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Europe's top court sends alumina aid case back to lower court

The European flag flies outside of the La Canada shopping centre in Marbella, southern Spain January 23, 2013. REUTERS/Jon Nazca

BRUSSELS (Reuters) - Europe's highest court on Tuesday told a lower court to re-examine a long-running dispute between France, Italy and Ireland and EU competition regulators over whether millions of euros in state aid granted to the alumina sector was legal.

The European Commission, the EU executive in charge of ensuring a level playing field in the 28-country European Union, in its 2005 finding said tax exemptions given by the three authorities to the industry distorted the market.

Mineral oil used for producing alumina, used in aluminum manufacture, would normally be subject to excise duty, but has been exempt from the charge in Ireland since 1983, in Italy since 1993 and in France since 1997.

The case later went to the General Court, Europe's second-highest, which overturned the Commission's decision twice. The EU competition watchdog subsequently appealed to the Luxembourg-based EU Court of Justice (ECJ).

The ECJ said it could not rule "since the General Court examined only some of a number of pleas in law put forward by the parties" and referred the case back to the lower court.

The General Court will now rule on the case for the third time. Its verdicts can be appealed at the ECJ.

Although European governments can make grants of state aid when they see fit, the Commission has the final say on whether the public support conforms with EU competition rules, the ECJ said.

(Reporting by Michele Sinner, writing by Barbara Lewis and Foo Yun-chee; editing by Keiron Henderson)