61964J0021

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1 . FINANCIAL PROVISIONS - LEVIES - SURCHARGES FOR DELAY - NATURE - PECUNIARY SANCTION OR PERIODIC PENALTY PAYMENT

( ECSC TREATY, ARTICLES 36, 50(3 ))

2 . FINANCIAL PROVISIONS - LEVIES - RULES GOVERNING MODE OF ASSESSMENT AND COLLECTION - STRICT INTERPRETATION

( ECSC TREATY, ARTICLE 50(2 ))

3 . OBJECTION OF ILLEGALITY WITHIN THE MEANING OF PARAGRAPH THREE OF ARTICLE 36 OF THE ECSC TREATY - RESTRICTION OF ITS APPLICATION TO GENERAL DECISIONS AND RECOMMENDATIONS - INDIVIDUAL DECISION - EXPIRATION OF THE TIME-LIMIT FOR APPEALS

4 . OBJECTION OF ILLEGALITY WITHIN THE MEANING OF THE THIRD PARAGRAPH OF ARTICLE 36 OF THE ECSC TREATY - DIRECT LEGAL CONNEXION BETWEEN THE CONTESTED MEASURE AND THE GENERAL MEASURE IMPUGNED

1 . SURCHARGES FOR DELAY IN PAYING LEVIES PROVIDED FOR BY ARTICLE 50(3 ) OF THE ECSC TREATY REPRESENTS PECUNIARY SANCTIONS OR PERIODIC PENALTY PAYMENTS WITHIN THE MEANING OF ARTICLE 36 OF THE TREATY .

2 . THE PROVISIONS OF ARTICLE 50(2 ) OF THE ECSC TREATY RELATE ONLY TO THE MODE OF ASSESSMENT AND COLLECTION OF LEVIES AND NOT TO THE SURCHARGES FOR DELAY FOR WHICH PARAGRAPH ( 3 ) OF THIS ARTICLE PROVIDES . AS THIS ARTICLE LAYS DOWN THE ESSENTIAL PROCEDURAL REQUIREMENTS FOR THE VALIDITY OF DECISIONS OF THE HIGH AUTHORITY IN THE MATTER OF LEVIES ITS APPLICATION AND SCOPE CANNOT BE EXTENDED BY WAY OF INTERPRETATION TO CASES NOT PROVIDED FOR BY THE TREATY .

3 . CF . PARA . 4 OF SUMMARY IN CASE 3/59, ( 1960 ) ECR 53 .

THE JUDGMENT OF THE COURT IN CASE 9/56 DID NOT INTERPRET THE THIRD PARAGRAPH OF ARTICLE 36 AS MEANING THAT APPLICANTS MAY CONTEST NOT ONLY THE LEGALITY OF GENERAL DECISIONS AND RECOMMENDATIONS, BUT ALSO THE LEGALITY OF DECISIONS AND RECOMMENDATIONS ADDRESSED TO THEM AND WHICH THEY ARE ALLEGED NOT TO HAVE OBSERVED . IT IS A FUNDAMENTAL PRINCIPLE OF LAW, CONFIRMED BY THE LAST PARAGRAPH OF ARTICLE 33, THAT THE LEGALITY OF INDIVIDUAL DECISIONS CAN NO LONGER BE CALLED IN QUESTION AFTER THE EXPIRY OF THE LIMITATION PERIOD .

*/ 659J0003 /*.

4 . A PLEA THAT GENERAL DECISIONS ARE ILLEGAL CAN ONLY BE SUBMITTED IN SO FAR AS THERE IS A DIRECT LEGAL CONNEXION BETWEEN THEM AND THE CONTESTED INDIVIDUAL MEASURE .

