Recalling and criticizing the arguments which had been submitted in Case 33/76, the Italian Government emphasizes in particular that the solution which it put forward arose from the judgment delivered on 8 April 1976 in Case 43/75 (Gabrielle Defrenne v Société Anonyme Belge de Navigation Aérienne Sabena [1976] ECR 455). In that judgment the Court acknowledged the direct effect of Article 119 of the EEC Treaty but limited its temporal application to the period after the date of its judgment, except as regards those workers who had already brought legal proceedings or made an equivalent claim.

According to the Italian Government, the criteria laid down in the Defrenne case are also decisive in cases such as this one. Although the limitation of the direct effect of Article 119 was decided only for reasons of expediency, the acknowledgement of a right to the repayment of sums paid at a time when it was not established that they were charges having an effect equivalent to customs duties but when, on the contrary, it was generally accepted that they were not of that nature, would be incompatible not only with the objectives of Article 13 (2) of the EEC Treaty but also with those of secondary Community law by reason of the additional adverse effect on intra-Community trade which would result from this.

Examining the opinion expressed in particular by the Advocate General in Case 33/76 (REWE), according to which the situation in that case was not comparable to that in the Defrenne case, the Italian Government considers that it remains to be considered whether, in view of the discrimination resulting from the various national limitation periods, the same importance should not be attached to the financial burden resulting from the duty of repayment as that attached to the harmful consequences of complete retroactivity in the Defrenne case, having regard in particular to the provisions of Article 6 (2) of the Treaty.

Thus it is necessary to examine whether, as a result of a judgment of the Court setting aside an interpretation until then generally accepted, traders are given the right which they had not previously exercised not to pay certain duties and charges. Along the same lines, it is necessary to examine whether in similar circumstances the Member States are given the right to claim sums to which they previously considered they were not entitled when a judgment of the Court shows that in fact those sums were legally payable.

As regards the first case, it might be considered that a solution could easily be found if reference were made to the provisions in each national legal order governing the condictio indebiti. This reference to national law would however result in different solutions since the possibility of repayment might even be totally excluded by national legislation, as shown by the judgment of 26 June 1979 (Case 177/78, Pigs and Bacon Commission v McCarren and Company Limited).

The solution should therefore be sought within the context of the Community legal order. The repayment of sums levied by way of duties acknowledged to have an effect equivalent to that of customs duties can only be permitted as from the judgment of the Court of Justice in which it was held that the duty levied had an effect equivalent to that of customs duties or, possibly, as from the date of the Commission directive within the meaning of Article 12 (2) of the EEC Treaty.

In support of this argument, the Italian Government claims that the scope of the concept of a charge having an equivalent effect has not been defined by the Treaty. Pursuant to Article 13 (2) of the Treaty, the Member States should have progressively abolished charges having en effect equivalent to customs duties during the transitional period and according to a timetable determined by the Commission by means of directives based on the rules laid down in Article 14 (2) and (3) and directives issued by the Council pursuant to Artide 14 (2). However, it is common knowledge that the Commission specifically determined charges having an equivalent effect initially on the basis of an analytical examination of information supplied by the various Member States in reply to a questionnaire and afterwards on the basis of an independent examination; this work has not yet been completed as regards the six old Member States although the transitional period expired several years ago and it has only just been started as regards the taxation of the new Member States.

With regard to the common agricultural policy, the regulations provided directly that the levying of charges having an equivalent effect was incompatible with the application of the system of levies even before the Commission adopted the first directive on charges having an equivalent effect, dating from 15 October 1963, without supplying accordingly any information or details enabling those charges to be determined.

The Italian Government emphasizes the irresolution of the services of the Commission and the fact that it was necessary for the Court of Justice to specify through a uniform development of its case-law the conditions which had to be satisfied in order for a charge or a duty levied on imports to be acknowledged as having an effect equivalent to customs duties. In these circumstances it is impossible to lay the blame on the Member States for maintaining, until the interpretative judgment, charges having an equivalent effect, otherwise it would be nessessary to consider that every customs official should have independen tly taken responsibility for deducing the consequences of the direct effect of the prohibition on charges having an equivalent effect before the Commission had even issued the appropriate directives and before the interpretative judgment of the Court.

