61991CJ0291_EN
Parties
Grounds
Decision on costs
Operative part
Parties
In Case C-291/91,
REFERENCE to the Court under Article 177 of the EC Treaty by Finanzgericht Muenchen (Finance Court, Munich) for a preliminary ruling in the proceedings pending before that court between
Textilveredlungsunion GmbH & Co. KG (TVU)
and
Hauptzollamt Nuernberg-Fuerth
on the interpretation of Council Regulation (EEC) No 1999/85 of 16 July 1985 on inward processing relief arrangements (OJ 1985 L 188, p. 1) and of Council Regulation (EEC) No 3677/86 of 24 November 1986 laying down provisions for the implementation of the aforesaid Council Regulation (EEC) No 1999/85 (OJ 1986 L 351, p. 1),
THE COURT (First Chamber),
composed of: G.C. Rodríguez Iglesias, President of the Chamber, R. Joliet and D.A.O. Edward, Judges,
Advocate General: W. Van Gervan,
Registrar: H. A. Ruehl, Principal Administrator,
after considering the written observations submitted on behalf of: the Commission of the European Communities, by Blanca Rodríguez Galindo, of its Legal Service, Arnold Ridout, a national civil servant seconded to the Legal Service under the system of exchanges of officials, acting as Agents, assisted by Hans-Juergen Rabe, Rechtsanwalt, Hamburg,
having regard to the Report for the Hearing,
after hearing the oral observations of the Commission at the hearing on 8 October 1992,
after hearing the Opinion of the Advocate General at the sitting on 29 October 1992,
gives the following
Judgment
Grounds
1 By judgment of 10 September 1991, received at the Court on 20 November 1991, the Finanzgericht Muenchen referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Article 3(2) of Council Regulation (EEC) No 1999/85 of 16 July 1985 on inward processing relief arrangements (OJ 1985 L 188, p. 1, hereinafter "the basic regulation") and of Article 3(7) and Article 5(1)(c) of Council Regulation (EEC) No 3677/86 of 24 November 1986 laying down provisions for the implementation of the aforesaid Council Regulation No 1999/85 (OJ 1986 L 351, p. 1, hereinafter "the implementing regulation").
2 The question arose in proceedings between Textilveredlungsunion GmbH & Co. KG (hereinafter "TVU") and the Hauptzollamt (Principal Customs Office) Nuernberg-Fuerth (hereinafter "the Hauptzollamt") relating to the reimbursement of certain customs duties.
3 In January 1980, TVU received from the Hauptzollamt authorization for inward processing on its own behalf ("own processing"). Under the provisions of the basic regulation, which was applicable with effect from 1 January 1987, a new version of the authorization was issued by decision of 17 December 1987. The new version of the authorization provided that the processing would be carried out as "own processing".
4 On 23 July 1989, TVU placed in its bonded warehouse yarn purchased in South Korea by another German undertaking, Gebr. Schaefer GmbH. In October 1989, it made a declaration to the customs authorities that it had released some of the goods for free circulation, and paid the corresponding import duties. However, by application of 15 December 1989 TVU applied for the repayment of those customs duties on the ground that, under the inward processing arrangements, it had dyed some of the yarn belonging to Gebr. Schaefer GmbH under a job contract, and that some of that yarn had subsequently been shipped to Bulgaria.
5 By decision of 22 March 1990, the Hauptzollamt refused TVU' s application on the ground that it did not have adequate authorization to carry out the processing in question, since the operation had been effected under a job contract and not on its own behalf.
6 Following the rejection of its complaint against that decision, TVU brought an action in the Finanzgericht on the basis of Article 3(2) of the basic regulation, which provides that "the authorization shall be issued at the request of the person who carries out processing operations or arranges for them to be carried out". Accordingly, TVU argued that the authorization to carry out own processing which had been issued to it also authorized it to carry out a processing operation on goods belonging to another person established in the customs territory of the Community. For its part, the Hauptzollamt relied upon Article 3(7) of the implementing regulation in order to argue that where the processing is carried out under a job processing contract between two persons established in the Community, "the application for authorization shall be lodged by or on behalf of the principal".
