Judgment;Summary — ECLI:EU:C:2023:492
Date: 2023-06-15
Language of the case: Bulgarian
Court formation: Tenth Chamber
Subject matter: Free movement of goods;Customs Union
Procedure: Reference for a preliminary ruling
Origin: Bulgaria

Summary C-292/22 – 1 
Case C-292/22 
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:  
4 May 2022  
Referring court:  
Administrativen sad Varna (Bulgaria)  
Date of the decision to refer:  
19 April 2022  
Appellant in the appeal on a point of law:  
Teritorialna direktsia Mitnitsa – Varna  
Respondent in the appeal on a point of law:  
NOVA TARGOVSKA KOMPANIA 2004 AD  
  
Subject matter of the main proceedings 
The proceedings were instituted by an appeal on a point of law brought by the 
Teritorialna direktsia Mitnitsa – Varna (Territorial Directorate of the Varna 
Customs Office) against the judgment of the Rayonen sad Devnya (District Court, 
Devnya) annulling a decision imposing an administrative penalty by the Direktor 
na Teritorialna direktsia ‘Severna Morska’ v Agentsia ‘Mitnitsi’ (Director of the 
‘Northern Black Sea Coast’ Territorial Directorate of the Customs Agency), 
imposing a fine on NOVA TARGOVSKA KOMPANIA 2004 AD for 
infringement of the Zakon za mitnitsite (Law on Customs). 
Subject matter and legal basis of the request 
The parties are in dispute concerning the tariff classification of a product declared 
as ‘palm fat MP 36-39’. The questions referred seek to ascertain: (1) whether that 
product constitutes ‘palm shortening’ for the purposes of heading 1517 of the 
Explanatory Notes to the Harmonized Commodity Description and Coding 
System; (2) whether the test methods applied by the Tsentralna mitnicheska 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-292/22 
 
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laboratoria (Central Customs Laboratory) to determine whether the product had 
undergone a texturation process are permissible; and (3) in the event that they had 
undergone a texturation process and constitute ‘palm shortening’, the Combined 
Nomenclature code under which the products are to be classified – under code 
1511, as declared at the time of importation, or under code 1517, as assumed by 
the customs authorities. 
Questions referred for a preliminary ruling 
1. According to what criteria must a product such as that in the main 
proceedings – namely refined, bleached and deodorised palm oil with the 
trade name PALM FAT MP 36-39, which has been ‘stirred, filtered, chilled, 
tempered and packaged’ in its technological production process using only 
physical processes which did not chemically modify it – be classified under 
heading 1511 or heading 1517 of Chapter 15 of the CN? 
2. What is the meaning of the term ‘texturation’, which has been used to 
describe the process by which the products referred to as ‘shortenings’ in the 
Explanatory Notes to the Harmonized Commodity Description and Coding 
System for heading 1517 are obtained? 
3. If ‘palm oil and its fractions, whether or not refined, but not chemically 
modified’ have undergone a ‘texturation’ process, is that sufficient reason to 
exclude classification of that product under heading 1511? 
4. In the absence of standards, methods, criteria and indicators established in 
the CN, the Explanatory Notes to the CN and the Explanatory Notes to the 
Harmonized System for the purpose of testing the consistency of palm oil 
and proving that it has been processed by means of ‘texturation’, is it 
permissible for the competent customs authorities independently to develop 
and apply analytical working methods – such as RAP 66, version 
02/17.11.2020, which was applied in the present case – in order to establish 
the texturation of fats by means of penetration, that method being based on 
the officially published method AOCS Cc 16-[60], for the purposes of the 
tariff classification of goods under heading 1511 or heading 1517? 
If that is not permissible, according to what standards, methods, criteria and 
indicators may the product be tested in order to establish that it has 
undergone a ‘texturation’ process, that is to say, that it constitutes ‘palm 
shortening’? 
5. Must 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, as amended by Commission 
Implementing Regulation (EU) 2018/1602 of 11 October 2018, be 
interpreted as meaning that products described as ‘shortenings’, which have 
been obtained from refined palm oil by means of texturation, are to be 
NOVA TARGOVSKA KOMPANIA 2004 
 
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classified under heading 1517 of that nomenclature and, in particular, under 
subheading 1517 90 99 thereof? 
International tariff classification 
International Convention on the Harmonized Commodity Description and Coding 
System, signed in Brussels on 14 June 1983 and the Protocol of Amendment 
thereto, signed on 24 June 1986, approved on behalf of the European Economic 
Community by Council Decision 87/369/EEC of 7 April 1987 
Explanatory Notes to the Harmonized Commodity Description and Coding 
System 
Explanatory Notes to the Combined Nomenclature 
Provisions of European Union law and case-law relied on 
Regulation (EU) No 952/2013 of the European Parliament and of the Council of 
9 October 2013 laying down the Union Customs Code – Articles 56 and 57 
Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical 
nomenclature and on the Common Customs Tariff – Articles 1 and 12 
Commission Implementing Regulation (EU) 2018/1602 of 11 October 2018 
amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and 
statistical nomenclature and on the Common Customs Tariff – [Annex I], Part I, 
Section I, A and [Part II,] Section III, Chapter 15, headings 1511 and 1517 
Judgment of 19 October 2017, Lutz, С-556/16, EU:C:2017:777, paragraph 40 
Judgment of 17 March 2016, Sonos Europe, С-84/15, EU:C:2016:184, 
paragraph 33 
Judgment of 18 May 2011, Delphi, С-423/10, EU:C:2011:315, paragraph 23 
Judgment of 12 May 2016, Toorank Productions, Joined Cases С-532/14 and С-
533/14, EU:C:2016:337, paragraphs 34 and 36 
Judgment of 28 July 2011, TDK-Lambda Germany, С-559/18, EU:C:2019:667, 
paragraph 29 
Provisions of national law relied on 
Zakon za mitnitsite (Law on Customs) – Article 234. 
Zakon za administrativnite narushenia i nakazania (Law on administrative 
offences and administrative penalties) – Articles 59 and 63c. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-292/22 
 
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Administrativnoprotsesualen kodeks (Code of Administrative Procedure) – 
Article 217(1) and Article 223. 
Succinct presentation of the facts and procedure in the main proceedings 
1 On 8 April 2019, eight containers of goods arrived at Varna West Port Terminal, 
the consignee being NOVA TARGOVSKA KOMPANIA 2004 AD (‘the 
company’) and the exporter being Louis Dreyfus Company Asia Pte. Ltd, from 
Indonesia. The goods were declared as ‘palm fat MP 36-39 in CA20 – 20 kg net in 
cartons’. 
2 On 28 September 2020, five containers of goods arrived at the same port, once 
again from the same exporter and for the same consignee. The goods were 
declared as ‘palm fat MP 36-39, 5250 cartons of 20 kg net’. On the same day, a 
sample was taken from one of the containers to check the tariff classification of 
the goods. 
3 On 7 January 2021, the Central Customs Laboratory carried out an analysis on the 
sample taken, which showed that the goods were a plastic to solid mass of oil, 
with a homogeneous structure and a smooth and creamy texture, thermally stable, 
without disintegration. 
4 On the basis of the results obtained and the expert evaluation, it was concluded 
that, in accordance with the terms used in Chapter 15 of the Combined 
Nomenclature (‘the CN’), the sample tested constituted ‘palm shortening’ – a 
preparation consisting exclusively of palm oil or its fractions, not chemically 
modified and obtained by texturation, for use in various foodstuffs, such as 
doughs. 
5 The examination was carried out according to the laboratory’s own RAP 66 
method, which is based on the official AOCS Cc 16-[60] method developed by the 
American Oil Chemists’ Society (AOCS) for consistency tests using a 
penetrometer. 
6 The Direktor na direktsia ‘Mitnicheska deynost i metodologia’ (Director of the 
‘Customs Activities and Methodology’ Directorate) of the Tsentralno mitnichesko 
upravlenie (Central Customs Administration) takes the view that, given their 
established objective characteristics, the goods should be classified under CN 
code 1517 90 99. According to that view, the declared code from heading 1511 
was not correct, since that heading covered only palm oil and its fractions, 
whether or not refined, but not chemically modified. However, the goods under 
analysis were goods consisting of palm oil or its fractions which, in addition to 
refining, had undergone further irreversible processing to modify the crystalline 
structure, namely texturation – a process specifically and exclusively provided for 
in the Explanatory Notes to the Harmonized System for heading 1517 as a process 
that was permissible for goods of precisely that heading. 
NOVA TARGOVSKA KOMPANIA 2004 
 
