Court of Justice of the European Communities (including Court of First Instance Decisions)

to manufactured tobaccos on a particular tobacco product manufactured by Brinkmann and sold under the designation 'Westpoint' and, more particularly, in relation to the question whether Westpoint should be taxed as a cigarette or as smoking tobacco, which would result in a lower rate.

Community legislation

'1. Rolls of tobacco capable of being smoked as they are and which are not cigars or cigarillos as defined in Article 2 shall be deemed to be cigarettes.'

Article 4(1) of the Second Directive provided:

'The following shall be deemed to be smoking tobacco:

1. tobacco which has been cut or otherwise split, twisted or pressed into blocks and is capable of being smoked without further industrial processing.'

Danish law

Facts in the main proceedings

'- the tobacco is measured out precisely beforehand during the industrial manufacturing process;

- the taste never alters;

- there is always a uniform smoking ratio (smoking time and draw);

- there is always a uniform, previously-determined content of harmful substances in relation to a particular cigarette-paper tube;

- it is extremely simple to make up a cigarette directly comparable to a factory-produced cigarette;

- there is no tobacco cylinder wrapping which has to be thrown away;

- it is subject to more favourable tax treatment as compared with industrially-prepared cigarettes.'

The questions referred for a preliminary ruling

'1. Should the definitions in the Council's Second Directive (79/32/EEC) of 18 December 1978 on taxes other than turnover taxes which affect the consumption of manufactured tobacco, in the version in force on 14 May 1990, be interpreted to the effect that a product with the following characteristics should be classified as cigarettes or as smoking tobacco:

- there is a packet containing 25 g of fine-cut smoking tobacco divided up into 30 rolls of tobacco, industrially manufactured, each roll being of the same size, consistency and uniformity;

- each roll of tobacco is 68.6 mm long and consists of approximately 833 mg of fine-cut smoking tobacco wrapped in cellulose, and pressed out into a thin block;

- the wrapping is porous, and the roll of tobacco cannot be smoked as it is but must be inserted into a cigarette-paper tube or wrapped in ordinary cigarette paper, which in both cases can be done without the use of implements?

If the answer to Question 1 is that the product should be classified as smoking tobacco, the Court is asked to reply to the following questions:

2. Under Community law is an undertaking entitled to compensation for every loss suffered by it as a consequence of a Member State's infringement of

Community law, consisting in the fact that an authority responsible for the final administrative decision as to which tax group a tobacco product should fall under has reached a decision which conflicts with Article 3(1) of Directive 79/32/EEC and, if so, what are the conditions governing such liability?

3(a). Are the definitions of manufactured tobacco products in Directive 79/32/EEC properly implemented in a Member State if the Minister for Fiscal Affairs is, by law, empowered to lay down provisions concerning the definitions of tobacco products in compliance with the provisions laid down by the European Communities, where no legal provisions have been adopted pursuant to the law.

If Question 3(a) is answered in the negative, the Court of Justice is asked to reply to the following question:

3(b). Does it matter, as regards the answer to Question 2, that the definitions in the Tobacco Directive were not implemented in the Member State if the national authority, in its decision, referred to the definitions, and the parties to the case before the national court are in agreement that the definitions in the Directive are directly applicable?

4. Does it matter, as regards the answer to Question 2, that the authorities refused to suspend the operation of the authority's decision as requested by the plaintiff with a view to limiting its losses?'

The first question

cigars in Article 2 of the Second Directive, which provides that they must also be rolls of tobacco which can be smoked as they are. Some cigars have to be cut by the consumer before they can be smoked. None the less, it is unarguable that such cigars are still cigars within the meaning of Article 2 of the Second Directive. It follows that the expression 'as they are' in the Second Directive cannot be construed literally.

The second, third and fourth questions

consumers the advantages of a cigarette while benefiting from the lower tax applicable to smoking tobacco. In those circumstances, the interpretation given by the Danish authorities to the relevant definitions was not manifestly contrary to the wording of the Second Directive or in particular to the aim pursued by it, all the more so as both the Finnish Government and the Commission have argued in favour of that interpretation.

Costs