IN CASE 21/64

MACCHIORLATI DALMAS E FIGLI, A LIMITED PARTNERSHIP, HAVING ITS REGISTERED OFFICE IN TURIN, REPRESENTED BY GIUSEPPE MACCHIORLATI DALMAS, ASSISTED BY ANTONIO ASTOLFI, ADVOCATE AT THE CORTE DI CASSAZIONE, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE CHAMBERS OF ERNEST ARENDT, 6 RUE WILLY-GOERGEN,

APPLICANT,

V

HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY, REPRESENTED BY ITS LEGAL ADVISER, ITALO TELCHINI, ACTING AS AGENT, ASSISTED BY PIERO ZICCARDI, PROFESSOR AT THE UNIVERSITY OF MILAN, ADVOCATE AT THE CORTE DI CASSAZIONE, WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT ITS OFFICES, 2 PLACE DE METZ,

DEFENDANT,

APPLICATION FOR THE ANNULMENT, REVOCATION OR AT LEAST THE VARIATION OF THE DECISION OF THE HIGH AUTHORITY MADE ON 8 APRIL 1964 AND NOTIFIED TO THE APPLICANT ON 14 APRIL 1964, DEMANDING PAYMENT BY IT OF THE SUM OF 7 000 000 LIRE ' BY WAY OF SURCHARGES FOR DELAY IN PAYMENT OF LEVIES ';

P.187

ADMISSIBILITY

THE APPLICATION IS DIRECTED AGAINST THE DECISION OF 8 APRIL 1964 WHICH REQUIRES THE APPLICANT TO PAY SURCHARGES FOR DELAY ON THE LEVIES IN ACCORDANCE WITH ARTICLE 6 OF DECISION NO 3/52 .

DECISION NO 3/52 IS BASED ON ARTICLE 50(3 ) OF THE TREATY UNDER WHICH THE HIGH AUTHORITY MAY IMPOSE SURCHARGES FOR DELAY UPON UNDERTAKINGS WHICH DO NOT COMPLY WITH DECISIONS TAKEN BY IT CONCERNING THE LEVY . THESE SURCHARGES THEREFORE REPRESENT PECUNIARY SANCTIONS OR PERIODIC PENALTY PAYMENTS WITHIN THE MEANING OF ARTICLE 36 OF THE TREATY . THE RIGHT ACCORDED TO THE HIGH AUTHORITY BY THE THIRD PARAGRAPH OF ARTICLE 6 OF DECISION NO 3/52 TO REMIT SURCHARGES FOR DELAY IN WHOLE OR IN PART IN THOSE CASES WHERE IT CONSIDERS SUCH A REMISSION TO BE JUSTIFIED SHOWS THAT THEY ARE NOT JUST INTEREST ON OVERDUE PAYMENTS . IN ACCORDANCE WITH THE PROVISIONS OF THE SECOND PARAGRAPH OF ARTICLE 36 OF THE TREATY THE COURT SHALL HAVE UNLIMITED JURISDICTION IN APPEALS AGAINST PECUNIARY SANCTIONS .

THE APPLICANT SUPPORTS ITS APPLICATIONS BY RELYING IN PARTICULAR ON THE ILLEGALITY OF THE DECISION OF 13 FEBRUARY 1959 AND OF CERTAIN GENERAL DECISIONS RELATING TO LEVIES ON THE GROUND THAT, AS THE SAID DECISIONS FORM THE LEGAL AND LOGICAL BASIS OF THE DISPUTED DECISION, THEIR ILLEGALITY MUST LEAD TO THE ANNULMENT OF THE LATTER . THE DEFENDANT SUBMITS THAT THESE SUBMISSIONS ARE INADMISSIBLE .

THE THIRD PARAGRAPH OF ARTICLE 36 OF THE TREATY CANNOT ENABLE AN APPLICANT TO PLEAD THE ILLEGALITY NOT ONLY OF GENERAL DECISIONS AND RECOMMENDATIONS BUT ALSO OF DECISIONS AND RECOMMENDATIONS ADDRESSED TO HIM . SUCH AN INTERPRETATION WOULD CONFLICT WITH THE FUNDAMENTAL PRINCIPLE ESTABLISHED BY ARTICLE 33 . IN FACT THE STRICT TIME-LIMIT FOR INSTITUTING PROCEEDINGS LAID DOWN BY THIS PROVISION IS IN KEEPING WITH THE NECESSITY TO PREVENT THE LEGALITY OF ADMINISTRATIVE DECISIONS BEING CALLED IN QUESTION INDEFINITELY .

