61989CJ0265_EN
Parties
Grounds
Decision on costs
Operative part
Parties
In Case C-265/89,
REFERENCE to the Court under Article 177 of the EEC Treaty by the Tariefcommissie ( Administrative Court of last instance in revenue matters ) for a preliminary ruling in the proceedings pending before that court between
Gebr . Vismans Nederland BV, Amsterdam,
and
Inspecteur der Invoerrechten en Accijnzen,
on the interpretation and validity of Commission Regulation ( EEC ) No 1388/85 of 24 May 1985 classifying goods under subheading 12.04 A of the Common Customs Tariff ( Official Journal 1985 L 140, p . 7 ),
THE COURT ( Second Chamber )
composed of : F . A . Schockweiler, President of Chamber, G . F . Mancini and T . F . O' Higgins, Judges,
Advocate General : W . Van Gerven
Registrar : D . Louterman, Principal Administrator,
after considering the observations submitted on behalf of
Gebr . Vismans Nederland BV, the appellant in the main proceedings, by D . G . van Vliet, of the Amsterdam Bar,
the Commission of the European Communities, by René Barents, a member of its Legal Department, acting as Agent,
having regard to the Report for the Hearing and further to the hearing on 5 June 1990,
after hearing the Opinion of the Advocate General delivered at the sitting on 10 July 1990,
gives the following
Judgment
Grounds
1 By a decision of 11 August 1989, which was received at the Court on 23 August 1989, the Tariefcommissie referred to the Court, pursuant to Article 177 of the EEC Treaty, two questions concerning the interpretation and validity of Commission Regulation ( EEC ) No 1388/85 of 24 May 1985 classifying goods under subheading 12.04 A of the Common Customs Tariff ( Official Journal 1985 L 140, p . 7 ).
2 Those questions were raised in the context of a dispute between Gebr . Vismans Nederland BV ( hereinafter referred to as "Vismans ") and the Inspecteur der Invoerrechten en Accijnzen ( Inspector of import and excise duties, hereinafter referred to as "the Inspector ") concerning the tariff classification of partly de-sugared sliced sugar beet that had been pelletized with the aid of a binder .
The relevant legislation
3 Headings 12.04 and 23.03 B I of the Common Customs Tariff, in the version applicable at the time of the facts ( Council Regulation ( EEC ) No 3618/86 of 24 November 1986, Official Journal 1986 L 345, p . 1 ), read as follows :
Heading 12.04 :
"Sugar beet, whole or sliced, fresh, dried or powdered; sugar cane :
A . Sugar beet :
I . fresh
II . dried or powdered
B . Sugar cane";
Heading 23.03 :
"Beet pulp, bagasse and other waste of sugar manufacture; brewing and distilling dregs and waste; residues of starch manufacture and similar residues :
A . ...
B . Other :
I . Beet pulp, bagasse and other waste of sugar manufacture ".
4 By virtue of the powers conferred upon it by Articles 2(3 ) and 3 of Council Regulation ( EEC ) No 97/69 of 16 January 1969 on measures to be taken for the uniform application of the nomenclature of the Common Customs Tariff ( Official Journal, English Special Edition 1969 ( I ), p . 12 ), as amended by Council Regulation ( EEC ) No 2055/84 of 16 July 1984 ( Official Journal 1984 L 191, p . 1 ), the Commission adopted the aforesaid Regulation No 1388/85 . Article 1 of that regulation provides that :
"Sliced sugar beet, partly de-sugared, whether or not pelletized either directly by compression or by the addition of a binder ( up to 3% by weight ), having a sucrose content ( including any sucrose contained in the binder ) exceeding 10% by weight by reference to the dry matter, shall be classified in the Common Customs Tariff under subheading :
12.04 - Sugar beet whole or sliced, fresh, dried, or powdered; sugar cane :
A . Sugar beet ."
The dispute in the main proceedings
5 Vismans imported into the Netherlands sliced sugar beet, referred to as "beet pulp", constituting the residue of the sugar-extraction process . The sliced beet was classified, at the time of importation, under tariff subheading 23.03 B I . Subsequently, as a result of various analyses, the sucrose content of the beet was found to be 12%, and the Inspector decided to classify the beet under tariff heading 12.04 .
6 Vismans appealed against the final classification decision to the Tariefcommissie, which stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling :
"( 1 ) Do the goods in issue, which contain 12% sucrose but must be regarded as pelletized 'beet pulp' which has been de -sugared as far as economically feasible, nevertheless fall under the term 'partly de-sugared sugar beet' in Article 1 of Commission Regulation ( EEC ) No 1388/85 of 24 May 1985?
( 2 ) If so, is the regulation referred to in Question 1 valid?"
7 In the grounds of its decision the Tariefcommissie states that the imported products have the following objective characteristics and properties : they are derived from sliced sugar beet and constitute the residue of a completed process of sugar extraction; they contain 12% sucrose, calculated by reference to the dry matter, including the sucrose in the binder; they have been pressed into pellets; as technology now stands, extraction of further sugar from them would be uneconomic .
8 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the relevant rules and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .
First question
9 By its first question the national court asks in substance whether Regulation No 1388/85 must be interpreted as applying to products such as those imported by Vismans .
10 In order to reply to that question it should first be noted that, according to the first recital in its preamble, the regulation deals with the tariff classification of sliced sugar beet, partly de-sugared, whether or not pelletized either directly by compression or by the addition of a binder ( up to 3% by weight ) having a sucrose content ( including any sucrose contained in the binder ) exceeding 10% by weight by reference to the dry matter . According to the fourth recital, it is necessary, in order to draw a distinction between sugar beet covered by tariff subheading 12.04 A and sugar beet pulp covered by tariff subheading 23.03 B I, to set a limit for sucrose content of 10 %.
