62007CJ0411_EN
Parties
Grounds
Operative part
Parties
In Case C‑411/07,
REFERENCE for a preliminary ruling under Article 234 EC, by the Hoge Raad der Nederlanden (Netherlands), made by decision of 10 August 2007, received at the Court on 7 September 2007, in the proceedings
X BV
v
Staatssecretaris van Financiën,
THE COURT (Fifth Chamber),
composed of A. Tizzano, President of the Chamber, M. Ilešič (Rapporteur) and J.-J. Kasel, Judges,
Advocate General: Y. Bot,
Registrar: M. Ferreira, Principal Administrator,
having regard to the written procedure and further to the hearing on 25 June 2008,
after considering the observations submitted on behalf of:
– X BV, by H. de Bie and E. Zietse, advocaten,
– the Netherlands Government, by C. Wissels and C. ten Dam, acting as Agents,
– the Commission of the European Communities, by G. Wilms, acting as Agent, and by R. de Bree, advocaat,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
Judgment
Grounds
1. This reference for a preliminary ruling concerns the interpretation of headings 8541, 8542 and 8543 of 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 (OJ 1987 L 256, p. 1), as amended by Commission Regulation (EC) No 1832/2002 of 1 August 2002 (OJ 2002 L 290, p. 1) (‘the CN’).
2. The reference was made in the course of proceedings between a company incorporated under Netherlands law, called ‘X BV’ (‘X’) by the referring court, and the Staatssecretaris van Financiën (Secretary of State for Finance) concerning the tariff classification of optocouplers.
Legal background
3. The CN, established by Regulation No 2658/87, is based on the International Harmonised Commodity Description and Coding System (‘HS’) drawn up by the Customs Cooperation Council, now the World Customs Organisation, and established by the International Convention concluded at Brussels on 14 June 1983 and approved on behalf of the Community by Council Decision 87/369/EEC of 7 April 1987 (OJ 1987 L 198, p. 1). The CN takes six-digit headings and subheadings from the HS, only the seventh and eighth digits forming subdivisions that are specific to it.
4. The version of the CN applicable at the material time is that in Annex I to Regulation No 1832/2002.
5. Section XVI of the CN consists of two parts, including Chapter 85 which is entitled ‘Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles’. Chapter 85 contains, inter alia, the following headings and subheadings:
‘8541 Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made-up into panels; mounted piezo-electric crystals:
…
8541 40	– Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made-up into panels, light-emitting diodes:
8541 40 10 	– – Light-emitting diodes, including laser diodes
8541 40 90 	– – Other
…
8542 		 Electronic integrated circuits and microassemblies:
8542 10 00	– – Cards incorporating an electronic integrated circuit (‘smart cards’)
– Monolithic integrated circuits:
8542 21	– – Digital:
…
8542 29	– – Other:
…
8542 29 60 	– – – – Control circuits
8542 29 70	– – – – Interface circuits; interface circuits capable of performing control functions
…
8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter:
…
8543 89		– – Other:
…
8543 89 95	– – – – Other
…’
6. Notes 2 and 5 of Section XVI of the CN state:
‘2. Subject to note 1 to this section, note 1 to Chapter 84 and note 1 to Chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules:
(a) Parts which are goods included in any of the headings of Chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8485, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings.
(b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517.
(c) All other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8485 or 8548.
5. For the purposes of these notes, the expression “machine” means any machine, plant, equipment, apparatus or appliance cited in the headings of Chapter 84 or 85.’
The dispute in the main proceedings and the questions referred for a preliminary ruling
7. In 2003, the Inspecteur van de Douane (‘the inspector’) issued 14 binding tariff informations to X for optocouplers.
8. As is apparent from the file, optocouplers are devices designed to ensure galvanic separation. Galvanic separation is insulation which prevents direct circulation of an electric current between neighbouring electronic circuits. An optocoupler permits such isolation between the emitter circuit and the collector circuit by first converting the electric signals from the emitter circuit into light signals with the aid of a light emitting diode (‘LED’) and then reconverting the light signals into electric signals in the collector circuit using a photodetector (consisting of a photodiode or a phototransistor). In addition to a photodiode and a photodetector, an optocoupler always contains a plastic film which is highly resistant to electricity but which allows light signals to pass. The incoming electric signals are thereby transferred from one electric circuit to the other without those circuits being electrically connected with each other.
9. Some optocouplers, including those marketed by X, also contain an integrated circuit with which outgoing electrical signals are stabilised and amplified.
10. The various components described above are enclosed in a plastic case.
11. Optocouplers are widely used in the manufacture of many types of apparatus and equipment, in particular communication apparatus, computer equipment and industrial machines.
12. In the binding tariff informations issued, 11 types of optocouplers were classified under subheading 8541 40 90, one under subheading 8542 29 60 and two under subheading 8542 29 70 of the CN.
13. By decision of 17 November 2004, the inspector withdrew the binding tariff informations because he had formed the view that all of the products in question were to be classified under subheading 8543 89 95 CN. Following the complaint made by X the inspector maintained that decision.
14. By judgment of 22 December 2005, the Rechtbank te Haarlem (District Court, Haarlem) dismissed the action brought against that decision. It held that optocouplers are apparatuses with individual functions and that they must be classed under subheading 8543 89 95 of the CN.
15. Taking the view that optocouplers could not in any case fall within heading 8543, X brought an appeal in cassation before the Hoge Raad der Nederlanden.
16. The Hoge Raad der Nederlanden (Supreme Court of the Netherlands) observes that optocouplers contain the components mentioned in heading 8541. According to that court, the question is whether classification under heading 8541 is also possible where the optocoupler contains a circuit through which outgoing electric signals are stabilised and amplified.
17. In those circumstances, the Hoge Raad der Nederlanden decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:
‘1. Must an optical-electrical circuit contained in a plastic case which, together with a light emitting diode (“LED”), a plastic film and a photodetector, contains an amplifying circuit and is intended for incorporation in, inter alia, communication and computer equipment, consumer electronics and industrial machines, be regarded as an electrical machine or apparatus within the meaning of heading 8543 of the CN?
2. If it is a part of a machine, is “photosensitive semiconductor device, including photovoltaic cells, whether or not assembled in modules or made up into panels” referred to in heading 8541 of the CN to be interpreted as including an optical-electrical circuit as described above, or is such a product to be regarded as an electronic integrated circuit within the meaning of heading 8542 of the CN owing to the presence of the amplifying circuit?’
The questions referred for a preliminary ruling
18. By its questions, which should be examined together, the referring court asks essentially whether an optocoupler containing an amplifying circuit falls under heading 8541 of the CN as a photosensitive semiconductor device, under heading 8542 of the CN as an electronic integrated circuit or heading 8543 of the CN as an electrical machine or apparatus with an individual function.
19. X submits that optocouplers, including those containing an amplifying circuit, must be classified under heading 8541. The Commission of the European Communities shares that view. The Netherlands Government, on the other hand, takes the view that an optocoupler which is composed not only of an LED and photodiodes but also an integrated amplifying circuit must be classified under heading 8543.
20. It should be noted that, in the interests of legal certainty and ease of verification, the decisive criterion for the classification of goods for customs purposes is in general to be found in their objective characteristics and properties as defined in the wording of the relevant heading of the Combined Nomenclature and of the notes to the sections or chapters (Case C-382/95 Techex
[1997] ECR I-7363, paragraph 11; Joined Cases C‑208/06 and C‑209/06 Medion and Canon Deutschland
[2007] ECR I‑7963, paragraph 34; and Case C-165/07 Ecco Sko
[2008] ECR I-0000, paragraph 27).
21. Heading 8541 of the CN concerns in particular photosensitive semiconductor devices. As is apparent from the order for reference and the observations lodged at the Court, it is common ground that optocouplers are such devices.
22. The Netherlands Government also acknowledged in its written observations that optocouplers without added circuits must be classified under heading 8541. It argues that it is only where an optocoupler contains an integrated circuit that classification under that heading is no longer possible. It submits that optocouplers containing an integrated circuit which stabilises and amplifies outgoing electrical signals cannot be regarded as simple photosensitive semiconductor devices.
23. In that connection, it must be observed that the tariff classification of optocouplers cannot vary according to the presence or absence of an integrated amplifying circuit. It is not disputed that the incorporation of such a circuit in optocouplers is a very widespread technique which serves only to ensure good transmission of signals. The presence of the circuit does not therefore fundamentally alter the characteristics and properties of the optocoupler as a photosensitive semiconductor.
24. It is clear from the foregoing considerations that optocouplers are also covered by heading 8541 of the CN when they contain an amplifying circuit.
25. Moreover, since it is not disputed that optocouplers are photosensitive semiconductor devices, their classification under heading 8541 of the CN appears, having regard to their characteristics summarised in paragraph 8 of this judgment, more specific and appropriate than classification under heading 8542 of the CN.
26. Finally, contrary to the Netherlands Government’s assertions, optocouplers, whatever their exact composition, cannot be classified under heading 8543 of the CN.
27. Heading 8543 is applicable only if the other headings of Chapter 85 of the CN are not applicable. It is clear from paragraph 24 of this judgment that optocouplers fall within heading 8541 of the CN, including where they contain an amplifying circuit.
28. In any event, optocouplers may be classified under heading 8543 of the CN only if they have an individual function. It must be observed that optocouplers must be regarded as machine components rather than ‘[e]lectrical machines and apparatus, having individual functions’ within the meaning of heading 8543 of the CN. As the referring court explained and X pointed out, optocouplers in themselves cannot function effectively, independently of the electrical device for which they are designed.
29. Furthermore, it is clear from Note 2(a) to Section XVI of the CN that machine parts which are goods included in any of the headings of Chapter 84 or 85, as in this case heading 8541, are in all cases to be classified in their respective headings. It is true that Note 2(b) to Section XVI states that, where machine parts are suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading, they are to be classified with machines of that kind. It must be stated, however, that that rule does not apply to optocouplers, since they are suitable for use with many types of machines or apparatus referred to in heading 8543 of the CN (‘Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter’).
30. Having regard to all of the foregoing considerations, the answer to the reference for a preliminary ruling must be that the Combined Nomenclature in Annex I to Regulation No 2658/87, as amended by Regulation No 1832/2002, must be interpreted as meaning that an optocoupler, regardless of whether or not it contains an amplifying circuit, falls within heading 8541.
Costs
31. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
Operative part
On those grounds, the Court (Fifth Chamber) hereby rules:
The Combined Nomenclature 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 Regulation (EC) No 1832/2002 of 1 August 2002, must be interpreted as meaning that an optocoupler, regardless of whether or not it contains an amplifying circuit, falls within heading 8541.