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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Commission v Germany (Taxation) [2004] EUECJ C-240/01 (29 April 2004) URL: https://www.bailii.org/eu/cases/EUECJ/2004/C24001.html Cite as: [2004] EUECJ C-240/01, [2004] EUECJ C-240/1 |
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JUDGMENT OF THE COURT (Sixth Chamber)
29 April 2004
(1)
(Failure of a Member State to fulfil obligations - Excise duties on mineral oils - Directive 92/81/EEC - Mineral oils used as heating fuel)
In Case C-240/01, Commission of the European Communities, represented by E. Traversa and K. Gross, acting as Agents, with an address for service in Luxembourg,applicant,
v
Federal Republic of Germany, represented by W.-D. Plessing and M. Lumma, acting as Agents,defendant,
APPLICATION for a declaration that, by applying Paragraph 4(1)(2)(b) of the Mineralölsteuergesetz (Law on the taxation of mineral oils) of 21 December 1992 (BGBl. I, p. 2185, corrigendum in 1993 I, p. 169), the Federal Republic of Germany has failed to fulfil its obligations under Article 2(2) of Council Directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils (OJ 1992 L 316, p. 12), as amended by Council Directive 94/74/EC of 22 December 1994 (OJ 1994 L 365, p. 46), in so far as that Member State has not made all mineral oils intended for use as heating fuel subject to excise duties,THE COURT (Sixth Chamber),
having regard to the Report for the Hearing,
after hearing oral argument from the parties at the hearing on 27 February 2003,after hearing the Opinion of the Advocate General at the sitting on 8 May 2003,
gives the following
'1. This Directive shall apply at Community level to the following products as defined in the relevant Directives: - mineral oils, ...'
'1. Member States shall impose a harmonised excise duty on mineral oils in accordance with this Directive. 2. Member States shall fix their rates in accordance with Directive 92/82/EEC on the approximation of the rates of excise duty on mineral oils.'
'Mineral oils other than those for which a level of duty is specified in Directive 92/82/EEC shall be subject to excise duty if intended for use, offered for sale or used as heating fuel or motor fuel. The rate of duty to be charged shall be fixed, according to use, at the rate for the equivalent heating fuel or motor fuel.'
'In addition to the general provisions set out in Directive 92/12/EEC on exempt uses of excisable products, and without prejudice to other Community provisions, Member States shall exempt the following 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: ... (d) mineral oils injected into blast furnaces for the purposes of chemical reduction as an addition to the coke used as the principal fuel.'
National legislation
'(1) Subject to the provisions of Paragraph 12, mineral oil may be used with exemption from tax ... 2. for purposes other than (a) use as motor fuel or the production of motor fuel, (b) use as heating fuel ("Verheizen"), (c) driving gas turbines; ...'
'Taxes on mineral oils and determination of use as fuel and for other purposes within the meaning of Paragraph 4(1)(2) of the MinöStG ... II. The term "use as heating fuel" From this idea, the Bundesfinanzhof has defined the term "use as heating fuel" in several judgments and gradually developed the following principles: - The use of mineral oil as heating fuel is the production of thermal energy. - Use as heating fuel is the intentional use of the calorific value of a substance, that is to say, the (total or partial) combustion of mineral oil for the production of heat which is (totally or partially) transferred to another substance; in that case, the production of heat and the transfer of that heat must not be of merely secondary importance as compared with other purposes for which the mineral oil is used. - The substance to which the heat is transferred must acquire the character of a new energy or heat source (heating medium). - The actual use of the new heat source as a heating medium justifies the conclusion that the mineral oil used to produce that heat source has been used as heating fuel. It follows that the decisive factor when determining whether use as heating fuel has taken place is the transfer of heat. The following are given as examples of heat sources (heating media): hot water and steam (as in the case of space heaters), heated ambient air, combustion gases (flue gas), boilers, jackets, etc. III. The term "other purposes" With regard to the use of mineral oil for energy, it appears from the case-law of the Bundesfinanzhof that there is no use as heating fuel only in the following cases: - The flame comes into direct contact with the substance to be treated, worked or destroyed (contrary to the analysis provided above). The examples mentioned are singeing off textile fibres, flame cultivation, use of oxy-hydrogen torches, heating metals to make them workable, warming roofing felt to make it easier to handle etc. - The substance absorbing the combustion energy is itself subjected to heat in order to serve in the manufacture of a product of a different structure and thereby loses its material structure. 'Material alteration' means that constituents of the mineral oil are at least partly incorporated in the product, as in the production of soot by thermal cracking or in the hardening of steel by cementation. Here too, mineral oil is used at least partly as a raw material, and a chemical alteration of the molecular structure takes place. A decisive indication of the presence of such a process may, for example, be the fact that the use of other energy sources, such as coal or electricity, cannot fulfil the production objective. - There is no utilisation of the calorific value of mineral oils used to produce heat where the principal objective is the elimination of harmful gas emissions by means of their total combustion, and for that purpose a pilot light is fuelled by mineral oil or mineral oil is mixed together in a combustion chamber with the gases to be eliminated and is completely burnt up. These cases have in common the fact that the combustion of the mineral oil coincides, in a homogeneous process, with the transformation or destruction of the substance absorbing the thermal energy. Transmission of the absorbed energy or its transfer to another substance is impossible. ...'
Findings of the Court
On those grounds,
THE COURT (Sixth Chamber)
hereby: 1) Declares that, by applying Article 4(1)(2)(b) of the Mineralölsteuergesetz (Law on the taxation of mineral oils), the Federal Republic of Germany has failed to fulfil its obligations under the first sentence of Article 2(2) of Council Directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils, as amended by Council Directive 94/74/EC of 22 December 1994, inasmuch as it has not made all mineral oils intended for use as heating fuel subject to excise duties. Orders the Federal Republic of Germany to pay the costs.
Skouris |
Cunha Rodrigues |
Puissochet |
Schintgen |
Macken |
|
R. Grass |
V. Skouris |
Registrar |
President |
1 - Language of the case: German.