France has adopted a system of taxation for light-tobacco cigarettes, mainly imported, which is higher than that applied to dark-tobacco cigarettes which are almost exclusively home-produced. The Commission, having taken the view that those measures are discriminatory in nature and contrary to Community law, brought an infringement action against the French Republic.

The Court holds that the Commission was right to find that France is in breach of its obligations under Community law in this matter. In line with its settled case-law, the Court has held that the fiscal measures in the EC Treaty cannot permit a system of taxation which leads to the favouring of domestic products to the detriment of similar imported ones.

Community law prohibits a national tax from taxing goods from another Member State more heavily than those with the same characteristics produced domestically. Moreover, a Member State cannot, by way of its tax system, protect its domestic production to the detriment of that of other Member States.

In support of its line of reasoning, the Court began by examining whether dark-tobacco cigarettes possess similar characteristics and if their usage is similar, two criteria adopted by the case-law to assess the similarity of two products.

Although the organoleptic characteristics (which relate to the sense organs) are not identical for light- and dark-tobacco cigarettes the fact remains that they are similar.

These products also have the same intended use .
In addition, the similarity of dark- and light-tobacco cigarettes has been established de facto by the identical tax treatment applied to them by Community law and by the classification of those two types of products in the same position in the Customs Nomenclature.

Having established the similarity, the Court then went on to examine the Commission's allegation that the levy of taxes which is higher for light-tobacco cigarettes - mainly imported, to that levied for dark-tobacco cigarettes - almost exclusively manufactured in France, is discriminatory in nature.

The Court has concluded that while there is no explicit distinction according to the origin of the products in question, the French system is tantamount to the adoption of a category of taxation clearly more favourable for domestic production than for imported production which is unfavourably treated.

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