THE DECISION OF 13 FEBRUARY 1959 IS AN INDIVIDUAL DECISION ADDRESSED TO THE APPLICANT . AS THE TIME-LIMIT OF ONE MONTH FOR THE INSTITUTION OF PROCEEDINGS HAS EXPIRED THE APPLICANT CANNOT PLEAD THE ILLEGALITY OF THIS DECISION UNDER THE THIRD PARAGRAPH OF ARTICLE 36 OF THE TREATY . THEREFORE THE SUBMISSIONS PUT FORWARD BY THE APPLICANT AGAINST THIS DECISION ARE INADMISSIBLE .

A PLEA THAT GENERAL DECISIONS ARE ILLEGAL CAN ONLY BE SUBMITTED IN SO FAR AS THERE IS DIRECT LEGAL CONNEXION BETWEEN THE CONTESTED MEASURE AND THE SAID GENERAL DECISIONS . IN THIS CASE THE CONTESTED MEASURE IS CONFINED TO THE DETERMINATION OF THE AMOUNT OF THE SUMS DUE FROM THE APPLICANT BY WAY OF SURCHARGES FOR DELAY, AS THE ARREARS OF THE PRINCIPAL DEBT WERE FIXED IN THE DECISION OF 13 FEBRUARY 1959 .

P.188

THEREFORE THERE IS NO DIRECT LEGAL CONNEXION BETWEEN THE CONTESTED DECISION AND THE GENERAL DECISIONS TO WHICH EXCEPTION IS TAKEN, TO THE EXTENT TO WHICH THE LATTER REFER TO THE RATE OF THE LEVY AND TO THE FACTORS USED IN ITS CALCULATION . THEREFORE THE SUBMISSIONS PUT FORWARD BY THE APPLICANT AGAINST THE GENERAL DECISIONS CONCERNING THE LEVIES ARE ONLY ADMISSIBLE TO THE EXTENT TO WHICH THEY REFER TO THOSE PROVISIONS OF THE SAID DECISIONS WHICH FORM THE BASIS OF THE CONTESTED DECISION OF 8 APRIL 1964 .

THE SUBSTANCE

THE PRINCIPAL CONCLUSIONS

THE DECISION OF 8 APRIL 1964

1 . THE APPLICANT SUBMITS THAT THIS DECISION IS ILLEGAL BECAUSE THE STATEMENT OF THE REASONS UPON WHICH IT IS BASED IS IN LAW INADEQUATE . IT ARGUES TO BEGIN WITH THAT ITS REASONS ARE AMBIGUOUS AND QUOTES CERTAIN PASSAGES OF THE STATEMENT OF REASONS IN ORDER TO SHOW THAT IT IS FACTUALLY INACCURATE AND CONTRADICTORY .

IF HOWEVER THESE PASSAGES ARE READ IN THEIR CONTEXT THE STATEMENT OF THE REASONS UPON WHICH THE DISPUTED DECISION IS BASED APPEARS TO BE ADEQUATE . IT CLEARLY DISCLOSES THE FACTUAL AND LEGAL REASONS UPON WHICH IT IS BASED .

THE APPLICANT THEN ARGUES THAT THE SAID DECISION DOES NOT STATE THE REASONS WHY THE HIGH AUTHORITY CONSIDERED THAT IT HAD TO REJECT ITS REQUEST MADE ON 18 FEBRUARY 1964 TO THE EFFECT THAT THE SURCHARGES FOR DELAY BE REMITTED .

HOWEVER UNDER THE PROVISIONS OF THE FIRST PARAGRAPH OF ARTICLE 36 OF THE TREATY THE HIGH AUTHORITY IS UNDER A DUTY TO CONSIDER THE COMMENTS SUBMITTED BY THE PARTIES CONCERNED BEFORE IMPOSING A PECUNIARY SANCTION UPON THEM BUT DOES NOT HAVE TO EXPLAIN THE REASONS WHY IT HAS NOT ACTED ON THEM . IN THE PRESENT CASE THE APPLICANT WAS DULY GIVEN THE OPPORTUNITY OF SUBMITTING ITS COMMENTS BEFORE THE ISSUE OF THE CONTESTED DECISION . MOREOVER THE REASONS WHY THESE COMMENTS WERE NOT TAKEN INTO CONSIDERATION BY THE HIGH AUTHORITY ARE STATED BY IMPLICATION IN THAT PART OF THE STATEMENT OF REASONS IN WHICH IT GIVES ITS VIEWS ON THE SIMILAR COMMENTS SUBMITTED PREVIOUSLY BY THE APPLICANT ON 20 FEBRUARY 1962 .

P.189

FOR ALL THESE REASONS THIS SUBMISSION IS UNFOUNDED .

2 . THE APPLICANT FURTHER STATES THAT THE HIGH AUTHORITY HAS MISUSED ITS POWERS BY CONTINUING TO DEMAND PAYMENT OF THE SURCHARGES FOR DELAY, ALTHOUGH AT THE MEETING OF 21 APRIL 1960 IT GAVE IT AN ASSURANCE THAT THE SURCHARGES FOR DELAY WOULD BE REMITTED IF THE ARREARS OF THE LEVIES WERE DULY PAID . IT GOES ON TO SAY THAT IT WAS ON THE STRENGTH OF THIS ASSURANCE THAT IT DISCONTINUED ITS APPLICATION IN CASE 22/59 . IN SUPPORT OF THIS SUBMISSION IT REFERS TO PART OF THE CORRESPONDENCE BETWEEN THE PARTIES AFTER 21 APRIL 1960 AND TENDERS EVIDENCE OF THE VERBAL ASSURANCES TO THIS EFFECT WHICH CERTAIN OFFICIALS OF THE HIGH AUTHORITY ARE SAID TO HAVE GIVEN IT .

THERE IS NOTHING IN THE LETTER OF THE HIGH AUTHORITY OF 6 MAY 1960 TO INDICATE THAT IT GAVE AN ASSURANCE THAT THE CONTESTED SURCHARGES WOULD BE REMITTED . THE GENERAL RULES OF LAW GOVERNING THE EXERCISE OF ADMINISTRATIVE AUTHORITY AND THE VALIDITY OR EFFICACY OF COMPROMISES WOULD HAVE REQUIRED THAT THIS ASSURANCE BE EXPRESSLY APPROVED BY THE RESPONSIBLE OFFICERS OF THE HIGH AUTHORITY . THE APPLICATION OF THIS PRINCIPLE IS ALL THE MORE IMPORTANT IN THIS CASE BECAUSE THE SAID ASSURANCE WOULD HAVE ENTAILED THE ABANDONMENT BY THE HIGH AUTHORITY OF ITS RIGHT TO ARGUE CLAIMS ARISING OUT OF A DECISION DULY ADOPTED BY THE RESPONSIBLE OFFICERS . BY LETTERS OF 11 MAY 1960 AND 20 FEBRUARY 1962 THE APPLICANT AGAIN REQUESTED THAT THE SURCHARGES FOR DELAY BE REMITTED WITHOUT MENTIONING THE ALLEGED COMPROMISES WHICH WOULD HAVE RELEASED IT FROM PAYING THEM . IN THESE CIRCUMSTANCES THE OFFER BY THE APPLICANT TO TENDER EVIDENCE IS POINTLESS HAVING REGARD TO THE FOREGOING CONSIDERATIONS . IT MUST THEREFORE BE REJECTED . FOR ALL THESE REASONS THIS SUBMISSION MUST BE DISMISSED .

