61995CJ0121_EN
Parties
Grounds
Decision on costs
Operative part
Parties
In Case C-121/95,
REFERENCE to the Court under Article 177 of the EC Treaty by the Bundesfinanzhof for a preliminary ruling in the proceedings pending before that court between
VOBIS Microcomputer AG
and
Oberfinanzdirektion Muenchen
on the interpretation of the Combined Nomenclature of the Common Customs Tariff in the version annexed to Commission Regulation (EEC) No 2505/92 of 14 July 1992 amending Annexes I and II to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1992 L 267, p. 1),
THE COURT (First Chamber),
composed of: D.A.O. Edward (Rapporteur), President of the Chamber, P. Jann and L. Sevón, Judges,
Advocate General: C.O. Lenz,
Registrar: R. Grass,
after considering the written observations submitted on behalf of:
° VOBIS Microcomputer AG, by Helmut Columbus, Steuerberater, Handorf,
° the Commission of the European Communities, by Claudia Schmidt, of its Legal Service, acting as Agent, assisted by Hans-Juergen Rabe, Rechtsanwalt, Hamburg,
having regard to the report of the Judge-Rapporteur,
after hearing the Opinion of the Advocate General at the sitting on 12 March 1996,
gives the following
Judgment
Grounds
1 By order of 16 March 1995, received at the Court on 10 April 1995, the Bundesfinanzhof (Federal Finance Court) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty two questions on the interpretation of the Combined Nomenclature of the Common Customs Tariff in the version annexed to Commission Regulation (EEC) No 2505/92 of 14 July 1992 amending Annexes I and II to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1992 L 267, p. 1).
2 The questions arose in proceedings between VOBIS Microcomputer AG (hereinafter "VOBIS") and the Oberfinanzdirektion Muenchen (Principal Revenue Office, Munich) concerning the tariff classification of a "computer housing with built-in floppy-disk drives (compact)". That product is a basic module (measuring approximately 27 x 41 x 15 cm and weighing about 8.1 kg) for the digital processing unit of an automatic data-processing machine, and comprises, in a metal housing with display and operating features, a power supply, two disk drives and connection cables (hereinafter "the basic module").
3 Subheading No 8473 30 90 of the Combined Nomenclature reads as follows:
"8473 Parts and accessories ... suitable for use solely or principally with machines of heading Nos 8469 to 8472:
...
8473 30 ° Parts and accessories of the machines of heading No 8471:
...
8473 30 90 ° ° Other".
4 Subheading No 8471 93 59, which is part of Chapter 84 of Section XVI of the Combined Nomenclature, reads as follows:
"8471 Automatic data-processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included:
...
8471 93 ° ° Storage units, whether or not presented with the rest of a system:
...
8471 93 40 ° ° ° ° ° Disk storage units:
...
8471 93 59 ° ° ° ° ° ° Other".
5 According to Note 5 to Chapter 84 of the Combined Nomenclature:
"5. (A) For the purposes of heading No 8471, the expression 'automatic data-processing machines' means:
(a) digital machines, capable of
(1) storing the processing program or programs and at least the data immediately necessary for the execution of the program;
(2) being freely programmed in accordance with the requirements of the user;
(3) performing arithmetical computations specified by the user; and
(4) executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run;
...
(B) Automatic data-processing machines may be in the form of systems consisting of a variable number of separately housed units. A unit is to be regarded as being a part of the complete system if it meets all the following conditions:
(a) it is connectable to the central processing unit either directly or through one or more other units;
(b) it is specifically designed as part of such a system (it must, in particular, unless it is a power supply unit, be able to accept or deliver data in a form (code or signals) which can be used by the system).
Such units presented separately are also to be classified within heading No 8471.
Heading No 8471 does not cover machines incorporating or working in conjunction with an automatic data-processing machine and performing a specific function. Such machines are classified in the headings appropriate to their respective functions or, failing that, in residual headings."
6 Finally, under the General Rules for the interpretation of the Combined Nomenclature:
"...
3. When by application of rule 2(b) or for any other reason, goods are prima facie classifiable under two or more headings, classification shall be effected as follows:
(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.
(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character in so far as this criterion is applicable."
7 VOBIS, a company incorporated under German law, imported the basic module into Germany and combined it with additional units to produce a digital data-processing machine.
8 On 13 January 1993 the Oberfinanzdirektion Muenchen issued VOBIS with a binding tariff notification classifying the basic module under subheading No 8473 30 90 of the Combined Nomenclature of the Common Customs Tariff.
9 When its complaint against that classification was rejected, VOBIS brought proceedings in the Finanzgericht (Finance Court). It argued that the basic module fell within subheading No 8471 93 59 as a "storage unit", since although it was a part of a compact machine, it satisfied the criteria for a "unit" defined in Note 5(B) to Chapter 84 of the Combined Nomenclature.
10 The Finanzgericht dismissed the action on the grounds that the basic module was to be classified as a "part" of a data-processing machine which was as yet incomplete, not as a drive unit with extra features, and that it was primarily a housing in which parts of a data-processing machine were already present. VOBIS appealed on a point of law to the Bundesfinanzhof against that decision.
