CAAD 640/2017-T: ISP Tax on Colored and Marked Diesel – Arbitral Decision on Petroleum Products Tax Liquidation

ARBITRAL DECISION

Rapporteur:

A..., NIF ..., (hereinafter designated as "Claimant"), resident at Street ..., no...–..., ...-... ..., filed a request for arbitral pronouncement and constitution of a singular arbitral tribunal, on 5 December 2017, pursuant to the provisions of article 4 and article 10, no. 2 of Decree-Law no. 10/2011, of 20 January (Legal Framework for Arbitration in Tax Matters, hereinafter designated as "LFRM"), in which the Tax and Customs Authority (hereinafter designated as "Respondent" or "AT") is the respondent.

The Claimant seeks, in the aforementioned request for arbitral pronouncement, the annulment of the tax act corresponding to the official assessment relating to Tax on Petroleum Products and Energy (ISP), in the amount of € 4,386.08, Road Service Contribution (CSR), in the amount of € 2,338.28, withholding tax in the amount of 46.91 Euros and compensatory interest in the amount of 435.97 Euros and printed matter in the amount of 1.80 euros, for a total amount of 7,209.04 Euros (seven thousand two hundred and nine euros and four cents), notified by office no. ... of 28/08/2017.

The request for constitution of the Singular Arbitral Tribunal was accepted by the President of CAAD and notified to the Respondent on 6 December 2017.

The Claimant did not proceed with the appointment of an arbitrator, whereupon, pursuant to the provisions of paragraph a) of article 6, no. 2 and paragraph b) of article 11, no. 1 of the LFRM, the President of the Deontological Board of CAAD appointed the undersigned as arbitrator of the singular arbitral tribunal, who communicated acceptance of the task within the applicable period and the parties did not manifest any refusal of the appointment, pursuant to article 11, no. 1, paragraphs a) and b) of the LFRM and article 7 of the Deontological Code.

On 15 February 2018, the arbitral tribunal was constituted.

Notified for this purpose on 15 February 2018, the Respondent submitted its Answer on 20 March 2018, having sent a copy of the administrative file on the same date.

On 23 March 2018, the arbitral hearing provided for in article 18 of the LFRM was dispensed with, and the Claimant and Respondent were invited to make written submissions.

The Claimant submitted written submissions on 9 April 2018 and the Respondent submitted its submissions on 23 April, maintaining, in essence, positions already taken.

On 27 April 2018, the time limit for publication of the final decision was set at 4 June 2018.

The Claimant sustains its request, in summary, as follows:

As a preliminary matter, its procedural legitimacy and standing to sue, considering that the commercial company of which it was the sole shareholder was dissolved on 22/11/2016, and being the debt joint and several, concludes that it has legitimacy and standing to sue personally.

The Claimant was notified, in its capacity as manager of the commercial company B..., Lda., NIPC ... (hereinafter "company"), by the Customs Delegation of ..., to proceed with the payment of € 7,209.04, corresponding to € 4,386.08 for ISP, € 2,338.28 for CSR tax, € 46.91 for withholding tax, € 435.97 for compensatory interest and € 1.80 for printed matter.

The Claimant alleges that the company was subject to an inspection action with no. OI2016..., the draft conclusions of which of the customs inspection report, dated 14 March 2017, were notified to it by office no. .../... /16 (...), with prior hearing exercised in writing on 31/03/2017.

The company was notified of the final inspection report by Office no. .../... /... (...) of 19/04/2017, maintaining, according to the Claimant, the conclusions of the project presented, notwithstanding the arguments raised in the prior hearing – namely:

The firm did not register, as a reseller of GCM, 886,500 lt during the year 2013 and 221,700 lt during the year 2015;

Invoices were issued in 2015 and 2016, corresponding to 16,038.380 lt and 3,398.360 lt, respectively, without identification of any customer and therefore without identification of any cardholder;

Invoices were issued in 2015 corresponding to 1,339.750 lt of GCM, with identification of customers not holding access cards;

Concluding that the AT, as raised by the Claimant, should proceed with the official assessment of ISP due, which should be carried out on the basis of the difference between the rates of roadway diesel and coloured and marked (agricultural) diesel, provided for in each of the periods (...).

Thus, the amount of tax determined is € 6,771.27, to which is added the respective compensatory interest calculated by applying the provisions of article 35 of the LGT.

By office no. ... of 23/08/2017 the Claimant was notified of a decision on the request for reduction of the penalty, and

By office no..., of 28/08/2017, the Claimant was notified of the official assessment, which it challenges, for payment of € 7,209.04, corresponding to € 4,386.08 for ISP, € 2,338.28 for CSR tax, € 46.91 for withholding tax, € 435.97 for compensatory interest and € 1.80 for printed matter.

Amounts which the Claimant paid on 08/09/2017.

The Claimant alleges, first and foremost, that the AT's reasoning is obscure and deficient, which, in its understanding, amounts to a lack of reasoning of the tax act in question in the proceedings, raising in particular that, in the context of the inspection report of action no. OI2016..., the assessment act states that "(...) information was gathered from the fuel supplier (C..., S.A.)", which the Claimant alleges it does not know, having not been a supplier to the company of which it was manager.

On the other hand, it alleges that the value of the CSR tax rate (€ 2,338.28), the assessment act is not in accordance with what is provided in the aforementioned final report (€ 2,385.19), which, according to the Claimant, has an implication for the withholding tax.

The same is verified for the roadway diesel rate (after 11/02/2016): in the assessment act the value of € 338.41 is stated and in the report the value of € 318.41 is stated, and for the CRS rate (applicable to the year 2013), in which in the assessment act the value of € 91.00 is stated and in the report the value of € 89.12 is stated.

The Claimant also alleges that the reasoning contained in the assessment act is obscure and even unintelligible with reference to the counting of compensatory interest, since the assessment states that they are calculated daily at a rate of 4.5% per year, in accordance with Ordinance no. 291/2003, of 08/04 "in the situation relating to 2013 and 2015, from 31 December and in the situation relating to 2016, from the date of commencement of the inspection procedure and, in both cases until the date of the assessment registration".

Alleging that the Claimant does not know how to decipher the "two cases" and much less the calculation carried out in the years 2015 and 2016 since, as regards the year 2015: from 01/12/2015 when, moments before it states that it should have been from 31 December, and with reference to the year 2016: from 04/05/2016, when, moments before it states that it should have been from the start of the inspection procedure, which finally only occurred on 10 November 2016, with the signature of the service order by the company's certified accountant.

On the other hand, it alleges that the AT supports an incorrect application and interpretation of article 93, no. 5 of the CIEC, with the assessment suffering from errors in factual and legal grounds.