3 . THE APPLICANT FURTHER ARGUES THAT THE DECISION OF 8 APRIL 1964 INFRINGES ARTICLE 6 OF GENERAL DECISION NO 3/52, SINCE IN CALCULATING THE SURCHARGES FOR DELAY IT ROUNDED UP THE AMOUNTS, THEREBY EXCEEDING THE FLAT RATE OF 1 PER CENT LAID DOWN BY THIS ARTICLE . THE AMOUNT OF EACH SURCHARGE FOR DELAY IS SAID IN FACT TO HAVE BEEN ROUNDED EITHER UP OR DOWN AND ONLY BY FRACTIONS OF A LIRA, SO THAT THE ENTIRE DEBT OF THE APPLICANT WAS INCREASED BY 0.83 LIRE . THIS STATEMENT HAS NOT BEEN CHALLENGED .

THIS TINY INCREASE HAS BEEN AMPLY OFF-SET BY THE REDUCTION OF THE SURCHARGES FOR DELAY WHICH THE HIGH AUTHORITY DECIDED TO GRANT . THE AMOUNT OF THE SURCHARGES FOR DELAY DOES NOT THEREFORE EXCEED THE RATE OF 1 PER CENT FIXED BY ARTICLE 6 OF DECISION NO 3/52 .

P.190

THIS SUBMISSION IS THEREFORE UNFOUNDED .

GENERAL DECISIONS NOS 3/52 AND 29/55

1 . THE APPLICANT ARGUES THAT ARTICLE 6 OF DECISION NO 3/52 AND DECISION NO 29/55 DO NOT COMPLY WITH ARTICLE 50(3 ) OF THE TREATY, WHICH FIXES THE MAXIMUM RATE OF SURCHARGES FOR DELAY . THESE PROVISIONS ARE SAID TO BE CONTRARY TO THE GENERAL PRINCIPLE OF ARTICLE 36 OF THE TREATY TO THE EFFECT THAT THE PARTIES CONCERNED MUST BE GIVEN THE OPPORTUNITY TO SUBMIT THEIR COMMENTS BEFORE PECUNIARY SANCTIONS ARE IMPOSED UPON THEM . ARTICLE 6 OF DECISION NO 3/52, ACCORDING TO THE APPLICANT, LAYS DOWN A FIXED RATE FOR SURCHARGES FOR DELAY, INDEPENDENTLY OF THE NATURE, SERIOUSNESS AND FREQUENCY OF THE FAILURE TO PAY WHICH THEY PENALIZE .

AS FAR AS THE FIRST SUBMISSION IS CONCERNED ARTICLE 6 OF DECISION NO 3/52 FIXES THE ANNUAL RATE OF THE SURCHARGES FOR DELAY AT 12 PER CENT, WHEREAS ARTICLE 50(3 ) OF THE TREATY LAYS DOWN A MAXIMUM ANNUAL RATE OF 20 PER CENT . THEREFORE, AS THE ABOVE-MENTIONED ARTICLE 6 HAS NOT EXCEEDED THE LIMIT LAID DOWN IN THE TREATY FOR THE DETERMINATION OF SURCHARGES FOR DELAY, IT CANNOT BE REGARDED AS AN INFRINGEMENT OF THE TREATY .

AS FAR AS THE SECOND SUBMISSION IS CONCERNED THE SURCHARGES FOR DELAY HAVE NOT IN THIS CASE BEEN APPLIED IN BREACH OF THE FIRST PARAGRAPH OF ARTICLE 36 OF THE TREATY, SINCE THE APPLICANT WAS GIVEN THE OPPORTUNITY TO SUBMIT ITS COMMENTS BEFORE THE ISSUE OF THE INDIVIDUAL DECISION OF 8 APRIL 1964, WHICH IMPOSED UPON IT THE DISPUTED SURCHARGES FOR DELAY .

FINALLY, WITH REGARD TO THE THIRD SUBMISSION, THE DECISION OF 14 NOVEMBER 1962, MOST OF WHICH IS REPEATED IN THE CONTESTED DECISION, DISCLOSES THAT THE SURCHARGES FOR DELAY HAVE ALREADY BEEN REDUCED BY 2 000 000 LIRE . THE HIGH AUTHORITY THEREFORE TOOK ACCOUNT OF THE INDIVIDUAL SITUATION OF THE APPLICANT AND OF THE FACTORS CAPABLE OF JUSTIFYING AN ADJUSTMENT OF THE DISPUTED FIGURE . THEREFORE THESE SUBMISSIONS MUST BE DISMISSED AS UNFOUNDED .

