidence in its possession, whether the conditions to which the Romanian legislation subjects the application of the exemption provided for in Article 27(1)(e) of Directive 92/83 are necessary in order to ensure the correct and straightforward application of that exemption and to prevent evasion, avoidance or abuse.

69

In the light of the foregoing considerations, the answer to the third question is that Article 27(1)(e) of Directive 92/83 must be interpreted as precluding legislation of a Member State which makes the grant, to an economic operator marketing within its territory goods purchased from a seller located in the territory of another Member State in which they were manufactured, released for consumption and exempted from excise duty in accordance with that provision, of the benefit of that exemption provided for in that provision subject to the conditions that that operator has the status of registered consignee and that that seller has the status of authorised warehousekeeper, unless it follows from concrete, objective and verifiable evidence that those conditions are necessary to ensure the correct and straightforward application of such an exemption and to prevent any evasion, avoidance or abuse.

70

The fourth question concerns the situation in which a Member State has incorrectly applied the exemption provided for in Article 27(1)(e) of Directive 92/83.

71

It is apparent from the answer given to the first question that, in the present case, Ireland has correctly applied that exemption to the flavours at issue in the main proceedings. In those circumstances, there is no need to answer the fourth question.

72

Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Tenth Chamber) hereby rules: