61981CJ0208_EN
Parties
Subject of the case
Grounds
Decision on costs
Operative part
Parties
IN JOINED CASES 208 AND 209/81
REFERENCES TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE TARIEFCOMMISSIE ( ADMINISTRATIVE COURT OF LAST INSTANCE IN REVENUE MATTERS ), AMSTERDAM, FOR A PRELIMINARY RULING IN THE ACTIONS PENDING BEFORE THAT COURT BETWEEN
PALTE & HAENTJENS BV, ROTTERDAM,
AND
INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN ( INSPECTOR OF CUSTOMS AND EXCISE ), ROTTERDAM,
Subject of the case
ON THE INTERPRETATION OF HEADING 10.04 AND SUBHEADING 11.02 B I ( A ) 2 ( AA ) OF THE COMMON CUSTOMS TARIFF,
Grounds
1 BY JUDGMENTS OF 3 JULY 1981, RECEIVED AT THE COURT ON 13 JULY 1981, THE TARIEFCOMMISSIE ( ADMINISTRATIVE COURT OF LAST INSTANCE IN REVENUE MATTERS ) OF THE NETHERLANDS REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY THREE QUESTIONS CONCERNING THE INTERPRETATION OF HEADING 10.04 AND SUBHEADING 11.02 B I ( A ) 2 ( AA ) OF THE COMMON CUSTOMS TARIFF .
2 THE QUESTIONS AROSE IN TWO ACTIONS CONCERNING THE TARIFF CLASSIFICATION OF CONSIGNMENTS OF OATS IMPORTED INTO THE NETHERLANDS FROM AUSTRALIA BY THE FORWARDING AGENTS PALTE & HAENTJENS BV, WHICH DECLARED THEM AS ' ' OATS ' '
CLASSIFIED IN HEADING 10.04 OF THE COMMON CUSTOMS TARIFF, WHEREAS THE INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN ( INSPECTOR OF CUSTOMS AND EXCISE ) SUBSEQUENTLY TOOK THE VIEW THAT THE GOODS IN QUESTION WERE ' ' CLIPPED OATS ' '
AND SHOULD BE CLASSIFIED IN SUBHEADING 11.02 B I ( A ) 2 ( AA ) OF THE COMMON CUSTOMS TARIFF .
3 HEADING 10.04 OF THE COMMON CUSTOMS TARIFF ( ' ' OATS ' ' ) IS IN CHAPTER 10 OF THE TARIFF WHICH ACCORDING TO THE INTRODUCTORY NOTE THERETO, COVERS ONLY ' ' THOSE GRAINS WHICH HAVE BEEN NEITHER HULLED NOR OTHERWISE WORKED ' ' . SUBHEADING 11.02 B ( A ) 2 ( AA ) ON THE OTHER HAND IS IN CHAPTER 11 WHICH RELATES INTER ALIA TO ' ' PRODUCTS OF THE MILLING INDUSTRY ' '
AND WITHIN THAT CHAPTER FORMS PART OF HEADING 11.02 B CONCERNING ' ' HULLED GRAINS, ( SHELLED OR HUSKED ) WHETHER OR NOT SLICED OR KIBBLED . ' '
4 THE QUESTIONS SUBMITTED TO THE COURT BY THE TARIEFCOMMISSIE ARE AS FOLLOWS :
' ' 1 . SHOULD OAT GRAINS WHICH AFTER BEING HARVESTED ARE SIMPLY THRESHED, STORED, LOADED AND TRANSPORTED, AS A RESULT OF WHICH THE TIPS ARE BROKEN OFF, BE CLASSIFIED IN HEADING 10.04 OF THE COMMON CUSTOMS TARIFF OR IN SUBHEADING B I ( A ) 2 ( AA ) OF HEADING 11.02?
2.IF THE PRODUCT DESCRIBED IN QUESTION 1 SHOULD BE CLASSIFIED IN SUBHEADING B 1 ( A ) 2 ( AA ) OF HEADING 11.02, DOES THERE THEN APPLY TO SUCH A CONSIGNMENT OF OAT GRAINS, CONSISTING PARTLY OF CLIPPED AND PARTLY OF UNCLIPPED GRAINS, A PERCENTAGE OF CLIPPED GRAINS ABOVE WHICH THE CONSIGNMENT MUST BE CLASSIFIED IN SUBHEADING B I ( A ) 2 ( AA ) OF HEADING 11.02 AND BELOW WHICH IT MUST BE CLASSIFIED IN HEADING 10.04? DOES THE FACT THAT THERE ARE BROKEN-OFF TIPS IN THE CONSIGNMENT HAVE ANY EFFECT ON CLASSIFICATION?
3.IF IT IS ASSUMED THAT THE HULLING OF OAT GRAINS RESULTS IN THE GRAINS BEING CLIPPED AS WELL BECAUSE THE HUSK OR SEED-COAT, OF WHICH THE TIPS FORM PART, IS REMOVED IN HULLING, HOW SHOULD THE TWO FURTHER SUBDIVISIONS OF SUBHEADING B I ( A ) 2 OF HEADING 11.02, HULLED OATS, NAMELY ' ' ( AA ) CLIPPED OATS ' '
AND ' ' ( BB ) OTHER ' ', THEN BE DEFINED IN RELATION TO ONE ANOTHER?
' '
5 IN THE FIRST QUESTION THE COURT IS ASKED TO INDICATE THE CORRECT TARIFF CLASSIFICATION FOR OAT GRAINS FROM WHICH THE TIPS HAVE BEEN BROKEN OFF FOLLOWING THRESHING, STORAGE, LOADING AND TRANSPORT .
6 SUCH GRAINS, WHICH AT THE TIME OF THE IMPORT DECLARATION DISPLAY ALL THE OBJECTIVE PROPERTIES AND CHARACTERISTICS OF CLIPPED OATS, FALL WITHIN SUBHEADING 11.02 B I ( A ) 2 ( AA ) OF THE COMMON CUSTOMS TARIFF AND NO CHECK NEED BE CARRIED OUT TO ESTABLISH HOW THE TIPS WERE BROKEN OFF . SUCH A CHECK IS NOT COMPATIBLE WITH THE EXIGENCIES OF THE EFFICIENT ACCOMPLISHMENT OF CUSTOMS
IMPORT FORMALITIES AND MOREOVER WOULD BE PROHIBITED AS CAUSING PRODUCTS HAVING THE SAME OBJECTIVE PROPERTIES AND CHARACTERISTICS TO BE TREATED DIFFERENTLY ACCORDING TO WHETHER OR NOT THOSE PROPERTIES AND CHARACTERISTICS WERE THE RESULT OF A SPECIFIC PROCESS .
7 THE FIRST QUESTION MUST THEREFORE BE ANSWERED TO THE EFFECT THAT OAT GRAINS WHOSE TIPS HAVE BEEN BROKEN OFF MUST BE CLASSIFIED UNDER SUBHEADING 11.02 B I ( A ) 2 ( AA ) OF THE COMMON CUSTOMS TARIFF .
8 IN THE SECOND QUESTION THE COURT IS ASKED TO INDICATE THE CRITERIA UPON WHICH MUST BE BASED THE CLASSIFICATION OF A CONSIGNMENT OF OATS COMPOSED PARTLY OF CLIPPED AND PARTLY OF UNCLIPPED GRAINS AND TO STATE WHETHER THE PRESENCE OF BROKEN-OFF TIPS IN THE CONSIGNMENT HAS ANY EFFECT ON CLASSIFICATION .
9 CLIPPED GRAINS AS SUCH FALL WITHIN SUBHEADING 11.02 B I ( A ) 2 ( AA ) OF THE COMMON CUSTOMS TARIFF ; UNCLIPPED GRAINS FALL WITHIN HEADING 10.04 . RECOURSE MUST THEREFORE BE HAD TO GENERAL RULE NO 3 ( B ) FOR THE INTERPRETATION OF THE NOMENCLATURE OF THE COMMON CUSTOMS TARIFF, CONCERNING MIXTURES, ACCORDING TO WHICH SUCH PRODUCTS ARE TO BE ' ' CLASSIFIED . . . AS IF THEY CONSISTED OF THE MATERIAL . . . WHICH GIVES THE GOODS THEIR ESSENTIAL CHARACTER ' ' . IT MAY REASONABLY BE CONSIDERED THAT CLIPPED OATS GIVE A MIXED CONSIGNMENT ITS ESSENTIAL CHARACTER WHERE THE CLIPPED GRAINS EXCEED 50 % BY WEIGHT OF THE TOTAL CONSIGNMENT .
10 HOWEVER, THE FACT THAT THE BROKEN-OFF TIPS REMAIN WITHIN THE CONSIGNMENT DEPRIVES IT OF ITS CHARACTER OF A MIXTURE SINCE IN SUCH CIRCUMSTANCES THE CLIPPED GRAINS CAN NO LONGER BE REGARDED AS ' ' CLIPPED OATS ' '
WITHIN THE MEANING OF SUBHEADING 11.02 B I ( A ) 2 ( AA ) OF THE COMMON CUSTOMS TARIFF .
11 IN FACT, AS IS APPARENT FROM PARAGRAPH ( 7 ) OF THE EXPLANATORY NOTE TO HEADING 11.02 IN THE CUSTOMS COOPERATION COUNCIL NOMENCLATURE, ' ' CLIPPED GRAIN ( PRINCIPALLY OATS ) ' '
IS ' ' GRAIN WHICH HAS BEEN CLIPPED TO FACILITATE INGESTION BY LIVESTOCK ' ' . THAT DEFINITION NECESSARILY PRESUPPOSES THAT THE BROKEN-OFF TIPS HAVE BEEN SEPARATED FROM THE CLIPPED GRAINS . IF THAT WERE NOT
THE CASE, THE HIGHER NUTRITIONAL VALUE OBTAINED BY CLIPPING, WHICH IS THE PROPERTY DISTINGUISHING CLIPPED OATS FROM UNCLIPPED OATS, WOULD BE ELIMINATED .
12 A CONSIGNMENT OF OATS CONTAINING THE BROKEN-OFF TIPS MAY NOT BE MARKETED AS ' ' CLIPPED GRAIN ' '
FOR USE AS ANIMAL FEED UNTIL IT HAS UNDERGONE A PROCESS FOR THE REMOVAL OF THOSE TIPS . IT IS THEREFORE NEITHER REALISTIC NOR COMMERCIALLY PRACTICAL TO CLASSIFY SUCH A CONSIGNMENT IN SUBHEADING 11.02 B I ( A ) 2 ( AA ) OF THE COMMON CUSTOMS TARIFF IF THAT PROCESS HAS NOT BEEN CARRIED OUT .
13 THUS THE AMENDMENT WHICH ACCORDING TO THE COMMISSION WAS MADE TO THE EXPLANATORY NOTES TO THE COMMON CUSTOMS TARIFF IN NOVEMBER 1980, SO AS TO BRING WITHIN SUBHEADING 11.02 B I ( A ) 2 ( AA ) ' ' OAT GRAINS WHICH HAVE ONLY BEEN THRESHED AFTER HARVESTING AND, ALTHOUGH RETAINING THEIR HUSKS OR BRACT, HAVE HAD THEIR TIPS BROKEN OFF ' '
MAY BE INTERPRETED AS MEANING THAT THE BROKEN-OFF TIPS MUST BE SEPARATED FROM THE REMAINDER OF THE CONSIGNMENT, SINCE ONLY THAT INTERPRETATION ALLOWS A REAL DISTINCTION TO BE DRAWN BETWEEN CLIPPED OATS AND UNCLIPPED OATS .
14 IT FOLLOWS FROM THE FOREGOING CONSIDERATIONS THAT CLIPPED GRAINS MAY BE REGARDED AS CLIPPED OATS ONLY IF THE QUANTITY OF BROKEN-OFF TIPS WITH WHICH THEY ARE MIXED IS VERY LOW IN RELATION TO THE QUANTITY OF CLIPPED GRAINS, AS WOULD BE THE CASE FOLLOWING A PROCESS SPECIFICALLY INTENDED TO REMOVE THE TIPS . ON THE OTHER HAND, IF THE QUANTITY OF BROKEN-OFF TIPS IS NOT NEGLIGIBLE EVEN CLIPPED GRAINS ARE TO BE REGARDED AS UNPROCESSED OATS .
