Judgment — ECLI:EU:T:2026:303
Date: 2026-04-29
Language of the case: German

Summary T-194/25 – 1 
Case T-194/25 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
5 March 2025 
Referring court: 
Bundesfinanzhof (Germany) 
Date of the decision to refer: 
17 September 2024 
Defendant and appellant on a point of law: 
Hauptzollamt A 
Applicant and respondent in the appeal on a point of law: 
Scrap-Transporteur 
  
Subject matter of the main proceedings 
Proceedings pending at last instance (appeal on a point of law) before the 
Bundesfinanzhof (Federal Fiscal Court, Germany) in which the Zollverwaltung 
(German customs authority) opposes a judgment of the Finanzgericht (Finance 
Court, Germany) upholding an action brought against a notice of additional 
assessment for tobacco tax 
Subject matter and legal basis of the request 
Interpretation of EU law (excise duty on manufactured tobacco, concept of 
smoking tobacco) under Article 267 TFEU 
Questions referred for a preliminary ruling 
1. Is the concept ‘tobacco which … is capable of being smoked’ in 
Article 5(1)(a) of [Council Directive 2011/64/EU of 21 June 2011 on the structure 
and rates of excise duty applied to manufactured tobacco] to be interpreted as 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE T-194/25 
 
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meaning that such capability exists only in the case of products which, in 
accordance with public perception, are smoked? 
2. Is the concept ‘without further industrial processing’ in Article 5(1)(a) of 
Directive 2011/64 to be interpreted as also including more complex methods 
which consumers can use at home? 
Provisions of European Union law relied on 
– Council Directive 2011/64/EU of 21 June 2011 on the structure and rates of 
excise duty applied to manufactured tobacco (OJ 2011 L 176, p. 24): 
recitals 2 and 8, Articles 2 to 5, in particular 
‘Article 5 
(1) For the purposes of this Directive smoking tobacco shall mean: 
(a) tobacco which has been cut or otherwise split, twisted or pressed into 
blocks and is capable of being smoked without further industrial 
processing; 
(b) tobacco refuse put up for retail sale which does not fall under Article 3 
and Article 4(1) and which can be smoked. For the purpose of this 
Article, tobacco refuse shall be deemed to be remnants of tobacco 
leaves and by-products obtained from tobacco processing or the 
manufacture of tobacco products. 
…’ 
– Explanatory Notes to the Combined Nomenclature of the European Union, 
Publication made in accordance with Article 9(1) of Council Regulation 
(EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature 
and on the Common Customs Tariff (OJ 2019 C 119, p. 1, ‘the Explanatory 
Notes to the CN’): on headings 2401 and 2403 
– Council Directive 2003/96/EC of 27 October 2003 restructuring the 
Community framework for the taxation of energy products and electricity 
(OJ 2003 L 283, p. 51): Article 2(3) 
– Council Directive 95/59/EC of 27 November 1995 on taxes other than 
turnover taxes which affect the consumption of manufactured tobacco (OJ 
1995 L 291, p. 40): Article 4(1)(b) and (c) 
Case-law of the Courts of the European Union relied on 
– Judgment of the Court of Justice of 14 March 2024, f6 Cigarettenfabrik 
(C-336/22, EU:C:2024:226) 
SCRAP-TRANSPORTEUR 
 
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– Judgment of the Court of Justice of 9 June 2022, IMPERIAL TOBACCO 
BULGARIA (C-55/21, EU:C:2022:459) 
– Judgment of the Court of Justice of 16 September 2020, Skonis ir kvapas 
(C-674/19, EU:C:2020:710) 
– Judgment of the Court of Justice of 6 April 2017, Eko-Tabak (C-638/15, 
EU:C:2017:277) 
– Judgment of the Court of 10 November 2005, Commission v Germany 
(C-197/04, EU:C:2005:672) 
Provisions of national law relied on 
– Tabaksteuergesetz (Law on tobacco tax) of 15 July 2009 (BGBl. I p. 1870) 
as amended by the Fifth Law amending the laws on excise duty of 
21 December 2010 (BGBl. I p. 2221) ‘the Law on tobacco tax’: 
‘Paragraph 1 Tax territory, subject matter of the tax 
(1) Manufactured tobacco shall be subject to tobacco tax within the tax 
territory. The tax territory shall be the territory of the Federal Republic of 
Germany, not including the area of Büsingen and the island of Helgoland. 
Tobacco tax is a tax on consumption within the meaning of the 
Abgabenordnung [(Tax Code, ‘the Tax Code’)]. 
(2) Manufactured tobacco shall mean 
1. cigars or cigarillos … 
2. cigarettes: 
… 
(b) rolls of tobacco which, by simple non-industrial handling, are 
inserted into cigarette-paper tubes, or 
(c) rolls of tobacco which, by simple non-industrial handling, are 
wrapped in cigarette paper; 
3. smoking tobacco (fine-cut tobacco or pipe tobacco): tobacco which has 
been cut or otherwise split, twisted or pressed into blocks and is 
capable of being smoked without further industrial processing. 
… 
(4) Tobacco refuse shall be smoking tobacco if it can be smoked and is put 
up for retail sale and does not constitute cigars or cigarillos within the 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE T-194/25 
 