The Italian Government also maintains that there is a difference between the right of an individual not to pay a charge having an equivalent effect which arises from a directly applicable Community provision and the duty of repayment of the State resulting not from the directly applicable provision but rather from the situation in which it has been found that a State has failed to fulfil its obligations under the Treaty. It claims that the scope of the concept of a failure to fulfil an obligation in the Community legal order is, by reason of the institutional objectives of the Communities, different from that of the same concept in national law. A State which has failed to fulfil its obligations has not been compelled by the Community institutions to recover the aid or the export refunds granted in breach of Community law. It also argues from Memoradum No 75425312 of the Commission of 30 May 1975 issued as a result of the judgment delivered on 12 November 1974 in Case 34/74 (Société Roquette Frères v French State [1974] ECR 1217) on the interpretation of Article 4 a (2) of Regulation No 974/71 of the Council. In that memorandum, the Commission took the view that, by reason of the special circumstances of the case, Member States were not under a duty to recover the sums which should not have been paid if the article in question had been interpreted to the effect indicated by the Court. It follows logically that a different criterion cannot be used within the context of the same legal relationship and by reference to the same provision according to whether certain sums must be recovered or repaid by the national authorities. Thus the duty of repayment should not necessarily be considered as the consequence of the levying of sums not owed.

The Italian Government emphasizes that the solution which it proposes is based on the judgment delivered in Case 43/75 (the Defienne case, quoted above) in which the Court expressly, although by way of exception, makes a distinction between the finding that there has been a failure by a Member State to fulfil its obligations under the Treaty and the duty retroactively to eliminate the harmful effects produced by that failure to fulfil its obligations. The reasons which led the Court to depart from the purely declaratory effect of its judgments, in other words the economic consequences, the conducts of the Member States, the absence of action by the Commission and the incorrect impression of the effect of the applicable Community rules, are also valid as regard charges having an effect equivalent to customs duties and, in general, in the case of sums levied in the basis of a misinterpretation of the Community rules.

The economic consequences result from the simultaneous repayment of sums levied for years without any dispute and in the belief that they had to be paid; that damage is variable and discriminatory according- to the limitation periods laid down by each national legal system. The conduct of the Member States and the Commission's lack of action were also decisive, since the sums in question were paid and levied in the general and obvious belief that there was no breach of the Community rules. These arguments are particularly relevant -as regards the system of public health inspection dues because of the complexity of the latter. It was not until 1970 when the Community rules on the common organization of the markets in the sector of the various products subject to public health inspections had already been in force several years that the Commission took action against two Member States only; that action had no concrete results for approximately seven years and was only resumed after the various judgments delivered by the Court of Justice.

The Italian Government then emphasizes that the repayment of the sums paid to the European Communities or to the Member States as a result of a misinterpretation of the Community rules results in an actual enrichment of the traders concerned or more exactly in a higher and unforeseen profit margin because those traders have obviously passed on the corresponding amounts in the calculation of their production costs.

A restitutio in integrum which proves more harmful than the damage for which it is to compensate is also impossible in the light of the Community rules on competition. Repayment would result in substance in an aid to national traders who have passed on to their customers the burden improperly levied upon them and would cause additional damage to exporters of the other Member States who have already suffered the actual damage of a reduction in their export transactions. According to the Italian government, the retroactive elimination of a difference in treatment which in fact has already irreversibly affected business relationships by making them subject to a system different from that intended by the Community legislature produces an effect contrary to the objectives of the Community provisions, in other words free movement of goods on the Community territory and a system of free competition between the traders concerned. It is therefore necessary to acknowledge the relevance of the principle cessante ratione legis, cessat et ipsa lex and not to apply Community provisions which are incompatible with the objectives pursued.