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7 The customs authorities found that the goods declared on 8 April 2019 and 
28 September 2020 respectively were demonstrably identical, since they had the 
same name, exporter, manufacturer and composition, as evidenced by the attached 
certificates. In view of that, and on the basis of Article 190(1) of Regulation (EU) 
No 952/2013, the customs authorities proceeded on the assumption that the results 
of the laboratory analysis of 7 January 2021 were also valid as regards the goods 
declared on 8 April 2019. 
8 On 29 January 2021, the company challenged that opinion, but the customs 
authorities rejected its objection. They took the view that the company had 
committed customs fraud by classifying the goods under code 1511 90 99 00 
instead of code 1517 90 99 90 in its customs declaration of 8 April 2019, in order 
partly to avoid the payment of receivables of the State, governed by public law, 
totalling 17 895.95 leva (BGN). 
9 On 30 January 2021, a notice establishing an administrative offence was issued in 
respect of the company and, on 20 May 2021, a fine was imposed by a decision 
imposing an administrative penalty in the total amount of the receivables of the 
State that had been evaded. 
10 The company challenged the decision imposing an administrative penalty before 
the Rayonen sad Devnya (District Court, Devnya). The court annulled that 
decision by judgment of 3 December 2021. That court took the view that the 
customs authorities’ conclusion that the tariff classification was incorrect was 
unsubstantiated, since: (a) it was based on a laboratory analysis of goods imported 
and declared at a later date; (b) it was not specified where and how the sample 
tested had been stored; (c) it had not been demonstrated whether the laboratory 
methodology used complied with the US method for measuring the consistency of 
fats, AOCS Cc 16-60, and whether that methodology was sufficient to determine 
whether the product had undergone any ‘texturation’, and whether the 
methodology was even officially recognised; and (d) the customs authorities erred 
in relying on the Explanatory Notes to the Harmonized System to classify the 
product under heading 1517, since, according to settled case-law, those 
explanatory notes did not constitute a legislative act. 
11 An appeal against the judgment of the District Court, Devnya has been brought 
before the referring court. 
The essential arguments of the parties in the main proceedings 
12 The Teritorialna direktsia Mitnitsa – Varna (Territorial Directorate of the Varna 
Customs Office) claims that the conclusions drawn in the report of the customs 
laboratory and the laboratory’s internal methodology that was applied, which was 
based on the US method for testing consistency, AOCS Cc 16-60, unquestionably 
demonstrated that the sample tested had values typical of plastic fats, shortenings 
and margarines. Following destruction of the sample’s structure by means of 
melting (erasure of the crystallisation memory) and gradual cooling under static 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-292/22 
 
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conditions at a room temperature of 25°C, the consistency (texture) changed and 
did not return to its original form, thereby proving that the product had undergone 
final processing to modify the crystalline structure, or ‘texturation’, that is to say, 
that it constituted ‘palm shortening’ and, according to the Explanatory Notes to 
the Harmonized System, should be classified under heading 1517. 
13 By contrast, the company asserts that the product which it imported was pure palm 
oil which had been refined but not chemically modified in the course of the 
manufacturing process, with the result that it should be classified under heading 
1511. Since the product was not hydrogenated or chemically modified, it is not 
covered by heading 1517. In support of its assertions, the company submits a 
detailed presentation of the manufacturing process and a written statement from 
the manufacturer stating that the product is stirred, filtered, cooled, tempered and 
packaged exclusively by physical processes that do not chemically modify it. 
Succinct presentation of the reasoning in the request for a preliminary ruling 
14 In resolving the dispute, the referring court acts as a cassation court and rules on 
the merits of the case by a judgment which is not subject to appeal. 
15 According to the CN, heading 1511 covers palm oil and its fractions, whether or 
not refined, but not chemically modified, while heading 1517 covers margarine, 
edible mixtures or preparations of animal or vegetable fats or oils or of fractions 
of different fats or oils of Chapter 15, other than edible fats or oils or their 
fractions of heading No 1516. Since the Explanatory Notes to the Combined 
Nomenclature do not contain any explanations as to how the two headings are to 
be distinguished, the referring court seeks to ascertain the criteria according to 
which the product at issue is to be classified under one or the other heading. 
16 The company claims that the product should be classified under heading 1511 
since, in the course of the technological manufacturing process, it has been 
processed solely by physical processes which do not chemically modify it. 
17 The customs authorities do not dispute that the product had not been chemically 
modified – the report of the customs office’s laboratory expressly states that the 
iodine value and fatty acid content prove that the palm oil had not undergone any 
chemical treatment – hydrogenation. However, they submit that the palm oil had 
been texturised, that is to say, it had undergone further processing to modify its 
crystalline structure and achieve a homogeneous, smooth and creamy texture. For 
that reason, the customs authorities claim that the product should be classified 
under heading 1517. 
18 The term ‘texturation’ is used in the Explanatory Notes to the Harmonized System 
only in the description of the process for obtaining the products known as 
‘shortenings’, which are covered by heading 1517. However, the Explanatory 
Notes to the Harmonized System do not constitute a legislative act, and the 
referring court seeks to ascertain the meaning of the concept ‘texturation’. 
NOVA TARGOVSKA KOMPANIA 2004 
 