7 The Finanzgericht had doubts about the compatibility of the latter provision with, on the one hand, Article 3(2) of the basic regulation (quoted above) and, on the other, Article 5(1)(c) of the implementing regulation, which defines "job processing" as "any processing of import goods ... which is carried out according to the specifications and on behalf of a principal established outside the customs territory of the Community". It therefore decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:
"Is Article 3(2) of Regulation (EEC) No 1999/85, in conjunction with Article 3(7) and Article 5(1)(c) of Regulation (EEC) No 3677/86, to be interpreted as meaning that an inward processing authorization issued for 'own processing' to a person who processes or transforms non-Community goods for his own account also covers the processing or transformation of non-Community goods carried out by that person under a job contract for a principal established within the Community?"
8 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the procedure 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.
9 I should be stated in limine that the interpretation of the terms of the authorization issued in 1987 to TVU by the German customs authorities falls within the jurisdiction of the national court. It falls to this court only to interpret the Community provisions at issue.
10 In order to place Article 3(7) of the implementing regulation in its context, it should first be observed that Article 3(2) of the basic regulation provides that application for authorization is to be submitted by one of the two persons mentioned therein, namely the person who carries out the processing operations or the person who arranges for them to be carried out.
11 Furthermore, Article 3(1) of the implementing regulation provides, subject to certain exceptions, that "applications for authorization shall be made in writing and shall conform to the model set out in Annex II". The form set out in Annex II, for its part, asks the person filling it out to specify the "name or business name and address of the applicant" and "where the holder of the authorization and the operator are not the same", the same particulars as those of the "operator". Article 3(1) of the same regulation makes a clear distinction between the "applicant" and the "operator" in the case of an operation carried out for another person.
12 It is in this context that Article 3(7) of the implementing regulation refers to the specific situation where two persons established in the Community are involved in processing operations carried out within the Community: on the one hand, the principal on whose behalf the operations are carried out and, on the other, the operator who carries them out.
13 As the Commission has rightly observed, it appears from the scheme and wording of the two regulations at issue that it is important in a situation of that kind that the competent customs authority should be able to seek from the principal evidence that the economic conditions to which the issue of authorization is subject have been fulfilled and every guarantee which it considers necessary in accordance with Article 4(b) of the basic regulation. By providing that "the application for authorization shall be lodged by or on behalf of the principal", Article 3(7) of the implementing regulation, in conjunction with Article 3(1) and Annex II, ensures that the principal' s identity is communicated definitively and officially. However, this does not prevent the operator from approaching the customs authorities, provided that the application for authorization is lodged on behalf of his principal.
14 The requirements of Article 3(1) and (7) of the implementing regulation thus enable adequate supervision to be carried out of processing operations within the Community. Article 3(7) reiterates one of the two limbs of the alternative set out in Article 3(2) of the basic regulation. Consequently, it cannot be regarded as being incompatible with the provisions of the basic regulation.
15 As regards the definition of the expression "job processing" in Article 5(1)(c) of the implementing regulation, it should be observed that it appears in another chapter of that regulation relating to "General conditions for authorizing use of the arrangements" and, in particular, to evidence that the "economic conditions" referred to in Articles 5 and 6 of the basic regulation have been fulfilled. By contrast, Article 3 of the implementing regulation deals with the formalities of the application for authorization. According to the actual wording of Article 5(1) of the implementing regulation, the definition set out in Article 5(1)(c) is "for the purposes of applying the economic conditions", and is therefore irrelevant to the interpretation of Article 3(7) of that regulation.
16 The answer to the question submitted by the Finanzgericht Muenchen must therefore be that Article 3(2) of the basic regulation in conjunction with Article 3(7) of the implementing regulation are to be interpreted as meaning that where, in the context of a job processing contract between a principal and an operator, both of whom are established within the Community, for the processing of non-Community goods, the operator submits the application for authorization to the competent customs authorities, that application must be submitted on behalf of the principal.
Decision on costs
Costs
17 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, 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 (First Chamber)
in answer to the question referred to it by the Finanzgericht Muenchen, by order of 10 September 1991, hereby rules:
Article 3(2) of Council Regulation (EEC) No 1999/85 of 16 July 1985 on inward processing relief arrangements in conjunction with Article 3(7) of Council Regulation (EEC) No 3677/86 of 24 November 1986 laying down provisions for the implementation of Council Regulation (EEC) No 1999/85 must be interpreted as meaning that where, in the context of a job processing contract between a principal and an operator, both of whom are established within the Community, for the processing of non-Community goods, the operator submits the application for authorization to the competent customs authorities, that application must be submitted on behalf of the principal.