As regards the analogous but converse case in which the misinterpretation of the Community rules has not given rise to the levying of duties which were, on the contrary, payable, it is, according to the Italian Government, certainly more difficult to consider the arguments which it put forward in relation to the first case to be relevant. There is a fundamental difference in that the levying of sums payable which have not however been paid and levied by mistake is in accordance with the function and objectives of the rules interpreted incorrectly and because the administration's mistake constitutes precisely the normal and necessary condition for the claim for additional payment. However, it cannot be excluded a priori that the principle of cessante ratione legis, cessat et ipsa lex may also be relevant where it is necessary to recover years afterwards and possibly with irreversible damage to those concerned customs duties which should have been levied. Arguments to this effect may be deduced from the abovementioned memorandum of the Commission and from the provisions of certain proposals for regulations already submitted in this connexion by the Commission. The general belief of traders and of the customs authorities might also be taken into consideration since in this case only the charges considered as payable according to the misinterpretation were taken into consideration by the traders in question for the purposes of passing on the corresponding costs to third parties and of fixing their prices. According to the Italian Government, the principle of the protection of legitimate expectation cannot however justify this solution because, first, the Member States are not under a duty of correct interpretation which is wider than or different from that imposed on any other person to whom the law applies, secondly, it is impossible to envisage any legal duty imposed on the trader concerned to abide by an interpretation, on the assumption that it is incorrect, and, thirdly, the principle of the protection of legitimate expectation cannot be called in aid in relation to the application of provisions which have the same mandatory force as regards both Member States and individuals.

In conclusion, the Italian Government proposes that the Court should rule that in the Community legal order the duty of repayment and the duty to recover sums which have not been levied does not necessarily correspond to the right not to pay them and to the duty to levy them and that the correct retroactive application of the Community rules cannot be required where a general misinterpretation common to both parties to the legal customs relationship has given rise medio tempore to payments not owed or to the failure to levy sums payable, except as from the dates on which the Community rules were interpreted authoritatively and the aspects of the conflict between those rules and the provisions of national law were settled authoritatively.

The point of view put forward by the Italian Government would have the result of limiting the direct effect of Article 13 (2) on the abolition of charges having an equivalent effect during the transitional period and of the analogous provisions of the agricultural regulations. This argument should be firmly rejected for the following reasons:

Although it follows from the case-law of the Court quoted above that citizens derive from the rules of the Treaty which have direct effect — in the present case Article 13 (2) of the Treaty — rights which the national courts must protect, it is necessary to clarify the content of those rights. This raises the question whether the fact, which is not in dispute, that individuals have the right to oppose any attempt to impose upon them the payment of charges having an effect equivalent to customs duties necessarily implies a personal right for individuals to the repayment of the sums which have been improperly levied.

In this respect the Court laid down in Case 33/76 (the REWE case quoted above) two limits to the principle of the power of the national rules to stipulate, in the absence of Community provisions in this connexion, the detailed rules for the repayment of charges having an equivalent effect which have been improperly levied by the State. On the one hand, the detailed rules laid down on repayment by the national rules cannot be less favourable than those relating to the repayment of sums improperly levied by the State in breach of national legislation. The Italian legal order, providing that the general rule of civil law relating to the recovery of sums improperly levied is applicable, even for the purpose of obtaining from the State the repayment of sums levied by way of tax where there is no power to impose a tax — cannot therefore refuse the repayment of charges having an equivalent effect which have been improperly levied according to Community law.

On the other hand, the detailed rules and time-limits cannot make it impossible in practice to exercise rights which the national courts are under a duty to protect. It follows by an argument de minori ad majus based on the judgment in Case 33/76 (the REWE case) that any solution which entirely excludes the exercise of those rights is incompatible with Article 13 of the EEC Treaty. The argument put forward by the Commission in Case 33/76, according to which Article 13 (2) is a provision which is insufficient to establish the right of an individual to the repayment of sums which have been improperly levied by the Member States — seems to be incorrect or obsolete.

The legality of the conduct of a Member State which repays charges having an equivalent effect which have been improperly levied or the existence of a personal right for individuals to obtain that repayment cannot be ruled out by Article 92 of the EEC Treaty. In fact, relying upon the judgment of the Court of 22 March 1977 Iannelli & Volpi S.p.A. v Ditta Paolo Aleroni [1977] ECR 557), the defendant in the main action considers that it is impossible to attribute to Article 92 of the Treaty a meaning contrary to that given to Article 13 (2). Moreover, even if one wished to accept for the moment that the right of an individual to the repayment of charges having an equivalent effect paid but not owed is not based on Article 13 (2) of the EEC Treaty, the illegal levying of a charge having equivalent effect is in any case an event giving rise to the duty of repayment according to the general principles of condictio indebiti and of unjust enrichment which are known not only in the Community legal order but constitute general principles common to all the Member States and which, as such, also form an integral part of the Community legal order.