From the final inspection report that gave rise to the assessment of the tax being challenged, the Claimant concludes that the AT took into account the analysis of the records made in the TPA no. ..., installed at the fuel supply station of the ..., ..., used by the company for the purpose of reselling GCM.

The Claimant raising that, according to the report, the sum of litres consumed, with reference to the TPA, in the years 2013 to 2016, results in:

For the year 2013 — 26,153.500 lt

For the year 2014 — 31,557.300 lt

For the year 2015 — 26,078.30 lt

For the year 2016 — 6,872.600 lt

Totaling 90,661.700

From the elements collected by the AT, relating to GCM inventories, declared for tax purposes and referring to the years 2012 to 2015, results in:

For the year 2012 — 2,200.000 lt

For the year 2013 — 3,466.000 lt

For the year 2014 — 700.000 lt

Totaling 2,392.000

According to the Claimant, it also results from the report that B... purchased the following quantities from its supplier D...:

For the year 2013 — 28,006.000 lt

For the year 2014 — 28,003.000 lt

For the year 2015 — 27,992.000 lt

Totaling 84,001.000

In view of such elements, the Claimant alleges that the AT concludes, inter alia, that with regard to the year 2013 there are 886,500 lt of unrecorded sales and, in relation to the year 2015, there are 221.700 lt of unrecorded sales.

The Claimant also alleges that the AT, as a result of the analysis carried out on the data of sales declared during the years 2015 and 2016 (using SAF-T Invoicing), using as a criterion the identification of the customer in each of the sales documents issued, issued invoices in 2015 and 2016 corresponding to 16,038.380 lt and 3,398.360 lt, respectively, without identification of any customer and therefore without identification of any access cardholder.

Furthermore, it alleges that the AT concludes that invoices were issued in 2015 for a total of 1,339.750 lt of GCM, with identification of customers not holding access cards.

The AT having proceeded with the official assessment of an amount of tax that the Claimant partially challenges, regarding the points described in (xx) and (xxi).

The Claimant alleges that, with reference to the years 2015 and 2016, the provisions of no. 5 of article 93 and paragraph h) of no. 2 of article 4 of the CIEC, which provide that the owner or legal person responsible for operating the authorized stations for public sale of coloured and marked diesel is responsible for the payment of the amount of tax resulting from the difference between the level of taxation applicable to roadway diesel and that applicable to coloured and marked diesel, relating to the quantities that they sold and that are not properly recorded in the computer system associated with the electronic cards assigned, as well as in relation to quantities for which the corresponding invoices were not issued in the name of the cardholder.

Norms complemented by norms of a regulatory nature, namely by Ordinances nos. 117-A/2008, of 8 February and 361-A/2008 of 12 May, both approved still under the previous CIEC, which remain in force.

Ordinance no. 361-A/2008, of 12 May, establishes the rules for the commercialization of GCM and the respective control mechanisms.

Considering that the Claimant breaches of no. 8 of the aforementioned ordinance, specifically the failure to issue the invoice or equivalent document, issued in the name of the holder of the respective microchip card, could at most make its author incur in administrative liability in accordance with article 109, no. 2, paragraph p) of the RGIT, for breach of commercialization rules.

The Claimant understands that the aforementioned breach does not make the author incur in the responsibility provided for in article 93, no. 5 of the CIEC, when, as in this case, the majority of sales were recorded in POS terminals at the moment they occurred, in this case in TPA no. ... .

A position that the AT did not assume, concluding that a supply made to a cardholder that is properly recorded in the computer system underlying the assigned electronic card, but in which the invoice was issued to "final consumer", automatically makes the owner or legal person responsible for operating the authorized stations for public sale responsible for such quantities, in accordance with article 93, no. 5 of the CIEC.

In this way, the AT, according to the Claimant, "invalidates" the quantities of 16,038.380 lt (in 2015) and 3,398.360 lt (in 2016) merely because invoices were issued in the respective years without identification of any customer, disregarding the quantities recorded in TPA no. ...: 26,078.300 lt (2015) and 6,872.600 (2016), particularly, according to the Claimant, when it is possible to make the respective correspondence.

Similarly, as regards the year 2015, with the issue of commercial documents with identification of purchasers who are not access cardholders, the Claimant questions why the owners or legal persons responsible for operating the authorized stations for their public sale should be held responsible for the quantities of GCM sold invoiced with tax identification numbers of persons not holding access cards, persons who, objectively, made improper use of an access card that does not belong to them.

The Claimant understands that what the legislator wanted to establish in the final part of the legal rule is that responsibility for quantities, even if not registered in the control system, were not, however, invoiced with the tax identification number of an electronic card beneficiary.

Concluding that one is faced with a hypothetical rule of incidence based on a presumption that the GCM was not sold to holders of a microchip card nor used for the purposes for which its commercialization is legally authorized, but rather for the purposes for which roadway diesel is intended.

And thus, being a presumption relating to tax incidence, it would always be possible to rebut it by demonstrating that the diesel was sold to microchip card holders who had legal conditions to acquire it.

And since the cards are personal and non-transferable, the holders are responsible for their use with a code known only to themselves.

The interpretation, as the Claimant alleges the AT makes, of article 93, no. 5 of the CIEC is simply to "remove from the scene" the quantities actually registered in the electronic control system, looking only at the issue of invoices.

Such interpretation violates the aspect of balance, rationality or strict proportionality, according to the Claimant.

Since, even if the AT recognizes, according to the Claimant, that 26,078.300 lt and 3,872.600 lt were sold in 2015 and 2016, respectively, to cardholders and that such sales were registered in the computer system underlying the assigned cards, ruling out any hypothesis of fraud, still if the statute of the legal norm in question were applied, only and solely because the respective invoices were issued to final consumers or to consumers not holding the access card but who made improper use of one.

There was, according to the Claimant, no harm whatsoever to the tax revenue, even if there is an improper act, it is an administrative violation due to breach of Ordinance no. 361-A/2008, of 12 May, on pain of violation of the principle of ne bis in idem.

Concluding, thus, that the Claimant's interpretation of the AT is wrong, impugning in this way the assessment, partially, as regards the years 2015 and 2016 in relation to the amounts invoiced without customer identification (final consumer) of 16,038.380 lt and 3,398.360 lt, respectively, and in relation to the year 2015, as regards quantities invoiced with identification of a customer not holding an access card, of 1,085.80 lt.

In turn, the Respondent replied sustaining the lack of merit of the request for arbitral pronouncement and alleging, in summary, that:

In the context of the inspection action carried out under Service Order no. OI2016..., of 08.11.2016, of the Customs Delegation of ..., it proceeded with the control of the commercialization of coloured and marked diesel from that fuel supply station, taking into consideration the records made in TPA no. ..., installed at the PAC of ..., in the municipality of ..., for the period between the year 2013 and the year 2016.

In the context of the action, initiated on 10.11.2016, it proceeded with the analysis of the commercial and accounting elements collected from the operator's accounting office and the relation of records made in the TPA used for this purpose, obtained from the General Directorate of Agriculture and Regional Development (DGADR).

The Respondent verified, referring to the final report, that

· As regards the Determination of Actual Sales, using final inventories and purchases made in each of the years under analysis, it was possible to determine the quantity of actual sales.

For the year 2013 — 27,040.000 lt

For the year 2014 — 30,769.000 lt

For the year 2015 — 26,300.000 lt

For the year 2016 — 2,392.000 lt

· As a result of the comparison between actual sales and records made in TPA no. ..., it was verified that, in the years 2013 and 2015, 886,500 lt and 221,700 lt, respectively, of commercialized GCM were not recorded;

· As a result of the analysis carried out on the sales data declared during the years 2015 and 2016, using as a criterion the identification of the customer in each of the sales documents issued, it concluded:

• issuance of invoices in 2015 and 2016, corresponding to 16,038.380 lt and 3,398.360 lt, respectively, without identification of any customer and therefore without identification of any access cardholder

• issuance of invoices in 2015 corresponding to 1,339.750 lt of GCM, with identification of customers not holding access cards.

(iv) As a result of what the AT determined:

1st - Lack of recording in the computer system used for this purpose (TPA) of GCM during the years 2013 and 2015;

2nd - Issuance, in 2015 and 2016, of commercial documents without identification of the respective purchasers;

3rd - Issuance, in 2015, of commercial documents with identification of purchasers not holding access cards.

The Claimant was notified, on 16.03.2017, of the draft report of the action to make a statement at the prior hearing, which it did, alleging, according to the AT, ignorance of the law that came into force on the obligation to issue all sales documents with identification of beneficiaries, and expressing the intention to proceed with payment of the tax debt, and further requesting payment of the penalty reduced by applying the provisions of article 29 of the RGIT.

On 16.03.2017 the Claimant was notified of the Final Report of the Inspection Action, pursuant to article 62 of the Complementary Regime of Tax Inspection Procedure.

As a result of the decision of 18.04.2017, of the Director of the Customs Authority of ..., set forth in the Final Report of the ANI, the now Claimant was notified by Office no. ..., of 28.08.2017 to proceed with payment of the debt determined in the total amount of 7,209.04 € corresponding to 4,386.08 € of ISP, 2,338.28 € of CRS tax, 46.91 € of withholding tax, 435.97 € of compensatory interest and 1.80 € of printed matter.

The Claimant made the payment and impugned the debt in question by filing the present arbitral request.

According to the AT, the tax regime for coloured and marked diesel is set out in the Code of Special Consumption Taxes (CIEC), approved by Decree-Law no. 73/2010, of 21 June, with the amendments that were subsequently introduced.

With regard to the subjective incidence of special consumption taxes (SEC), article 4 of the CIEC provides that, in addition to the authorized warehouse keeper and the registered consignee, are also taxable persons in such taxes, natural or legal persons who introduce into consumption, sell or use products subject to tax, in other situations of irregularity, as provided in paragraph h) of no. 2 of this article.

Article 93 of the CIEC provides, relating to the tax benefit embodied in the application of reduced rates of Tax on Petroleum Products and Energy, as regards the use of certain petroleum products, in particular coloured and marked diesel (GCM), in specific situations.

Being at issue, in the present proceedings, facts of a tax nature occurring in 2013, 2015 and 2016, it is, however, necessary to take into account, because relevant for the case in question, the wording of no. 5 of article 93 of the CIEC in force at the date of the facts in question, as given by Law no. 64-B/2011, of 30 December.

Applying to the facts occurring in 2015, and in 2016, no. 5 of the same article 93, the wording given by Law no. 82-B/2014, of 31 December.

The regime set out in the CIEC, relating to the taxation and commercialization of GCM, was regulated by Ordinances nos. 117-A/2008, of 8 February, and 361-A/2008, of 12 May, approved still under the previous Code of Special Consumption Taxes, approved by Decree-Law no. 566/99, of 22 December, which was revoked by no. 1 of article 7 of the Decree-Law approving the current CIEC.

Such regulation, as, indeed, the other regulatory provisions approved in light of the previous CIEC, remain in force by virtue of the transitional norm contained in article 5 of Decree-Law no. 73/2010, of 21 June.

Ordinance no. 117-A/2008 provides, which regulates the formalities and procedures relating to the recognition of tax benefits, the control of the exemptions and reduced rates provided for in no. 1 of article 71 and article 74 of the CIEC (current articles 89 and 93 of the CIEC in force), and which also regulates the matter of recognition of the benefit relating to the use of coloured and marked diesel in the uses referred to in no. 3 of article 93, by means of prior assignment of a microchip/electronic card.

Thus, according to the AT, as results from the provisions of no. 5 of Ordinance no. 117-A/2008, the tax benefits realized through the use of coloured and marked diesel are carried out, necessarily, by means of a microchip card, provided for in no. 5 of article 74 (no. 5 of 93) of the CIEC and, in the event of breach of the assumptions of the tax benefit, the tax due is also assessed, considering that there is a breach of the same assumptions when there is, in particular, use of authorized products for an end different from the declared one and the use of products in unauthorized equipment (nos. 12 and paragraphs b) and c) of no. 13 of the above-mentioned Ordinance).

Ordinance no. 361-A/2008, of 12 May, establishes the rules for the commercialization of GCM and the respective control mechanisms.

The commercialization of this type of product is therefore subject to the specificities described, by virtue of the reduced rate of tax from which it benefits.

As for its introduction into consumption, generally prior to such commercialization, it is carried out in accordance with the general part of the CIEC, being subject to the formalities provided for in article 10 of the same code, formalities which are associated with the exigibility and subsequent assessment and payment of tax (articles 8, 9 and 10 of the CIEC).

And article 4 of the CIEC, above mentioned, relating to subjective incidence, provides, in no. 2, paragraphs e) and h), as taxable persons of tax.

According to the provisions of nos. 1 and 2 of article 88 (Objective incidence) of the CIEC, roadway diesel and coloured and marked diesel are subject to Tax on Petroleum Products and Energy.

Resulting, therefore, unequivocal, according to the AT, that the legislator intended that only GCM used for certain purposes would benefit from the reduced rate of ISP/ISPPE, use which is controlled by means of a mechanism for supplying that product only to certain purchasers, who must be holders of the electronic card assigned by the services of the DGADR of the Ministry of Agriculture, with the assignment of this card depending on proof of ownership or operation of eligible equipment.

The reading or recording of this card in terminals connected to the computer system instituted for purposes of controlling the acquisition and allocation of GCM is mandatory at the time of fueling, establishing a rule of tax responsibility of the owners or persons responsible for operating public sales points of GCM, whenever the fueling carried out is not properly recorded.

Being equally mandatory, in this context, according to the AT, the issuance of an invoice or equivalent document issued in the name of the same electronic cardholder, as only this assures that it is the cardholder himself who is fueling, and not a third party, since that card is personal and non-transferable.

From this it results that the legislator, according to the AT, intended that the tax benefit, relating to the application of reduced rates to GCM, be subject, for what matters here, to the following requirements:

• GCM may only be supplied or sold to holders of properly licensed fuel supply stations who are holders of automatic payment terminals - point of sale, TPA-POS (TPA Terminals);

• GCM may only be sold at fuel supply stations to beneficiaries of an exemption or reduction in ISP rate who are holders of microchip/electronic cards, instituted for purposes of controlling the allocation of GCM to legally provided destinations, which are personal and non-transferable and through which all transactions of coloured and marked diesel are recorded in the computer system managed by the Interbank Services Company (SIBS);

• Such sales are necessarily recorded in the computer system, through TPA Terminals, at the moment they occur;

• Recording in the computer system, through TPA Terminals, of each fueling carried out, does not dispense with the issuance of the respective invoice or equivalent document, issued in the name of the holder of the respective microchip card;

• In the event of typing errors or other anomalies verified in the use of TPA Terminals, they must be immediately reported;

• The owner or legal person responsible for operating the authorized stations for the sale of GCM is responsible for the payment of the amount of tax resulting from the difference between the level of taxation applicable to roadway diesel and the rate applicable to GCM:

i) In relation to the quantities that they sell and that are not properly recorded in the electronic control system,

ii) As well as in relation to quantities for which the corresponding invoices are not issued in the name of the cardholder.

Thus, according to the AT, coloured and marked diesel is a conditionally used product, which is embodied in a tax benefit with a reduced ISP rate, being, thus, by virtue of the regime in force, a conditioned product:

• To the equipment provided for in no. 3 of article 93 of the CIEC, approved by Decree-Law no. 73/2010, of 21 June;

• To the ownership of the electronic card for its acquisition – cf. no. 5 of article 93 of the CIEC, in conjunction with no. 5 of Ordinance no. 117-A/2008, of 8 February and no. 11 of Ordinance no. 361-A/2008, of 12 May;

• To prior recognition by the competent authorities – by virtue of no. 11 of Ordinance no. 361-A/2008, of 12 May, according to which, coloured and marked diesel can only be supplied to the equipment provided for in no. 3 of article 93 of the CIEC after verification by the competent entity of the assumptions and conditions required under the applicable legislation, with no. 7 of Ordinance no. 117-A/2008, of 8 February, providing that beneficiaries are subject, on pain of incurring in a tax violation, to the obligation of informing the competent authorities of any change in the assumptions of the tax benefit and other relevant changes, in particular those relating to authorized equipment;

• To the maintenance of the assumptions and conditions verified at the date of recognition of the benefit.

As regards the Road Service Contribution (CSR), created by Law no. 55/2007, of 31 August, which, according to the provisions of article 1, aims to finance the national road network under the responsibility of E..., E.P.E., and also determines the conditions for its application, constitutes the counterpart for the use of the national road network, as is verified by the consumption of fuels (no. 1 of article 3).

And, pursuant to nos. 1 and 2 of article 4 of Law no. 55/2007, the CSR "is levied on petrol and roadway diesel subject to the tax on petroleum products and energy (ISP) and not exempted from it", and its value varies depending on the petroleum product used (petrol or roadway diesel).

Article 5, no. 1 of the same enactment provides that CSR is due by the taxable persons of the tax on petroleum products and energy and, notwithstanding that it constitutes revenue for E... (article 6), its assessment and collection is the responsibility of the Directorate-General for Customs and Special Consumption Taxes (now AT), applying to its assessment, collection and payment the provisions of the Code of Special Consumption Taxes.

The definition of "level of taxation" is provided for in no. 5 of article 88 of the CIEC, approved by Decree-Law no. 73/2010, of 21 June.

Thus, when no. 5 of article 93 of the CIEC, currently in force, provides that the owner is held responsible for the payment of the amount of tax resulting from the difference between the level of taxation applicable to roadway diesel and the rate applicable to coloured and marked diesel, this includes in this "level of taxation" not only ISP, but also the Road Service Contribution (CSR).

In these terms, CSR is, therefore, a tax due by the taxable persons of ISP which is levied on roadway diesel subject to non-exempt ISP.

Regarding the duty of reasoning, the AT contends that the administration's duty arises from the principle embodied in article 268 of the Constitution of the Portuguese Republic, adopted by article 152 of the CPA and 77 of the General Tax Law (LGT), with the CPA being applied, pursuant to no. 1 of article 2, to the procedure and administrative activity adopted in the exercise of public powers or specifically regulated by provisions of administrative law, with the LGT containing its own provisions, applicable to the procedure of a tax nature.

And, as regards the reasoning and effectiveness of the tax procedure, according to article 77 of the LGT, the decision of the procedure is always reasoned by means of a brief statement of the facts and legal grounds that motivated it, with reasoning being able to consist of mere declaration of agreement with the grounds of previous opinions, information or proposals, including those comprising the tax inspection report (no. 1).

Referring to no. 2 of the same article 77 of the LGT, the reasoning of tax acts may be carried out in summary form, and must always contain the applicable legal provisions, the qualification and quantification of tax facts and the operations for determining the taxable amount and the tax.

Based on the assessment being based on a procedure of an inspection nature, article 63 of the Complementary Regime of Tax Inspection and Customs Procedure (RCPITA) also regulates, as regards the reasoning of the decision, that tax acts or in tax matters that result from the report may be reasoned in its conclusions, through adherence or agreement with these, with in all cases the entity competent for its performance to reason the divergence from the conclusions of the report (no. 1).

In any event, if the Claimant understood, as it states, that the reasoning was deficient, it could, according to the AT, have requested the notification of the omitted requirements or the issuance of a certified copy containing them, free of any payment, under article 37 of the Code of Tax Procedure and Process (CPPT), which it did not do.

The facts and legal grounds contained in the notification of the assessment, according to the AT, are entirely perceptible to the normal recipient, so much so that the taxable person impugned it by invoking issues of law related to the interpretation of the applicable legal rules.

Not constituting, any possible error in the calculation of compensatory interest, an omission of essential formality that determines the annulment of the act, which, according to information from the Customs Authority, will, in fact, have occurred.

As for the alleged divergence of ISP and CRS values, between those determined in the inspection action report and those contained in the assessment, the AT alleges that it does not understand the alleged divergences, since throughout the inspection action report, particularly in chapter VI-Demonstration of the Amounts of Debt Determined, the ISP determined (€ 6,771.27) corresponds exactly to the tax assessed.

Regarding what is stated in article 20 of the Initial Petition, the AT states that, both in the draft report and in the final report, express reference is made to the fact that the usual supplier of the defendant is the company D..., SA, and not any other, with the further addition that the internal order number, which is mentioned (OI2016...), certainly by mistake, does not exist associated with any inspection action carried out by the Customs Delegation of ... .

The reasoning, even if made by reference or in summary form, was clear, congruent and contemplated the factual and legal aspects that allow knowledge of the cognitive and evaluative route pursued by the tax administration for the determination of the act, according to the position of the AT.

Concluding that the AT, contrary to what is alleged, the tax assessment act, and the compensatory interest, are properly reasoned, with no obscurity and/or contradiction preventing the Claimant from assessing whether it should comply with such assessments, or whether, instead, it should impugn them, as it did, demonstrating that it grasped its content.

On the other hand, the Respondent contends that the Claimant's interpretation is somewhat confused and contradictory of the CIEC rules invoked, since the Claimant supports its position on the same rules on which the AT bases the assessment of ISP, while also drawing from arbitral case law conclusions that cannot be drawn for the case at hand.

The AT raising that we are dealing with indirect taxes, on consumption, whose regime, enshrined in the CIEC, derives from Community legislation, being harmonized throughout the European Union.

The CIEC transposed into domestic law the horizontal Directive no. 2008/118/EC, of the Council, of 16 December (which repealed Directive 92/12/EEC, of the Council, of 25 February), relating to the general regime of special consumption taxes, and the vertical directives relating to all SEC – Tax on Alcohol and Alcoholic Beverages, Tax on Petroleum Products and Energy and Tax on Tobacco.

The Community regulations relating to SEC still apply in domestic law, which, as is known, apply directly in the national legal order.

Making it imperative, according to the AT, as regards the interpretation of the regime enshrined in the CIEC, to go beyond the literal element and resort to systematic and teleological elements.

Despite the fact that there is no harmonization at the level of tax rates, it does exist at the level of the remaining regulation, and being at issue products highly permeable to fraud and tax evasion, control mechanisms are instituted, at national and throughout the European Union, to minimize and eliminate the risk of fraud, arising, in particular, from taxation at destination and the elimination of intra-Community borders.

Reasons by which, at the level of the European Union, measures are found, according to the AT, to combat fraud and tax evasion, to be applied in all Member States, with a view to controlling the products subject to SEC, following, in this respect, the European guidelines issued by the European Anti-Fraud Office (OLAF) and the principles enshrined in the Treaty on the Functioning of the European Union.

According to the AT, under the horizontal Directive (article 39) Member States may require the use of tax marks, having these as its function, precisely, the control of the use and commercialization of certain types of products, which occurs at national level, with the denaturalization of alcohol and the marking of petroleum products, which benefit from exemptions or reduced rates provided they are used for certain purposes, as results from the sectoral directives nos. 92/83/CEE, of the Council, of 19 October, (relating to the harmonization of the structure of special taxes on the consumption of alcohol and alcoholic beverages) and nos. 2003/96/CE, of the Council, of 27 October, (which restructures the Community framework for the taxation of energy products and electricity), being further relevant, as regards the marking of petroleum products, Directive 95/60/CE, of the Council, of 27 November and, for alcohol, Regulation 3199/93, of the Commission, of 22 November, relating to the processes of recognition of alcohol denaturalization for purposes of exemption.

In this way, regarding the tax benefit in question in the proceedings, the addition of a dye and marker takes on the nature of a tax mark instituted at national level in the CIEC and ordinances, have precisely as their scope the prevention of fraud and tax evasion, designed to ensure that the product in question is effectively used for the purposes envisaged by the rule, given that, despite being coloured and marked, diesel can continue to be used like any other fuel (unmarked diesel), thus providing tax advantages that contradict the purpose and intention envisaged by the legislator, both Community and national.

There is no doubt, according to the AT, that the fact of diesel being coloured and marked has as its objective the effective tax control of its use, with the grant of the tax advantage associated with it depending on compliance with the rules instituted for its commercialization and use.

Should, therefore, the rules in question be interpreted in this context, with reference to the SEC system and the purpose envisaged by the legislator, both Community and national.

Concluding, thus, that what is sought by the Claimant when it states that the failure to issue an invoice or equivalent document could, at most, make its author incur in administrative liability, makes no sense whatsoever.

Up until, according to the AT, the rule contained in no. 6 of article 93, by establishing that the sale, acquisition or consumption of the products referred to in no. 1 in breach of the provisions of nos. 2 to 5 are subject to the sanctions provided for in the General Regime of Tax Violations and in special legislation, would be completely unnecessary.

This is because criminal or administrative responsibility in the context of tax and customs violations, on the one hand, and the subjective incidence and tax responsibility (and respective exigibility of tax) in the context of ISP, on the other, are subject to different assumptions, being framed by norms of national source (legal and constitutional) and distinct Community sources, and in the case of irregularities, the facts may give rise to criminal or administrative responsibility, with or without establishment of tax debt, in the same way that tax debt can be established without meeting the assumptions of criminal or administrative responsibility in the sphere of debtors, with the need to analyze them autonomously.

The AT concludes that no. 5 of article 93 of the CIEC establishes an objective fiscal responsibility, for those responsible for the operation of fuel supply stations, who are bound by compliance with the regulatory provisions provided for the supplying of coloured and marked diesel, becoming directly responsible for the payment of the difference in ISP in cases where, in carrying out supplies, they do not comply with the provisions that oblige the mandatory use of electronic cards in all supplies carried out, with this measure intended to prevent situations of supplying coloured and marked diesel by persons who legally could not acquire the product, given that they are not holders of the respective electronic cards.

And it was precisely to reinforce such understanding, relating to the tax responsibility of those legally responsible for coloured and marked diesel sales outlets, that the wording of no. 5 of article 93 of the CIEC was altered, reinforcing, according to the AT, the effectiveness of the control system by allowing the cross-referencing of information relating to quantities of GCM sold by the fuel supply station and acquired by the beneficiary with a reduced rate.

And, according to the AT, without identification of the beneficiary, holder of the card, which is personal and non-transferable, it would not be possible to conclude, solely through registration in the electronic system, that the quantities in question are effectively supplied to the true beneficiary.

Thus, contrary to what is alleged, the AT does not allege to disregard the records of the electronic system, on the contrary, only with the analysis and cross-referencing of this information with the information contained in the invoices is it possible to assess the allocation of the benefit to the beneficiary, holder of the card instituted for purposes of allocation to the destinations indicated in no. 3 of article 93 of the CIEC.

And neither does the statement of the Claimant have any sense, according to the AT, embodied in article 49 of the initial pleading, because it would simply remove any utility, for purposes of control, from the issuance of invoices with identification of the beneficiary holder.

And, as results from the letter of the law, through the use of the expression "as well as", it is required, to assess the regularity of the sale/supply of GCM, that, in addition to the recording, invoices corresponding to the sale be equally issued, with identification of the purchaser, holder of the benefit.

On the other hand, the thesis alleged by the Claimant of the existence of a "hypothetical rule of incidence" overshadows, according to the AT, that, in the SEC regime, by virtue of the provisions of article 7 of the CIEC, the taxable event is constituted by production, importation and entry into national territory of products subject to the objective incidence of tax (article 5), facts which occur before the commercialization of products, which, in cases of exemption or reduced rate, are, as a rule, when the tax-exempt destinations are known, subject to introduction into consumption through a tax-exempt introduction into consumption declaration (DIC).

And, where there is cessation or breach of the assumptions of a tax benefit, the tax is exigible, by virtue of article 8, at the moment of its verification, which occurs, in particular, when an irregularity is found in the use of products subject to a reduced rate in accordance with the terms defined in no. 5 of article 93.

This is because only those who, demonstrably, use petroleum products, in this case GCM, in the activities and equipment provided for in no. 3 of article 93, can benefit from the application of a reduced rate, which is nothing subjective.

And the word "demonstrably", the AT concludes, also presents no doubts as to its meaning, concluding that, to be a beneficiary of the exemption or reduced rate, for purposes of recognition of the tax benefit, must demonstrate the verification of the respective assumptions, in particular that the product in question is used in the activities referred to in the law.

From this it follows that the control of the benefit is carried out in two aspects, in a prior moment to verify the assumptions and conditions of the tax benefit, and subsequently, with the violation of those assumptions and conditions determining the revocation of the benefit, as well as, in accordance with what is established in article 14 of the Statute of Tax Benefits, the restoration of the standard taxation.

Thus, in the case of the reduced rate of ISP provided for in article 93 of the CIEC, given that GCM, given the characteristics of the product, is intended to be used for certain purposes, by beneficiaries holding an electronic card obtained in accordance with the procedures instituted by law, it only benefits from the rate reduction in gasoline sold under the terms defined.

And, in accordance with the system instituted for control of the tax benefit, in the specific situation referred to in no. 5 of article 93, the owner/legal responsible is, according to the AT, responsible for the GCM held at the sales outlet, as regards quantities that are not properly recorded as sales in the computer system, in the wording prior to Law no. 82-B/2014, and also, after the entry into force of this enactment, as regards quantities that were not the subject of issuance of invoices in the name of the cardholder.

Regarding the principle of contributive capacity raised by the Claimant, the AT invokes that, in this case, we are dealing with indirect taxes, levied on consumption, so that, although, such principle, applies to direct taxes, on income and on property, the same will not be said as regards taxes on consumption, which, in accordance with article 2 of the CIEC, obey the principle of equivalence, seeking to burden taxpayers to the extent of the costs they cause in the fields of environment and public health, in realization of a general rule of tax equality.

The Claimant defends the non-existence of the assumptions on which the tax responsibility in question depends on the basis of the sanctionary nature of the rule, but, as to this question, the AT reiterates what was said regarding the nature of such responsibility, enshrined in no. 5 of article 93, which, as defended by doctrine and case law, is an objective fiscal responsibility.

Effectively with the alteration of the wording of no. 5 of article 93 of the CIEC, the law went on to expressly provide for the responsibility of the owner or legal person responsible for operating authorized stations for public sale, in relation to quantities that they will sell and that are not properly recorded in the electronic control system, as well as in relation to quantities for which the corresponding invoices are not issued in the name of the cardholder, resulting clear the meaning of the rule also as to this obligation of issuance of a properly issued invoice by the seller to the beneficiary, holder of the card.

Also covered are all situations in which in the invoices the respective access cardholders are not identified, associated with the benefit, and in which purchasers without right to the benefit are identified, that is, without an access card.

In the case at hand and as a result of the inspection action carried out, the AT concluded that, during the years 2013 and 2015, GCM was sold that was not recorded in the computer system, as required in the aforementioned no. 5 of article 93 of the CIEC, in force at the time, which the Claimant appears not to refute, not impugning the assessment in this respect.

While, on the other hand, impugning the situations determined relating to the issuance, in 2015 and 2016, of commercial documents without identification of the respective purchasers, and in 2015, of commercial documents with identification of purchasers not holding an access card.

Now, the law requires, according to the AT, the obligation of identification of the beneficiary purchasers in the invoices, as the sale of GCM exclusively to those who are beneficiaries, that is, who are holders of the card that proves the right to the tax benefit, since, both the lack of registration and the sale to non-beneficiaries, can configure a deviation from the tax-exempt purpose.

Situations of non-compliance with the obligations inherent to the enjoyment of the benefit violate, according to the AT, not only what is established in article 93 of the CIEC, which provides in its no. 5 that coloured and marked diesel can only be acquired by holders of the electronic card instituted for purposes of control of its allocation to the destinations referred to in no. 3, but also conflicts with the provisions of Ordinances nos. 117-A/2008, which establishes in its no. 5 that the tax benefits realized through the use of coloured and marked diesel are carried out necessarily through the use of a microchip card, and with the provisions of no. 5 of Ordinance no. 361-A/2008, which establishes that coloured and marked diesel can only be sold at fuel supply stations to beneficiaries of an exemption or reduction in ISP rate who are holders of microchip cards issued for this purpose by the DGADR.

And by issuing invoices without identification of the respective purchasers, it is not possible to control whether the GCM was used by a purchaser who was not recognized as a beneficiary or whether it was used for another purpose or, still, whether it was used in unauthorized equipment.

Concomitantly, by selling GCM to purchasers not holding an access card, the owner of the fuel supply station sold GCM to a purchaser without right to the benefit, with clear circumvention of the control system instituted according to the position of the AT.

GCM is a product with a tax benefit (rate reduction), only being able, according to the AT's interpretation, to be used by the equipment taxatively fixed by law, with both the sale and the use of gasoline being required to be recorded in an electronic terminal by means of the use of a microchip card assigned for this purpose to the respective beneficiaries, after the legal assumptions for the enjoyment of the benefit in question have been met.

Now, selling GCM without recording it in the computer system, and selling GCM with the issuance of an invoice to a final consumer, without identification of the holder of the electronic card, in both situations it is not possible to know whether the product was sold to a holder of the benefit; and equally, selling GCM to purchasers not holding an access card, therefore, taxable persons who are not beneficiaries of the exemption, all of them are situations that configure breaches of that legal provision.

Being, therefore, according to the AT, to be considered that there is a breach of the assumptions of the regime for use of GCM with the benefit of a reduced rate, always when it is demonstrated that one of the referred situations has not occurred, and not solely a mere administrative violation on the grounds that the State has not been defrauded in terms of tax collection.

It appears, according to the AT, to raise no doubt whatsoever that, with the State ceasing to collect tax because the product in question is being consumed by those who do not have the right to the benefit, there is, undoubtedly, harm to the State, in that it ceases to collect revenue that would be due to it if the product were taxed at the normal rate.

That is, it is only when it is proved that all sales of GCM were made to taxable persons with the right to acquire it, that is, with right to the tax benefit, that no harm to the tax revenue is verified, which manifestly did not happen in the case of the proceedings, so that, for the Respondent, the responsibility provided for in no. 5 of article 93 of the CIEC occurs whenever those sales are not "properly" recorded, covering situations of irregularity relating to quantities for which the corresponding invoices are not issued in the name of the cardholder, and as also provides the aforementioned Ordinance no. 361-A/2008 (which establishes the rules for the commercialization of coloured and marked diesel and the respective control mechanisms), in its no. 6, "Sales referred to in the preceding number are necessarily recorded in POS terminals at the moment they occur."

And, given that, constituting the tax benefits "measures of an exceptional character instituted for the protection of relevant extrafiscal public interests that are superior to those of taxation itself which prevent", as provided for in the Statute of Tax Benefits, in no. 1 of article 2, only compliance with the instituted rules permits the derogation of the application of standard taxation.

From all this, the Respondent concludes that B... sold GCM without the corresponding registration in the computer system used for this purpose, during the years 2013 and 2015; that it issued invoices, in 2015 and 2016, without identification of the respective purchasers; and that it issued, in 2015, invoices with identification of purchasers not holding an access card, embodying, such behaviors, on the part of the now Claimant, a breach of the control regime provided for the commercialization of GCM provided for in no. 5 of article 93 of the CIEC and regulatory legislation.

Concluding that, in these terms, and as results from paragraph h), of no. 2, of article 4 (Subjective Incidence) of the CIEC, the company B... is also a taxable person, being responsible for the payment of ISP, resulting from the difference between the level of taxation applicable to roadway diesel and the rate applicable to coloured and marked diesel in relation to quantities that it sold and that were not properly recorded, in the POS terminals, as well as regarding quantities for which the corresponding invoices were not issued in the name of the cardholder.

From the above, it concludes for the lack of merit of the request.

Sanation:

The Claimant raised the issue of legitimacy, a matter of exception on which the Respondent did not take a position.

As regards this procedural requirement, we consider that the existence of joint and several liability between the company and the Claimant, pursuant to article 147, no. 2 of the CSC "Tax debts not yet exigible at the date of dissolution do not impede distribution in accordance with the preceding number, but for such debts all shareholders remain unlimited and jointly and severally liable, although they reserve, in any form, the amounts they deem necessary for their payment".

Joint and several liability is thus established and, in accordance, a voluntary passive joinder is established, the Claimant being the passive subject of the legal relationship, jointly and severally established with the commercial company, has a direct interest in the action.

In this way, its legitimacy and standing to sue are verified, as configured in articles 30 and 32 of the CPC and 517 of the CC.

Given the above, the parties have legal personality and capacity, are legitimate and are represented, pursuant to articles 4 and 10 of the LFRM and 1 of Ordinance no. 112-A/2011, of 22 March.

No nullities or other preliminary issues affecting the entire proceeding are verified, so it is now necessary to rule on the merits of the request.

Factual Matter:

Proven Facts:

It is incumbent upon the tribunal to select the facts that matter for the decision of the case and to discriminate proven from unproven matters (in accordance with article 123, no. 2 of the CPPT and article 607, no. 3 of the CPC, applicable ex vi article 29, no. 1, paragraphs a) and e) of the LFRM).

Thus, the facts relevant to the judgment of the case are chosen and delineated based on their legal relevance, which is established in consideration of the various plausible solutions to the legal question(s) (in accordance with the former article 511, no. 1 of the CPC, corresponding to the current article 596, applicable ex vi article 29, no. 1, paragraph e) of the LFRM).

Thus, taking into account the positions assumed by the parties, the documentary evidence and the elements contained in the Administrative File joined to the proceedings, the following facts are considered proven, with relevance for the decision.

In the context of an inspection action, carried out under Service Order no. OI2016... of 08.11.2016, of the Customs Delegation of ..., control of the commercialization of coloured and marked diesel from that fuel supply station was carried out, taking into consideration the records made in TPA no. ..., installed at the PAC of ..., in the municipality of ..., for the period between the year 2013 and the year 2016, of the company B... .

In the context of the identified ANI, initiated on 10.11.2016, the analysis of commercial and accounting elements collected from the operator's accounting office and the relation of records made in the TPA used for this purpose, obtained from the General Directorate of Agriculture and Regional Development (DGADR), was carried out.

As a result of the comparison between actual sales and records made in TPA no. ..., it was verified that, in the years 2013 and 2015, 886,500 lt and 221,700 lt, respectively, of commercialized GCM were not recorded;

As a result of the analysis carried out on the sales data declared during the years 2015 and 2016, using as a criterion the identification of the customer in each of the sales documents issued, it was concluded:

• issuance of invoices in 2015 and 2016, corresponding to 16,038.380 lt and 3,398.360 lt, respectively, without identification of any customer and therefore without identification of any access cardholder;

• issuance of invoices in 2015 corresponding to 1,339.750 lt of GCM, with identification of customers not holding access cards.

The Claimant was notified, on 16.03.2017, of the draft report of the action to make a statement at the prior hearing, which it did, requesting payment of the penalty reduced by applying the provisions of article 29 of the RGIT.

On 16.03.2017 the Claimant was notified of the Final Report of the Inspection Action, pursuant to article 62 of the Complementary Regime of Tax Inspection Procedure.

As a result of the decision of 18.04.2017, of the Director of the Customs Authority of..., set forth in the Final Report of the ANI, the now Claimant was notified by Office no. ..., of 28.08.2017 to proceed with payment of the debt determined in the total amount of 7,209.04 € corresponding to 4,386.08 € of ISP, 2,338.28 € of CRS tax, 46.91 € of withholding tax, 435.97 € of compensatory interest and 1.80 € of printed matter.

The Claimant made the payment on 08/09/2017.

No other facts with relevance for the decision of the case were proven, considering the possible legal solutions.