11 It follows clearly from the wording of Article 1 of the regulation and from its preamble that sliced sugar beet which has a sucrose content exceeding 10% by weight by reference to the dry matter falls ipso facto within the scope of the regulation .
12 Consequently, the reply to be given to the first question is that Commission Regulation No 1388/85 of 24 May 1985 classifying goods under subheading 12.04 A of the Common Customs Tariff must be interpreted to the effect that products which form the residue of a sugar-extraction process and have a sucrose content of 12% by weight by reference to the dry matter are covered by the expression "partly de-sugared sliced sugar beet" in Article 1 of the regulation .
The second question
13 It should be remembered first of all that, in relation to the interpretation of the Common Customs Tariff, the Council has conferred upon the Commission, acting in cooperation with the Customs experts of the Member States, a wide margin of discretion in defining the subject-matter of tariff headings falling to be considered for the classification of particular goods, provided only that the provisions adopted by the Commission do not amend the text of the Tariff ( judgments in Case 141/86 Customs and Excise ex parte Imperial Tobacco Ltd [1988] ECR 57 and in Case 37/75 Bagusat KG v Hauptzollamt Berlin-Packhof [1975] ECR 1339 ).
14 As the Court has consistently held, in the interests of legal certainty and ease of verification, the decisive criterion for the customs classification of goods must generally be their objective characteristics and properties, as defined by the wording of the headings of the Common Customs Tariff and the notes to the sections or chapters ( judgments in Case 164/88 Ministère publique v Rispal [1989] ECR 2041 and in Case C-233/88 Gijs van de Kolk - Douane Expediteur BV v Inspecteur der Invoerrechten en Accijnzen [1990] ECR I-265 ).
15 The question which arises in this case is whether the Commission exceeded its powers in adopting Regulation No 1388/85 .
16 It is clear that the Common Customs Tariff does not provide any criterion for distinguishing between whole or sliced sugar beet falling under tariff subheading 12.04 A and beet pulp falling under subheading 23.03 B I .
17 It is common ground that, by choosing sucrose content as the criterion for distinguishing between the goods to be classified under the two tariff subheadings in question, which fall respectively in Chapter 12, entitled "Oil seeds and oleaginous fruit; miscellaneous grains, seeds and fruit; industrial and medical plants; straw and fodder", and Chapter 23, entitled "Residues and waste from the food industries; prepared animal fodder", the Commission opted for an intrinsic characteristic and an objective property of sugar beet that was easy to verify .
18 Moreover, as the Court has consistently held ( see the judgment in Case 183/73 Osram GmbH v Oberfinanzdirektion Frankfurt [1974] ECR 477 ), it is necessary to take account of the Explanatory Notes to the Customs Cooperation Council nomenclature, which state that "beet pulp", for the purposes of tariff subheading 23.03 B I, is "the residue which remains after the sugar has been extracted from the root of the sugar beet ".
19 The terms "residues" and "waste", within the meaning of tariff subheading 23.03 B I, both refer to substances which are the final result of an extraction process .
20 It appears from the evidence before the Court that, whilst it is technically possible to extract all the sugar from sliced sugar beet, it is not, as the Commission acknowledges, generally possible to reduce the sugar content of the sliced beet below 6 or 7% and, in unfavourable conditions, 10 or 12% by weight by reference to the dry matter .
21 Moreover, it is common ground that, as technology stands at present, the sugar industry does not in practice use for sugar extraction de-sugared sliced beet having a sucrose content, including any sucrose ( of up to 3% approximately by weight ) from the binder, of between 10 and 12% by weight by reference to the dry matter . The Commission acknowledged at the hearing that it was not aware of a single case in which the sugar industry had extracted sugar from partly de-sugared sliced beet .
22 It follows that such goods are the final product of the process of extracting sugar from sugar beet and, as such, should be regarded as beet pulp within the meaning of tariff subheading 23.03 B I .
23 It follows that, by deciding that partly de-sugared sliced sugar beet, whether or not pelletized either directly by compression or by the addition of a binder ( up to 3% approximately by weight ), having a sucrose content ( including any sucrose contained in the binder ) exceeding 10% by weight by reference to the dry matter, should be classified under tariff subheading 12.04 A, the Commission amended that subheading . It therefore exceeded the limits of its discretion .
24 The reply to be given to the Tariefcommissie' s second question is therefore that Article 1 of Commission Regulation ( EEC ) No 1388/85 of 24 May 1985 classifying goods under subheading 12.04 A of the Common Customs Tariff is invalid .
Decision on costs
Costs
25 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable . Since these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the proceedings pending before the national court, the decision on costs is a matter for that court .
Operative part
On those grounds,
THE COURT ( Second Chamber ),
in answer to the questions put to it by the Tariefcommissie, by decision of 11 August 1989, hereby rules :
( 1 ) Commission Regulation ( EEC ) No 1388/85 of 24 May 1985 classifying goods under subheading 12.04 A of the Common Customs Tariff is to be interpreted as meaning that products constituting the residue of a sugar-extraction process and having a sucrose content of 12% by weight by reference to the dry matter are covered by the expression "partly de-sugared sliced sugar beet" in Article 1 of that regulation .
( 2 ) Article 1 of Commission Regulation ( EEC ) No 1388/85 of 24 May 1985 classifying goods under subheading 12.04 A of the Common Customs Tariff is invalid .