Judgment of the General Court (Fifth Chamber, Extended Composition) of 8 July 2026.#P. sp. z o.o. v Dyrektor Izby Administracji Skarbowej w Łodzi.#Reference for a preliminary ruling – Taxation – Excise duties – Harmonisation of the structures of excise duties on alcohol and alcoholic beverages – Ethyl alcohol – Exemptions – Article 27(1)(b) of Directive 92/83/EEC – Definition of ‘products not for human consumption’ – Criteria for assessment.#Case T-381/25.

Provisional text

JUDGMENT OF THE GENERAL COURT (Fifth Chamber, sitting with five Judges)

8 July 2026 (*)

( Reference for a preliminary ruling – Taxation – Excise duties – Harmonisation of the structures of excise duties on alcohol and alcoholic beverages – Ethyl alcohol – Exemptions – Article 27(1)(b) of Directive 92/83/EEC – Definition of ‘products not for human consumption’ – Criteria for assessment )

In Case T‑381/25,

REQUEST for a preliminary ruling under Article 267 TFEU from the Naczelny Sąd Administracyjny (Supreme Administrative Court, Poland), made by decision of 29 January 2025, received at the Court on 27 May 2025, in the proceedings

P. sp. z o.o.

v

Dyrektor Izby Administracji Skarbowej w Łodzi,

other party:

Prokurator Krajowy,

THE GENERAL COURT (Fifth Chamber, sitting with five Judges),

composed of M. Sampol Pucurull, President, T. Pynnä, J. Laitenberger (Rapporteur), M. Stancu and W. Valasidis, Judges,

Advocate General: J. Martín y Pérez de Nanclares,

Registrar: V. Di Bucci,

having regard to the transmission of the request for a preliminary ruling to the General Court by the Court of Justice on 13 June 2025, pursuant to the third paragraph of Article 50b of the Statute of the Court of Justice of the European Union,

having regard to the fact that the case concerns the area referred to in point (b) of the first paragraph of Article 50b of the Statute of the Court of Justice of the European Union and the fact that there is no independent question relating to interpretation within the meaning of the second paragraph of Article 50b of that statute,

having regard to the written part of the procedure,

after considering the observations submitted on behalf of:

–        P., by M. Brończyk, radca prawny,

–        the Dyrektor Izby Administracji Skarbowej w Łodzi, by E. Białas-Giejbatow, acting as Agent,

–        the Polish Government, by B. Majczyna, acting as Agent,

–        the European Commission, by M. Björkland and B. Sasinowska, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1        This request for a preliminary ruling concerns the interpretation of Article 27(1)(b) of Council Directive 92/83/EEC of 19 October 1992 on the harmonization of the structures of excise duties on alcohol and alcoholic beverages (OJ 1992 L 316, p. 21).

2        This request has been made in proceedings between P. sp. z o.o., a company incorporated under Polish law, and the Dyrektor Izby Administracji Skarbowej w Łodzi (Director of the Tax Administration Chamber, Łódź, Poland) concerning the determination of harmonised excise duty liability in respect of two types of alcohol diluents produced by that company between January and April 2014.

 Legal framework

 European Union law

 Directive 92/83.

3        Article 19(1) of Directive 92/83 provides:

‘Member States shall apply an excise duty to ethyl alcohol in accordance with this Directive.’

4        Article 20 of Directive 92/83 provides:

‘For the purposes of this Directive the term “ethyl alcohol” covers:

–        all products with an actual alcoholic strength by volume exceeding 1.2% volume which fall within CN codes 2207 and 2208, even when those products form part of a product which falls within another chapter of the CN,

…’

5        Article 27(1) of Directive 92/83 is worded as follows:

‘Member States shall exempt the products covered by this Directive from the harmonized 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:

…

(b)      when both denatured in accordance with the requirements of any Member State and used for the manufacture of any product not for human consumption;

(c)      when used for the production of vinegar falling within CN code 2209;

…’

 CN

6        Chapter 22 of the Combined Nomenclature (‘the NC’) set out in Annex I to Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1987 L 256, p. 1), in the version resulting from Commission Implementing Regulation (EU) No 1101/2014 of 16 October 2014 (OJ 2014 L 312, p. 1), entitled ‘Beverages, spirits and vinegar’ includes, inter alia, heading 2207, which is worded as follows:

7        Chapter 38 of the CN, in the version applicable to the dispute in the main proceedings, entitled ‘Miscellaneous chemical products’, includes, inter alia, heading 3814, which is worded as follows:

 Polish law

8        Article 32(4) of the Ustawa o podatku akcyzowym (Law on Excise Duty) of 6 December 2008 (Dz. U. of 2011, No 108, item 626), as amended (‘the Law on Excise Duty’), provides:

‘…

4.      The following are also exempt from excise duty on account of their intended purpose:

…

(2)      ethyl alcohol denatured with denaturing agents, determined by the minister responsible for public finances from among the agents permitted for denaturing ethyl alcohol pursuant to the regulations issued under the Law of 2 March 2001 on the production of ethyl alcohol and the manufacture of tobacco products (Dz. U. of 2001, No 31, item 353), as amended, and used for the manufacture of products not for human consumption, only in the cases referred to in points 1 or 8 of paragraph 3, if the conditions referred to in paragraphs 5 to 13 are met; in the case of an end user, the tax exemption shall apply to quantities not exceeding the permissible consumption norms referred to in Article 85(1)(2)(b) and Article 85(2)(1)(b).’

 The dispute in the main proceedings and the questions referred for a preliminary ruling

9        Following a tax inspection of P. for the period from January to April 2014, the Naczelnik Drugiego Urzędu Skarbowego L. (Head of the Second Tax Office, L., Poland) (‘the first-instance tax authority’) declared that products manufactured by P. and described as ‘RRK 5’ and ‘RRK 12’ diluents, resulting from the addition of 1% by weight of propylene glycol to partially denatured alcohol, constituted denatured alcohol, and therefore should have been classified under heading 2207 20 00 of the CN. The first-instance tax authority therefore found that P. had erred in classifying those products under heading 3814 00 90 of the CN and in considering that they were not for human consumption. That authority also considered that, where a person liable for payment of harmonised excise duty declared that the partially denatured ethyl alcohol at issue was used to manufacture products not for human consumption, whereas the alcohol was actually used in the manufacture of a product which, as indicated by the CN, was still ethyl alcohol, the purpose of the exemption specified in Article 32(4)(2) of the Law on Excise Duty was undermined.

10      In addition, the first-instance tax authority found that only three of P.’s counterparties used the purchased RRK 12 product for their own purposes and indicated the manner of its use. In contrast, the other six counterparties resold the purchased good in a way that made it impossible to identify the recipients on the basis of cash register receipts. Under those circumstances, that authority, by decision of 26 August 2019, determined the excise duty liability of P. for the months from January to April 2014.

11      Following the appeal lodged by P., the Director of the Tax Administration Chamber, Łódź, by decision of 22 November 2019, upheld the decision of the first-instance tax authority. P. brought an action against that decision.

12      By judgment of 25 February 2021, the Wojewódzki Sąd Administracyjny w Łodzi (Regional Administrative Court, Łódź, Poland) dismissed the action.

13      On 12 May 2021, P. brought an appeal on a point of law against that judgment before the Naczelny Sąd Administracyjny (Supreme Administrative Court, Poland), which is the referring court.

14      On the one hand, the referring court considers that the existing case-law of the Court of Justice of the European Union does not provide a clear answer to the question whether it is possible to interpret Article 27(1)(b) of Directive 92/83 as meaning that, as regards the condition for exemption relating to the use of the product at issue for the manufacture of products not for human consumption, that manufacture must be confirmed by the classification of that product under a tariff code other than heading 2207 of the CN, so that failure to classify the product under such a code is sufficient to refuse to apply the exemption referred to in that provision.

15      On the other hand, if that were not the case, the referring court asks, in essence, whether refusal to exempt from harmonised excise duty products not intended by the manufacturer for human consumption may depend on the circumstances surrounding the sale of those products, in particular the manufacturer’s diligence in the course of its activities.

16      In those circumstances, the Naczelny Sąd Administracyjny (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)      In order to [refuse] the application of the exemption referred to in Article 27(1)(b) of [Directive 92/83] is it sufficient that the excise good in the form of ethyl alcohol denatured with propylene glycol is classified under CN code 2207 20?

(2)      If the answer to the first question is in the negative, is it necessary, in order to [refuse] the application of that exemption, for the tax authorities to demonstrate that a taxpayer who manufactures excise [products] that are not for human consumption is aware that those [products] are used for human consumption, or is it sufficient for the authorities to demonstrate circumstances permitting the conclusion that the taxpayer should have been aware of that fact?’