2 . THE APPLICANT ALSO SUBMITS THAT DECISION NO 3/52 IS ILLEGAL IN THAT IT WAS ADOPTED WITHOUT PRIOR CONSULTATION WITH THE SPECIAL COUNCIL OF MINISTERS, AS PROVIDED BY ARTICLE 50(2 ) OF THE TREATY, WHICH ALSO APPLIES TO SURCHARGES FOR DELAY . THE PROVISIONS OF ARTICLE 50(2 ) OF THE TREATY RELATE ONLY TO THE MODE OF ASSESSMENT AND COLLECTION OF LEVIES . IF THE DRAFTSMAN HAD INTENDED TO ENLARGE THE SCOPE OF THESE PROVISIONS SO AS TO INCLUDE SURCHARGES FOR DELAY, WHICH HE DEALS WITH IN THE NEXT PARAGRAPH, HE WOULD HAVE MENTIONED THEM EXPRESSLY . AS THIS ARTICLE LAYS DOWN THE ESSENTIAL PROCEDURAL REQUIREMENTS FOR THE VALIDITY OF DECISIONS OF THE HIGH AUTHORITY IN THE MATTER OF LEVIES, ITS APPLICATION CANNOT BE EXTENDED BY WAY OF INTERPRETATION TO CASES NOT PROVIDED FOR BY THE TREATY . THEREFORE THE SUBMISSION IS UNFOUNDED .

ALTERNATIVE CONCLUSIONS

IN ADDITION THE APPLICANT CLAIMS ALTERNATIVELY A REASONABLE REDUCTION OF THE SURCHARGES FOR DELAY . IN SUPPORT OF THESE CONCLUSIONS IT RELIES ON A SEQUENCE OF FACTS, SUCH AS THE EXCESSIVELY HIGH LEVEL OF THE CONTESTED SURCHARGES, THE SMALL SIZE OF THE UNDERTAKING, THE PUNCTUAL PERFORMANCE OF ITS OBLIGATION TO PAY THAT PART OF THE DEBT CONSISTING OF PRINCIPAL .

THE LEVEL OF THE CONTESTED SURCHARGES DOES NOT EXCEED THE MAXIMUM RATE LAID DOWN BY ARTICLE 50(3 ) OF THE TREATY . THE AGGREGATE AMOUNT OF THE SAID SURCHARGES, AS REDUCED BY THE DECISION OF 14 NOVEMBER 1962, IS NOT EXCESSIVE COMPARED WITH THE SIZE OF THE DEBT IN RESPECT OF PRINCIPAL OR DISPROPORTIONATE TO THE ECONOMIC CAPACITY OF A MEDIUM-SIZED UNDERTAKING . THE APPLICANT HAS NOT PRODUCED ANY EVIDENCE OF THE EXISTENCE OF ANY SPECIAL ECONOMIC DIFFICULTIES AFFECTING IT WHICH WOULD JUSTIFY A REDUCTION OF THE DISPUTED SURCHARGES . THERE IS THEREFORE NO REASON TO VARY THE DETERMINATION MADE BY THE DEFENDANT AS REGARDS THE AMOUNT OF THESE SURCHARGES . THE CONCLUSIONS OF THE APPLICANT MUST THEREFORE BE DISMISSED .

UNDER ARTICLE 69(2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY SHALL BE ORDERED TO PAY THE COSTS . THE APPLICANT HAS FAILED IN ITS SUBMISSIONS AND MUST BE ORDERED TO BEAR THE COSTS .

THE COURT

HEREBY :

1 . DISMISSES THE APPLICATION;

2 . ORDERS THE APPLICANT TO BEAR THE COSTS .