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meaning of point 1 of subparagraph (2) or cigarettes within the meaning of 
point 2 of subparagraph (2). For the purposes of this paragraph, tobacco 
refuse shall mean remnants of tobacco leaves and by-products obtained from 
the processing of tobacco or from the manufacture, treatment or processing 
of tobacco products. 
…’ 
Case-law of national courts relied on 
– Judgment of the Bundesgerichtshof (Federal Court of Justice, Germany) of 
1 April 2020 – 1 StR 5/20 
Succinct presentation of the facts and procedure in the main proceedings 
1 1 225 kg of scraps of the flue-cured Virginia tobacco variety with an average 
water content of 6.9% were seized from the applicant and respondent in the appeal 
on a point of law (‘the applicant’). Scraps are smaller pieces of leaves that are a 
by-product of threshing raw tobacco. 
2 The seized scraps were intended for an undertaking that planned to manufacture 
water-pipe tobacco from them. 
3 There are also instructions on the internet for the manufacture of water-pipe 
tobacco from scraps using household items. 
4 The defendant and appellant on a point of law (‘the German customs authority’) 
initiated an investigation procedure for tax evasion against the applicant. It found 
that the scraps seized were not a common smoking blend in the tobacco industry. 
However, the scraps did not contain impurities, rough leaf veins or microparticles 
or dust particles that would prevent them being smoked, for example in a pipe or 
as filler for hand-rolled cigarettes. The size and irregular structure of the leaf parts 
do not preclude smoking either. However, the scraps could also be used as water-
pipe tobacco (filler tobacco). That would require further slight splitting, boiling 
with water, glycerine and sugar, and adding flavourings. Industrial treatment and 
processing is not necessary. The necessary steps could be taken by the final 
consumer himself or herself. The German customs authority therefore considered 
that the seized scraps constituted smoking tobacco within the meaning of point 3 
of Paragraph 1(2) of the Law on tobacco tax and imposed a tobacco tax on the 
applicant. 
5 The applicant filed an objection against the notice of the German customs 
authority and ultimately brought an action. 
6 The first-instance court upheld that action. It considered, on the basis of an expert 
opinion, that the scraps seized were not smoking tobacco within the meaning of 
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5 
point 3 of Paragraph 1(2) of the Law on tobacco tax, but raw tobacco. According 
to general custom, scraps are not capable of being smoked in a pipe, either directly 
or after simple non-industrial processing. 
7 The German customs authority brought an appeal on a point of law against that 
judgment before the referring court. 
The essential arguments of the parties in the main proceedings 
8 The applicant claims that the seized scraps are raw tobacco that can be processed 
into pipe tobacco, water-pipe tobacco, fine-cut tobacco or cigarette tobacco. 
According to the applicant, there would be no taxable item without such 
processing. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
9 In the present case, the decisive factor is whether the seized scraps are smoking 
tobacco within the meaning of point 3 of Paragraph 1(2) of the Law on tobacco 
tax. 
10 The Law on tobacco tax implements Directive 2011/64. Point 3 of Paragraph 1(2) 
of the Law on tobacco tax corresponds to Article 5(1)(a) of Directive 2011/64. 
The constituent elements of smoking tobacco have been reproduced verbatim. 
11 It is not disputed in the present case that the scraps seized are ‘otherwise split’ 
tobacco. The question arises, however, whether the tobacco ‘is capable of being 
smoked’ (the first question), and ‘without further industrial processing’ (the 
second question). 
The first question 
12 The referring court is inclined to the view that, in order to determine capability of 
being smoked – even if subjective factors are not alien to the law on excise duty 
(for example, Article 4(1) of Directive 2011/64 or Article 2(3) of Directive 
2003/96) – regard must be had not to the public perception but solely to 
objectively identifiable characteristics of the tobacco. 
13 According to the referring court, it is irrelevant in that regard that the tobacco has 
undergone an initial drying process and that it must subsequently be kept in 
controlled humidity (derogation from the judgment of the Federal Court of Justice 
of 1 April 2020 – 1 StR 5/20). 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE T-194/25 
 