 Consideration of the questions referred

 The first question

17      By its first question, the referring court asks, in essence, whether Article 27(1)(b) of Directive 92/83 must be interpreted as precluding the exemption from excise duties on denatured ethyl alcohol used in the manufacture of products not for human consumption from being dependent on the condition that the intended use of those products has been established by their classification under a CN heading other than heading 2207.

18      It must be borne in mind that, in interpreting a provision of EU law, such as Article 27(1)(b) of Directive 92/83, it is necessary to consider not only its wording, but also the context in which it occurs and the objectives pursued by the rules of which it is part (see judgment of 17 June 2010, British American Tobacco (Germany), C‑550/08, EU:C:2010:349, paragraph 35 and the case-law cited).

19      In the first place, it follows from the wording of Article 27(1)(b) of Directive 92/83 that the exemption provided for in that article depends on compliance with two cumulative conditions, namely, first, that the alcohol be denatured in accordance with the requirements of any Member State and, second, that it be used for the manufacture of any product not for human consumption.

20      In that regard, the question of the classification of the product at issue under a specific CN code is not referred to in the wording of Article 27(1)(b) of Directive 92/83, with the result that it cannot be inferred from that article that the EU legislature intended to define classification under a specific CN code as being in itself a criterion for the application of the exemption in question.

21      In the second place, as regards the context of Article 27(1)(b) of Directive 92/83, it should be noted that it forms part of a series of mandatory exemptions applicable to alcohol and alcoholic beverages belonging to certain particular categories subject to specific uses.

22      The Court has already held, in that regard, that the exemption of products covered by Article 27(1)(a) and (b) of Directive 92/83 is the rule and refusal is the exception. Furthermore, the power granted to Member States by Article 27(1) of Directive 92/83 to lay down conditions of that exemption ‘for the purpose of ensuring the correct and straightforward application of such exemptions and of preventing any evasion, avoidance or abuse’ cannot detract from the unconditional nature of the obligation imposed by that provision to grant exemption (see judgment of 7 December 2000, Italy v Commission, C‑482/98, EU:C:2000:672, paragraph 50 and the case-law cited).

23      More specifically, the Court has already held that ethyl alcohol contained in a product which is not intended for human consumption and which has been denatured in accordance with a method approved in a Member State benefits from the exemption provided for in Article 27(1)(b) of Directive 92/83 (see judgment of 28 February 2019, Bene Factum, C‑567/17, EU:C:2019:158, paragraph 21 and the case-law cited).

24      Thus, where the alcohol is already incorporated in a product not for human consumption, the grant or refusal of an exemption under Article 27(1)(b) of Directive 92/83 is dependent on the denaturing method (see, to that effect, judgment of 7 December 2000, Italy v Commission, C‑482/98, EU:C:2000:672, paragraphs 40 and 41).

25      Finally, the Court has held that it would be contrary to Directive 92/83 to withhold exemption for a product which meets the conditions laid down in Article 27(1)(b) solely because it has been found that the use for which it is really intended does not correspond with the name assigned to it by the trader (see judgment of 28 February 2019, Bene Factum, C‑567/17, EU:C:2019:158, paragraph 22 and the case-law cited).

26      It is therefore clear from the its case-law that the Court precludes the application of criteria or conditions which are not, in themselves, apparent from the wording of Article 27(1)(b) of Directive 92/83. On the contrary, it must be ascertained, on the basis of specific evidence, whether the conditions relating to the use of ethyl alcohol for the manufacture of products not for human consumption are objectively fulfilled, without that assessment being limited to the mere finding of classification under a specific CN code.

27      Furthermore, such an interpretation is also supported by the wording of the first indent of Article 20 of Directive 92/83. That article, which provides a definition of the concept of ‘ethyl alcohol’, for the purposes of applying Directive 92/83, provides that that concept covers, inter alia, all products falling within heading 2207 of the CN and which have an alcohol strength of more than 1.2% vol, ‘even when those products form part of a product which falls within another chapter of the CN’. However, although the fact that ethyl alcohol is incorporated in a product falling within another chapter of the CN does not preclude it from being classified as ethyl alcohol within the meaning of the first indent of Article 20 of Directive 92/83, that does not mean that the classification of that product in another chapter of the CN constitutes a condition in that regard. Thus, as it is worded, the first indent of Article 20 of Directive 92/83 does not, for the purposes of the application of that directive, preclude ethyl alcohol from being incorporated into a product classified under the same chapter of the CN, or even under the same CN heading, that is to say heading 2207.