It is clear that the repayment of charges which have been improperly levied cannot constitute an aid within the meaning of Article 92 because that repayment does not involve a reduction in the resources of the State but simply the performance of a Community obligation. Nor does this repayment constitute a benefit for Community importes but merely makes good a loss which those importers suffered at the date of the payment of the charge having an effect equivalent to customs duties which was not owed.

Considering next the arguments based on the fact that traders have passed on to their purchasers the financial burden of the charges having an equivalent effect paid but not owed, the defendant in the main action observes that it is in fact possible for the importer to pass on the financial burden. This fact cannot however prevent that financial burden from being classified as constituting a charge having equivalent effect. An importer might moreover in his turn have proceedings brought against him by his purchasers within the context of an action for repayment of sums paid but not owed or for unjust enrichment. In fact, in the case of the public health charges applied to the products in question, those charges are only imposed on imported products and an importer cannot therefore pass on that charge except where the price of the product is sufficiently lower than that of the national product.

In conclusion, the defendant in the main action proposes that the Court should reply in the affirmative to the first question and in the negative to the second question.

Relying upon the opinion of the Advocate General in Case 33/76 (the REWE case) which gave rise to the judgment of 16 December 1976, [1976] ECR 1989, the Commission considers that it is impossible to compare a situation such as that in Case 43/75 (the Defrenne case, quoted above), which involves fundamental interests of private individuals misled by the attitude both of the various Member States and of the Community institutions and whose financial resources may be limited, with the situation forming the subject-matter of this case which, on the contrary, involves the public administration of a Member State. Moreover it is superfluous to ask whether the right to the repayment of sums paid by way of charges having an equivalent effect may be envisaged after the judgment of the Court of Justice but before the directive adopted by the Commission under Article 13 (2) of the Treaty. In fact in the present case the Court has already established on the one hand that it is a charge having an equivalent effect and on the other that Article 13 (2) of the Treaty is directly applicable as from the end of the transitional period. After 1 January 1970 it was therefore no longer necessary to have recourse to a directive for the purpose of fixing the timetable for the abolition of charges having an equivalent effect.

Relying upon the judgment in Case 33/76 (the REWE case, quoted above), the Commission considers that in the absence of specific Community provisions and apart from the discrimination which may arise therefrom by virtue of the difference in the national legal systems, the detailed rules for the bringing of legal proceedings and in any case the time-limits for bringing such proceedings are governed by the provisions of national law. An examination of the present situation in the various Member States shows that the repayment of sums paid but not owed is automatic in all those States with the exeption of Denmark, where it is possible for reasons of natural justice and legal certainty to set up against the party claiming repayment of the sum in question the duty to show that he has not passed on that sum.

Examining the argument based on the distortion and discrimination which result from the differences between the national legal systems, the Commission observes that the Court has already taken stock of that problem in the judgment in Case 33/76 (the REWE case). It held that in the absence of Community rules on that subject, it is for the domestic legal system of each Member State to determine the procedural conditions governing actions at law, it being understood that such conditions cannot be less favourable than those relating to similar actions of a domestic nature. The Commission therefore concludes that the repayment of sums paid but not owed is automatic except in rare cases in which, for obvious reasons of natural justice and legal certainty, limits are imposed on repayment. In cases in which, like this one, those reasons do not occur, the repayment of the sums paid by way of charges having an equivalent effect should not be subject to any conditions.

According to the Italian Government, the repayment of sums improperly levied by the State would give rise to an adverse effect on the market and on competition in that reimbursement of a trader who has already passed on the charge to consumers constitutes an aid which is not authorized by the Treaty.

Analysing the concept of aid, the Commission considers, on the contrary, that that reimbursement does not come within the scope of Article 92 of the Treaty. The Court specified in the judgment of 23 February 1961 (Case 30/59, De Gezamenlijke Steenkolenmijnen in Limburg v High Authority of the European Coal and Steel Community [1961] ECR 1) that the concept of aid is wider than that of a subsidy in that it embraces not only positive benefits in cash or in kind but also all interventions which, in various forms, mitigate the charges in the budget of the undertaking which it should in principle bear. According to the Commission, this case-law implies that the State must voluntarily pay the aid in question by means of public funds. In this case, however, the State is compelled by the decision of a court to reimburse a tax which has been improperly levied.

In conclusion, the Commission considers that it is necessary to reply as follows to the questions referred to the Court by the Tribunale Civile e Penale, Milan :