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Legislative history 
14 Directive 2011/64 came into force on 1 January 2011. At that time, water pipes 
were not yet common in Europe. There was therefore hardly any use for scraps as 
smoking tobacco. Scraps were generally considered to be raw tobacco. 
15 Meanwhile, consumer habits have changed. When smoking a water pipe, it is not 
the enjoyment of the tobacco taste that is at the forefront, but the taste of the 
added flavourings. That is why the quality of the tobacco is subject to significantly 
lower requirements than for other types of consumption. 
16 In addition, such products have become more easily accessible on the internet and 
can be processed by final consumers themselves into a product capable of being 
smoked. 
Case-law of the Court of Justice of the European Union 
17 There is no clear definition of smoking tobacco (as opposed to raw tobacco) in the 
existing decisions of the Court of Justice of the European Union relating to 
Directive 2011/64. The decisions relate to each individual case. 
– The judgment in Eko-Tabac 
18 The Court of Justice of the European Union examined whether industrial 
processing had taken place. It therefore considered that the tobacco was not yet 
capable of being smoked without further processing. It did not rule on the question 
of when tobacco ‘is capable of being smoked’. It stated, however, that the 
definition of ‘smoking tobacco’ cannot be construed narrowly (paragraph 24). 
19 Since the judgment in Eko-Tabak, the German customs authority has proceeded 
on the basis that, in order to classify a tobacco product as smoking tobacco within 
the meaning of Article 5(1)(a) of Directive 2011/64, it is necessary to take as a 
basis not the intended further processing of the tobacco, but whether, when it is 
seized, the tobacco can be prepared for smoking by simple handling which, in 
essence, does not constitute industrial processing. 
– The judgment in Skonis ir kvapas 
20 The capability of being smoked was not in dispute in the present case and, from 
the point of view of the Court of Justice of the European Union, it was not 
problematic. 
Wording 
21 The referring court’s view that it is necessary to rely solely on objectively 
identifiable characteristics of the product is supported by the English version of 
that provision (‘capable of being smoked’). By contrast, according to the French 
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version (‘susceptible d’être fumé’) and German version (‘zum Rauchen eignet’), 
mere capability of being smoked does not appear to be sufficient. In everyday 
language, the expression ‘sich eignen’ means to possess properties or abilities 
required for a purpose or a function. That depends on the opinion of the majority 
concerned. 
Scheme 
– Article 4(1) of Directive 2011/64 
22 ‘Normal consumer expectations’ are mentioned only in Article 4(1) of Directive 
2011/64, but not in Article 5(1)(a) thereof. 
– Article 5(1)(b) of Directive 2011/64 
23 Directive 2011/64 makes a conscious distinction between tobacco (Article 5(1)(a)) 
and tobacco refuse (Article 5(1)(b)). In the case of higher-value tobacco, it is 
possible to omit from the outset the additional constituent element ‘put up for 
retail sale’. That supports the view that tobacco is to be classified as smoking 
tobacco under Article 5(1)(a) of Directive 2011/64 solely on the basis of objective 
criteria. 
24 Admittedly, that would mean that Article 5(1)(b) of Directive 2011/64 would 
apply only in cases where the tobacco cannot be processed into water-pipe 
tobacco. However, that would not remove the distinction between tobacco and 
tobacco refuse. The concept of ‘tobacco refuse’ is a distinct constituent element. 
– Customs tariff legislation 
25 Unlike in other areas of taxation on consumption, the taxable items in Directive 
2011/64 are not determined by reference to the tariff headings of the Combined 
Nomenclature (‘CN’). The Explanatory Notes to the CN are therefore not directly 
applicable to the legislation on tobacco taxation – which, moreover, also pursues 
other objectives. However, they provide guidance on the distinction between raw 
tobacco and smoking tobacco, especially since the corresponding provisions are 
almost identical. 
26 The Explanatory Notes to the CN provide for a ‘smoking test’ (Explanatory Note 
22.0 on heading 2403) to distinguish between unmanufactured tobacco (heading 
2401) and manufactured tobacco (heading 2403, ‘suitable for smoking’). Only the 
ignition and smoking are evaluated. The taste experience plays no role. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE T-194/25 
 