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19 In the certificates for the product, the manufacturer describes the product as 
‘texturised palm fat from palm oil’. However, according to the company, the term 
‘texturation’ is used in those certificates only to distinguish clearly between 
refined palm oil packaged in cartons, which is the product at issue in the present 
case, and both refined oil of the same type, which is not packaged but is a raw 
material for the production of special hydrogenated fats and margarines, and 
unrefined crude palm oil. 
20 The company submits that any refined oil undergoes some of the texturation 
stages, which are an integral part of the refining and packaging process, but that 
does not mean that the product is textured within the meaning of heading 1517. 
The company takes the view that that heading clearly refers to further chemical 
processing for the purpose of obtaining certain additional structural 
characteristics. 
21 According to the report of the customs laboratory, crude palm oil is refined by 
applying processes of neutralisation (to remove free fatty acids), bleaching (to 
remove carotenoids) and deodorisation (to remove unpleasant odours). When 
prepared as a hard-plastic texturised fat with a fine, smooth, paste-like consistency 
which is stable at room temperature, palm oil is referred to as ‘shortening’. It is 
widely used in the production of bakery products and confectionery such as 
chocolate, filled chocolates and ice cream. 
22 For that purpose, the refined, bleached and deodorised palm oil undergoes further 
technological processing steps, which may include fractionation, that is to say, 
separation of the solid (‘stearin’) and liquid (‘olein’) fractions of the palm oil, 
their subsequent blending in varying proportions and a final treatment for 
plasticisation (texturation) by crystallisation to modify the crystalline structure. In 
view of the above, the referring court seeks to ascertain whether the fact that the 
palm oil – the fractions of which have been refined but not chemically modified – 
has undergone a texturation process constitutes sufficient reason to exclude it 
from classification under heading 1511. 
23 The report of the customs laboratory was established according to the laboratory’s 
own RAP 66 method, which is based on the official AOCS Cc 16-60 method. The 
latter is a method for testing consistency with a penetrometer by measuring the 
distance that a certain weight with a predefined shape penetrates into the fat 
within a certain period of time. 
24 The company argues that that method is not officially recognised and cannot be 
used for the purpose of customs controls in the European Union. It also states that 
the Central Customs Laboratory is not authorised to carry out examinations 
according to the method used, AOCS Cc 16-60, with the consequence that the 
results of its report do not constitute suitable evidence of the existence of 
additional processing to modify the crystalline structure, that is to say, texturation. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-292/22 
 
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25 Since the CN, the Explanatory Notes to the CN and the Explanatory Notes to the 
Harmonized System do not lay down standards, methods, criteria and indicators 
for testing the consistency of palm oil, the referring court seeks to ascertain 
whether the competent customs authorities may independently develop and apply 
analytical working methods for the purpose of classifying goods under heading 
1511 or heading 1517. If that is not permissible, the referring court seeks to 
ascertain the standards, methods, criteria and indicators according to which the 
product may be tested in order to establish that it has undergone a ‘texturation’ 
process and therefore constitutes ‘palm shortening’. 
26 In conclusion, and in the light of the answers to the previous questions referred, 
the referring court seeks to ascertain whether the CN must be interpreted as 
meaning that products described as ‘shortenings’ obtained from refined palm oil 
by texturation are to be classified under heading 1517 of that nomenclature and, 
in particular, under subheading 1517 90 99 thereof.