15 THE ANSWER TO THE SECOND QUESTION MUST THEREFORE BE THAT A CONSIGNMENT OF OATS CONSISTING PARTLY OF CLIPPED AND PARTLY OF UNCLIPPED GRAINS MUST BE CLASSIFIED UNDER SUBHEADING 11.02 B I ( A ) 2 ( AA ) IF THE CLIPPED GRAINS EXCEEDED 50% BY WEIGHT OF THE TOTAL CONSIGNMENT AND THAT A CONSIGNMENT OF OATS CONSISTING PARTLY OF CLIPPED GRAINS, PARTLY OF UNCLIPPED GRAINS AND PARTLY OF BROKEN-OFF TIPS MUST BE CLASSIFIED UNDER HEADING 10.04 OF THE COMMON CUSTOMS TARIFF IF THE QUANTITY OF BROKEN-OFF TIPS IS NOT NEGLIGIBLE IN RELATION TO THAT OF THE CLIPPED GRAINS .
16 AS REGARDS THE THIRD QUESTION, IT SHOULD BE NOTED THAT, AS THE COMMON CUSTOMS TARIFF NOW STANDS, A REPLY TO THAT QUESTION IS OF NO PRACTICAL
IMPORTANCE, SINCE THE RATE OF DUTY PRESCRIBED BY THE COMMON CUSTOMS TARIFF IS THE SAME FOR SUBHEADING 11.02 B I ( A ) 2 ( AA ) AS FOR SUBHEADING 11.02 B I ( A ) 2 ( BB ). IT SHOULD NEVERTHELESS BE POINTED OUT, IN SO FAR AS MAY BE RELEVANT, THAT CLIPPING CONSTITUTES A KIND OF LESS EXTENSIVE HULLING, WHICH REMOVES ONLY THE EXTREMITIES FROM THE GRAINS AND NOT A LARGE PART OR ALL OF THE PERICARP . IT FOLLOWS THAT SUBHEADING 11.02 I ( A ) 2 ( AA ) REFERS ONLY TO CLIPPED GRAINS WHEREAS SUBHEADING 11.02 B ( A ) 2 ( BB ) REFERS TO OAT GRAINS WHICH HAVE BEEN SUBJECTED TO A HULLING PROCESS WHICH IS MORE EXTENSIVE THAN MERE CLIPPING .
17 IT IS APPROPRIATE THEREFORE TO ANSWER THE THIRD QUESTION TO THE EFFECT THAT OAT GRAINS WHICH HAVE MERELY BEEN CLIPPED MUST BE CLASSIFIED UNDER SUBHEADING 11.02 B I ( A ) 2 ( AA ); OAT GRAINS WHICH HAVE UNDERGONE MORE EXTENSIVE HULLING MUST BE CLASSIFIED UNDER SUBHEADING 11.02 B I ( A ) 2 ( BB ).
Decision on costs
COSTS
18 THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES, WHICH HAS SUBMITTED OBSERVATIONS TO THE COURT, ARE NOT RECOVERABLE . AS THESE PROCEEDINGS ARE, IN SO FAR AS THE PARTIES TO THE MAIN ACTION 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 ( FIRST CHAMBER )
IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE TARIEFCOMMISSIE BY JUDGMENT OF 3 JULY 1981, HEREBY RULES :
1 . OAT GRAINS WHOSE TIPS HAVE BEEN BROKEN OFF MUST BE CLASSIFIED UNDER SUBHEADING 11.02 B I ( A ) 2 ( AA ) OF THE COMMON CUSTOMS TARIFF .
2.A CONSIGNMENT OF OATS CONSISTING PARTLY OF CLIPPED AND PARTLY OF UNCLIPPED GRAINS MUST BE CLASSIFIED UNDER SUBHEADING 11.02 B I ( A ) 2 ( AA ) IF THE CLIPPED GRAINS EXCEED 50% BY WEIGHT OF THE TOTAL CONSIGNMENT ; A CONSIGNMENT OF OATS CONSISTING PARTLY OF CLIPPED GRAINS, PARTLY OF UNCLIPPED GRAINS AND PARTLY OF BROKEN-OFF TIPS MUST
BE CLASSIFIED UNDER HEADING 10.04 OF THE COMMON CUSTOMS TARIFF IF THE QUANTITY OF BROKEN-OFF TIPS IS NOT NEGLIGIBLE IN RELATION TO THAT OF THE CLIPPED GRAINS .
3.OAT GRAINS WHICH HAVE MERELY BEEN CLIPPED MUST BE CLASSIFIED UNDER SUBHEADING 11.02 B I ( A ) 2 ( AA ); OAT GRAINS WHICH HAVE UNDERGONE MORE EXTENSIVE HULLING MUST BE CLASSIFIED UNDER SUBHEADING 11.02 B I ( A ) 2 ( BB ).