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Spirit and purpose 
– Health protection 
27 The spirit and purpose of Article 5(1)(a) of Directive 2011/64 is, inter alia, to 
ensure a high level of health protection (recital 2 of that directive). 
28 Accordingly, the tobacco tax is a manufacturing tax, levied on a final product to 
be consumed, and not on the raw material or intermediate products resulting from 
the production process. 
29 That militates in favour of a broad interpretation of the concept ‘capable of being 
smoked’. 
30 It is irrelevant whether the products concerned are tobacco products that are 
authorised by food legislation or particularly dangerous to health. Article 5(1)(a) 
of Directive 2011/64 does not impose any restrictions in that regard. 
– Harmonisation of taxation 
31 The spirit and purpose of Article 5(1)(a) of Directive 2011/64 is also to ensure the 
proper functioning of the internal market (recital 2 of that directive) and to ensure 
uniform and fair taxation (recital 8 of that directive). 
32 If the interpretation of the concept ‘capable of being smoked’ were based on the 
public perception, the attainment of that objective would be jeopardised. There 
could be differences between the Member States as regards the public perception. 
33 Moreover, subjective criteria, such as taste or tolerance, would make it impossible 
in practice to determine the taxable item clearly and as unequivocally as possible. 
The second question 
34 The referring court assumes that scraps are capable of being smoked ‘without 
further industrial processing’. 
35 The determining factor is not the processing envisaged in each individual case, but 
whether the final consumer could take the necessary steps at home. It is therefore 
also irrelevant what quantities are actually involved. What matters is whether the 
final consumer can imitate the manufacturing process for small quantities using 
household items. 
36 It is irrelevant, in that regard, whether the necessary steps can be carried out 
simply or easily. A multi-stage process may also constitute non-industrial 
processing. 
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37 The processing of tobacco according to instructions on the internet does not 
achieve the level of standardisation. 
Case-law of the Court of Justice of the European Union 
38 According to the case-law of the Court of Justice of the European Union, 
‘industrial processing’ refers to the transformation, usually on a large scale and by 
a standardised process, of raw materials into tangible goods. Standardisation 
means harmonising practices, types, dimensions or structures in order to create 
basic forms. However, the individual production of a product by a single 
consumer means that it is, in principle, no more possible to standardise 
manufacturing processes than it is to carry out large-scale processing (judgment in 
Eko-Tabak, paragraph 30). 
39 The Court of Justice of the European Union appears to base its decision on the 
fact that simple or straightforward handling is involved (judgment in Eko-Tabak, 
paragraph 31; judgment in Skonis ir kvapas, paragraph 39). 
40 In his Opinion in Eko-Tabak (C-638/15, EU:C:2016:962, point 39), Advocate 
General Wahl favoured a functional perspective: the transformation for their own 
consumption by smokers, who do not necessarily possess any prior skills in that 
regard, of tobacco into a product capable of being smoked, does not amount to 
industrial processing. 
Wording 
41 It follows from the wording of Article 5(1)(a) of Directive 2011/64 that, for the 
purpose of classifying smoking tobacco, regard must be had not only to the further 
processing envisaged in each individual case, but also to other possibilities of 
further processing. 
Scheme 
42 Unlike Article 3(1)(b) and (c) of Directive 2011/64 (as well as predecessor 
directives, for example Article 4(1)(b) and (c) of Directive 95/59), Article 5(1)(a) 
thereof does not refer to ‘simple non-industrial handling’, but merely to ‘without 
further industrial processing’. 
Spirit and purpose 
43 As regards the health protection referred to in Directive 2011/64 (see paragraph 27 
above), it is irrelevant that the methods which the final consumer must use at 
home in order to be able to smoke the tobacco are more complex than those which 
the Court of Justice of the European Union has hitherto described as simple.