28      In addition, that interpretation is borne out by the scheme of Article 27(1) of Directive 92/83. Article 27(1)(c) of Directive 93/82 provides, for its part, for the exemption of ethyl alcohol used ‘for the production of vinegar falling within CN code 2209’. If the legislature had intended to add, for the exemption of products denatured in accordance with the requirements of a Member State and used for the manufacture of products not for human consumption, a condition relating to the exclusion of a specific tariff code, it would have done so explicitly in Article 27(1)(b) of that directive.

29      In the third place, as regards the objectives pursued by Directive 92/83, the exemptions provided for by that directive seek, in particular, to neutralise the impact of excise duties on alcohol used as an intermediate product in other commercial or industrial products (see judgment of 22 December 2022, Quadrant Amroq Beverages, C‑332/21, EU:C:2022:1031, paragraph 47 and the case-law cited).

30      Thus, it follows from Article 27(1)(b) of Directive 92/83, read in conjunction with the twentieth recital of that directive, that the application of the exemption under that provision by a Member State depends on the end-use of the products in question (see, by analogy, judgment of 9 December 2010, Repertoire Culinaire, C‑163/09, EU:C:2010:752, paragraph 49).

31      An interpretation to the effect that the application of the exemption referred to in Article 27(1)(b) of Directive 92/83 must be refused for ethyl alcohol denatured in accordance with the requirements of a Member State and used for the manufacture of products not for human consumption on the sole ground that the products for whose manufacture it was used fall within a specific CN code is liable to undermine the objective of neutralising the impact of excise duties on ethyl alcohol used as an intermediate product in other commercial or industrial products. Indeed, in so far as the products not for human consumption are sold to persons to be used for purposes which exclude any human consumption, ethyl alcohol denatured in accordance with the requirements of a Member State used in those products would be subject to excise duties, even though it is in fact used for such purposes.

32      Furthermore, although it is true, under Article 27(1) of Directive 92/83, read in conjunction with the twenty second recital of that directive, that the Member States may lay down conditions for the purpose of ensuring the correct and straightforward application of the exemptions provided for in that provision and of preventing any evasion, avoidance or abuse, it is clear from the case-law that, in exercising that power, the Member States concerned must put forward concrete, objective and verifiable evidence of a serious risk of evasion, avoidance or abuse and ensure that the conditions laid down by that Member State by virtue of the power thus conferred on it cannot go beyond what is necessary to attain that objective (see, to that effect, judgment of 9 December 2010, Repertoire Culinaire, C‑163/09, EU:C:2010:752, paragraph 52 and the case-law cited). As a result, the Member States cannot make the application of the exemption under Article 27(1)(b) of Directive 92/83 conditional on compliance with conditions which are not proven, by concrete, objective and verifiable evidence, to be necessary to ensure the correct and straightforward application of such an exemption and to prevent any evasion, avoidance or abuse (see, by analogy, judgment of 9 December 2010, Repertoire Culinaire, C‑163/09, EU:C:2010:752, paragraph 53).

33      However, it seems clear from the information provided by the referring court that the condition laid down by the national tax authorities which is at issue in the main proceedings, namely the confirmation of the intended use of the product not for human consumption under a code other than heading 2207 of the CN, is neither necessary to ensure the correct application of the exemption provided for in Article 27(1)(b) of Directive 92/83, nor to prevent evasion, avoidance or abuse, which it is, however, for the referring court to ascertain, on the basis of the concrete, objective and verifiable evidence available to it.

34      In light of all the foregoing considerations, the answer to the first question is that Article 27(1)(b) of Directive 92/83 must be interpreted as precluding the exemption from excise duties for ethyl alcohol denatured in accordance with the requirements of a Member State used in the manufacture of products not intended for human consumption from being dependent on the condition that the intended use of those products has been established by their classification under a CN heading other than heading 2207, unless it is apparent from concrete, objective and verifiable evidence that that condition is necessary to ensure the correct application of that exemption and to prevent evasion, avoidance or abuse.

 The second question

35      By its second question, raised only in the event that the first question is answered in the negative, the referring court asks, in essence, whether, in order to refuse the benefit of the exemption under Article 27(1)(b) of Directive 92/83, the tax authorities must demonstrate that the taxable person manufacturing products not for human consumption containing ethyl alcohol subject to excise duty knew that they were being used for human consumption, or whether it is sufficient for them to establish the existence of evidence from which it may be concluded that the taxable person ought to have been aware of that usage.