11 Since it considered that the dispute involved the interpretation of Community law, the Bundesfinanzhof referred the following questions to the Court of Justice for a preliminary ruling:
"1. Is the Common Customs Tariff ° Combined Nomenclature 1993 ° to be interpreted as meaning that a 'basic module' for the assembly of a data-processing machine, consisting of a housing essentially with two disk-drives, as described in more detail in the grounds of the order for reference, is to be classified under subheading No 8471 93 59 either directly or pursuant to General Rule 3(b) as a 'storage unit', on the basis of the drives it contains?
2. If not:
Is it to be interpreted as meaning that a product of the type described above is to be classified under subheading No 8473 30 90 as a 'part' (of a data-processing machine)?"
12 By its first question the Bundesfinanzhof asks essentially whether the Combined Nomenclature of the Common Customs Tariff, in the version annexed to Regulation No 2505/92 amending Annexes I and II to Regulation No 2658/87, is to be interpreted as meaning that a basic module for the assembly of a data-processing machine, consisting of a housing essentially containing two disk drives, is to be classified under subheading No 8471 93 59 as a "storage unit", on the basis of the drives it contains.
13 The Court has consistently held 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 sought in their objective characteristics and properties, as defined in the relevant headings of the Common Customs Tariff and the notes to the sections or chapters. Likewise, for the purpose of interpreting the Common Customs Tariff, both the notes which head the chapters of the Common Customs Tariff and the Explanatory Notes to the Nomenclature of the Customs Cooperation Council are important means for ensuring the uniform application of the Tariff and as such may be regarded as useful aids to its interpretation (see the judgment in Joined Cases C-59/94 and C-64/94 Ministre des Finances v Pardo & Fils and Camicas [1995] ECR I-3159, paragraph 10).
14 In the present case, it is apparent from the wording of heading No 8471 that it covers automatic data-processing machines and units thereof. The units referred to in subheading No 8471 93 are storage units, whether or not presented with the rest of a system. The following subheadings list the various types of storage unit, including disk storage units, which are either optical or "other".
15 It appears from the case-file that the basic module lacks the necessary components for operation as a central processing unit, which is the characteristic element of the automatic data-processing machines referred to in heading No 8471, as defined by Note 5(A) to Chapter 84 of the Combined Nomenclature. It follows that the basic module cannot be classified as an automatic data-processing machine, either complete or incomplete, within the meaning of that heading.
16 It must therefore be considered whether the basic module satisfies the conditions for a "unit", as defined by Note 5(B) to Chapter 84 of the Combined Nomenclature. According to that note, a unit is part of a complete system of automatic data-processing machines if it meets two conditions: it must be connectable to the central processing unit either directly or through one or more other units, and it must be specifically designed as part of such a system.
17 The basic module at issue in the main proceedings does not meet those conditions. It is not to be connected to a central processing unit; rather, it is that unit which is to be incorporated into the basic module.
18 However, it is common ground that the disk drives contained in the modules would themselves be regarded as disk storage units and that, not being optical, they fall within subheading No 8471 93 59, "Disk storage units: Other". It is also common ground that each constituent of the basic module, such as the power supply, must itself be classified under subheading No 8471 99 90, "Other: Other", or subheading No 8473 30 90, "Parts and accessories of the machines of heading No 8471: Other".
19 Where, as in the present case, the product in question is prima facie classifiable under two headings and General Note 3(a) does not apply, General Rule 3(b) provides that products which consist of different components are to be classified according to the material or component which gives them their essential character.
20 That that rule applies in the present case is confirmed by note (IX) to Rule 3(b) in the Explanatory Notes to the Harmonized System. Although its components are separable, the basic module meets the conditions of that note, as a composite product made up of different components. Those components are adapted one to the other and are mutually complementary, together forming a whole whose components cannot normally be sold separately.
21 The essential character of the basic module must therefore be considered. According to note (VIII) to Rule 3(b) in the Explanatory Notes to the Harmonized System, that character may be determined inter alia by the nature of the material or component, its bulk, quantity, weight or value, or the role of a constituent material in relation to the use of the goods.
22 As the Advocate General observes in point 14 of his Opinion, the only criteria relevant in the present case are the value of the components and their role in relation to the use of the goods.
23 Since the basic module is intended for automatic data-processing, it must be held that the two disk drives give it its essential character and that the metal housing, display and operating features, power supply and connection cables are of only secondary importance.
24 The basic module must accordingly be classified under subheading No 8471 93 59, in the same way as the two disk drives.
25 The answer to Question 1 is therefore that on a proper construction of the Combined Nomenclature of the Common Customs Tariff, in the version annexed to Regulation No 2505/92 amending Annexes I and II to Regulation No 2658/87, a basic module for the assembly of a data-processing machine, consisting of a housing essentially containing two disk drives, is to be classified, pursuant to General Rule 3(b) for the interpretation of the Combined Nomenclature of the Common Customs Tariff, under subheading No 8471 93 59 as a "storage unit", on the basis of the drives it contains.
26 In view of the answer to Question 1, there is no need to answer Question 2.
Decision on costs
Costs
27 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 action 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 Bundesfinanzhof by order of 16 March 1995, hereby rules:
On a proper construction of the Combined Nomenclature of the Common Customs Tariff, in the version annexed to Commission Regulation (EEC) No 2505/92 of 14 July 1992 amending Annexes I and II to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff, a basic module for the assembly of a data-processing machine, consisting of a housing essentially containing two disk drives, is to be classified, pursuant to General Rule 3(b) for the interpretation of the Combined Nomenclature of the Common Customs Tariff, under subheading No 8471 93 59 as a "storage unit", on the basis of the drives it contains.