Basis for the Proven and Unproven Factual Matter:

The conviction regarding the facts resulted from the submissions of the parties and their respective documentary support in the proceedings.

Legal Matters – Issues to be Decided:

Object and Scope of the Present Proceeding:

The issues to be decided in the present proceedings are to determine:

Whether the assessment act in question in the proceedings is voidable due to a defect of form in that its reasoning is obscure and deficient, which amounts to a lack of reasoning?

Based on the facts described, regarding the legality of the assessment of ISP, CSR, withholding tax and compensatory interest, in relation to the sale of coloured and marked diesel carried out in breach of the rules for commercialization of this product, but only as regards the years 2015 and 2016, and in reference to sales without issuance of a nominative invoice issued to the holder of the microchip card, that is, as regards sales invoiced to "final consumer", of 16,038.380 lt and 3,398.360 lt, respectively and, in relation to the year 2015, in reference to sales of quantities invoiced with identification of a customer not holding an access card, of 1,339.750 lt?

It is necessary to decide:

Regarding the Lack of Reasoning:

The obligation of reasoning of acts, as a constitutional and legal requirement, which the Respondent does not deny.

According to article 77 of the LGT, as supported by the Respondent, "the decision of the procedure is always reasoned by means of a brief statement of the facts and legal grounds that motivated it, with reasoning being able to consist of mere declaration of agreement with the grounds of previous opinions, information or proposals, including those comprising the tax inspection report (no. 1)".

"Referring to no. 2 of the same article 77 of the LGT, the reasoning of tax acts may be carried out in summary form, and must always contain the applicable legal provisions, the qualification and quantification of tax facts and the operations for determining the taxable amount and the tax".

As the Respondent alleges, "with the assessment being based on a procedure of an inspection nature, article 63 of the Complementary Regime of Tax Inspection and Customs Procedure (RCPITA) also regulates, regarding the reasoning of the decision, that tax acts or in tax matters that result from the report may be reasoned in its conclusions, through adherence or agreement with these, with in all cases the entity competent for its performance to reason the divergence from the conclusions of the report (no. 1)".

By the factuality described and by the exercise of legal subsumption, the duty of reasoning was, in fact, fulfilled, being the description clear and perceptible, and, so much so was it that the Claimant had no obstacle whatsoever to the exercise of its right to be heard, impugning and invoking issues of fact and of law related to the interpretation of the applicable legal rules.

Being that errors in the calculation of compensatory interest do not constitute an omission of essential formality that determines the annulment of the act.

Thus, it is concluded that the act does not suffer from lack of reasoning, even if made by reference or in summary form, as it is clear, congruent and contemplated the factual and legal aspects, which the Claimant grasped in full and, accordingly, exercised its right to be heard without any obstacle to its defense.

Regarding the Legality of the Assessment of ISP, CSR, Withholding Tax and Compensatory Interest:

Considering the Claimant's position, and even though it petitions for annulment of the tax act, in fact it only partially impugns it as regards this question, limiting itself, thus, the cause of action to the matter relating to the years 2015 and 2016 as specified above.

On this matter, we uphold the position defended by the Respondent and in accordance with what was already decided within the scope of the CAAD proceeding no. 557/2017-T (at www.caad.pt).

As regards the requirement of the issuance of an invoice in the name of the cardholder, pursuant to article 93, no. 5 of the CIEC, in the wording introduced by Law 82-B/2014 applicable to the situation sub judice, relating to facts relating to the years 2015 and 2016.

Pursuant to the aforementioned provision:

"5 - Coloured and marked diesel may only be acquired by holders of the electronic card instituted for purposes of control of its allocation to the destinations referred to in no. 3, with the owner or legal person responsible for operating authorized stations for public sale being responsible for the payment of the amount of tax resulting from the difference between the level of taxation applicable to roadway diesel and the rate applicable to coloured and marked diesel, in relation to quantities that they will sell and that are not properly recorded in the electronic control system, as well as in relation to quantities for which the corresponding invoices are not issued with identification of the cardholder's tax identification."

Indeed, as the recording in the electronic control system is not a formality nor a document of a commercial nature, its confrontation with the corresponding commercial document – the invoice in the name of the cardholder - appears essential for purposes of controlling the allocation of the product, to verify whether the sale was actually registered through the purchaser's card, with the requirements being cumulative.

We understand that the requirement for issuance of an invoice in the name of the cardholder, pursuant to article 93, no. 5 of the CIEC, does not constitute a purely formal requirement that should only sustain an SEC assessment when associated with the existence of harm to the tax revenue.

Constituting, rather, a cause of responsibility of the owner or legal person responsible for operating authorized stations for public sale, for the payment of the relevant SEC.

Thus, and as the Respondent concludes, non-compliance with the obligation to issue an invoice in the name of the cardholder through which the litres sold were recorded, makes the control of the allocation of the product to entitled entities impossible and prevents the confirmation that GCM was sold to the holder of the card used in the recording, thus removing the tax benefit.

Since, as fuels may be subject to transmission at a reduced rate, as is the case with diesel intended to be used in agricultural activities, fishing, rail transport and other uses expressly provided for in article 93 of the SEC Code, it is essential to ensure, as results from the aforementioned decision, that this fuel is only used "(...) for the purposes that justify the granting of the tax benefit, and to prevent situations of fraud and evasion, diesel supplied to users at the reduced ISP rate bears a specific colour and a specific tax mark", in accordance with Directive 95/60/EC, of the Council, of 6 December, Ordinance no. 1509/2002, of 17 December and Commission Implementing Decision no. 2011/544/EU, of 16 September 2011 - replaced by Commission Implementing Decision (EU) 2017/74, of 25 November 2016, currently in force - relating to a common tax marker for diesel, as raised by the Respondent.

In addition to the colour, marking and limitations as to its use, and in the wake of decision 557/2017-T of the CAAD in question "(...) the commercialization of the product in question is subordinated to a set of conditions established, not only in that article 93 of the CIEC, but also in Ordinance no. 117-A/2008 of 8/02, and, in particular, in Ordinance no. 361-A/2008, of 12/05", in force.

Pursuant to Ordinance no. 361-A/2008, of 12 May:

"2. Coloured and marked diesel is a conditionally sold product, whose availability on the national market may only be carried out by petroleum companies that have entered into a contract with the State, represented by the Directorate-General of Agriculture and Rural Development (DGADR), for this purpose, in which they undertake to make available the public sale of coloured and marked diesel, in the proportion of at least one supply point for every 600 000 liters sold.

1. Coloured and marked diesel may only be supplied or sold to holders of properly licensed fuel supply stations who are holders of point of sale (POS) terminals.

2. The provision of the preceding number applies to distributors, provided they also have