36      As formulated, the question covers only the specific scenario of knowledge or the possibility of knowledge on the part of the taxable person manufacturing the products at issue concerning potential subsequent usage of those products which is not consistent with their initial purpose. However, it does not refer to circumstances involving evasion, avoidance or abuse justifying the application of Article 27(5) of Directive 92/83. That question is therefore based on the premiss that knowledge or the possibility of knowledge on the part of the taxable person manufacturing the products at issue of a potential subsequent consumption of those products which is not consistent with their original purpose is a sufficient ground in itself to refuse the benefit of the exemption provided for in Article 27(1)(b) of Directive 92/83.

37      In that regard, it should be borne in mind, as is apparent from paragraph 23 above, that ethyl alcohol contained in a product which is not for human consumption and which has been denatured in accordance with a method approved in a Member State benefits from the exemption provided for in Article 27(1)(b) of Directive 92/83 (see judgment of 28 February 2019, Bene Factum, C‑567/17, EU:C:2019:158, paragraph 21 and the case-law cited).

38      It is clear from paragraph 25 above that it is contrary to Directive 92/83 to withhold exemption for a product which meets the conditions laid down in Article 27(1)(b) solely because the use for which it is really intended does not correspond with the name assigned to it by the trader (see judgment of 28 February 2019, Bene Factum, C‑567/17, EU:C:2019:158, paragraph 22 and the case-law cited).

39      It follows from the foregoing that ethyl alcohol denatured in accordance with the requirements of a Member State, contained in products presented as diluents and, therefore, as products not for human consumption, cannot be denied the exemption from harmonised excise duty set out in Article 27(1)(b) of Directive 92/83 on the ground that those products are, at least in part, used for human consumption (see, to that effect, judgment of 28 February 2019, Bene Factum, C‑567/17, EU:C:2019:158, paragraph 23).

40      In the present case, although the referring court states, in essence, that the fact that P. showed a lack of diligence when selling the products which it manufactured may have led to the use of those products for human consumption, it is also clear from the request for a preliminary ruling that those products, sold by P. under the names ‘RRK 5’ and ‘RRK 12’, were sold as diluents. Furthermore, subject to verification by the referring court, there appears to be no indication that the persons who purchased them, as the case may be, for human consumption, were not aware that they were purchasing products marketed as diluents.

41      Thus, the measures taken by P. when marketing the goods at issue in the main proceedings do not appear to have prevented those goods from being presented as diluents not for human consumption, which it is for the referring court to ascertain.

42      However, with the exception of cases of evasion, avoidance or abuse, justifying the application of Article 27(5) of Directive 92/83, as long as measures taken by the manufacturer of the products at issue as regards their marketing do not prevent those products from appearing as products not intended for human consumption, then those measures cannot deprive that manufacturer of the exemption from excise duty set out in paragraph 1(b) of that article (see, to that effect, judgment of 28 February 2019, Bene Factum, C‑567/17, EU:C:2019:158, paragraph 30). It is the provisions relating to cases of evasion, avoidance or abuse which make it possible to deal with situations in which the actual purpose of the products at issue differs from their intended purpose.

43      It follows that Article 27(1)(b) of Directive 92/83 must be interpreted as meaning that the benefit of the exemption from harmonised excise duty which that article provides for cannot be denied to a taxable person manufacturing products not for human consumption containing ethyl alcohol subject to excise duty, such as diluents, on the sole ground that that taxable person knew or should have known that those products were being used for human consumption.

 Costs

44      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the General Court, other than the costs of those parties, are not recoverable.

On those grounds,

THE GENERAL COURT (Fifth Chamber, sitting with five Judges)

hereby rules:

1.      Article 27(1)(b) of Council Directive 92/83/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on alcohol and alcoholic beverages

must be interpreted as precluding the exemption from excise duties for ethyl alcohol denatured in accordance with the requirements of a Member State used in the manufacture of products not intended for human consumption from being dependent on the condition that the intended use of those products has been established by their classification under a heading in the combined nomenclature set out in Annex I to Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff other than heading 2207, unless it is apparent from concrete, objective and verifiable evidence that that condition is necessary to ensure the correct application of that exemption and to prevent evasion, avoidance or abuse.

2.      Article 27(1)(b) of Directive 92/83

must be interpreted as meaning that the benefit of the exemption from harmonised excise duty which that article provides for cannot be denied to a taxable person manufacturing products not for human consumption containing ethyl alcohol subject to excise duty, such as diluents, on the sole ground that that taxable person knew or should have known that those products were being used for human consumption.

Delivered in open court in Luxembourg on 8 July 2026.

[Signatures]

---

*      Language of the case: Polish.