62004CJ0500_EN
Parties
Grounds
Operative part
Parties
In Case C-500/04,
REFERENCE for a preliminary ruling under Article 234 EC, from the Finanzgericht Düsseldorf (Germany), made by decision of 29 November 2004, received at the Court on 2 December 2004, in the proceedings
Proxxon GmbH
v
Oberfinanzdirektion Köln,
THE COURT (Sixth Chamber),
composed of A. La Pergola (Rapporteur), acting for the President of the Sixth Chamber, S. von Bahr and A. Borg Barthet, Judges,
Advocate General: C. Stix-Hackl,
Registrar: H. von Holstein, Deputy Registrar,
having regard to the written procedure and further to the hearing on 29 September 2005,
after considering the observations submitted on behalf of:
– Proxxon GmbH, by D. Ehle, Rechtsanwalt,
– the Luxembourg Government, by S. Schreiner and J.-C. Nilles, acting as Agents,
– the Commission of the European Communities, by J. Hottiaux and B. Schima, acting as Agents,
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 heading 8204 of the Combined Nomenclature (hereinafter ‘the CN’) 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 2388/2000 of 13 October 2000 (OJ 2000 L 264, p. 1, and corrigendum OJ 2000 L 276, p. 92).
2. The reference has been made in the course of proceedings between Proxxon GmbH (hereinafter ‘Proxxon’), established in Germany, and the Oberfinanzdirektion Köln (Principal Revenue Office, Cologne) regarding the classification in the CN of various hand-operated screwing tools, namely spanners and wrenches, spanner and wrench bits and screwdriver bits.
Legal context
3. The CN, established by Regulation No 2658/87, is based on the Harmonised Commodity Description and Coding System (hereinafter ‘the HS’) drawn up by the Customs Cooperation Council (now the World Customs Organisation), 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). It uses the 6-digit headings and subheadings in the HS and only the seventh and eighth digits making up the subdivisions are unique to it.
4. Chapter 82 of Section XV of Part II of the CN is entitled ‘Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal’.
5. As set out in the notes to that chapter:
‘1. … this chapter covers only articles with a blade, working edge, working surface or other working part of:
(a) base metal;
…
2. Parts of base metal of the articles of this chapter are to be classified with the articles of which they are parts, except parts 	separately specified as such and tool-holders for hand tools (heading No 8466) …’.
6. Heading 8204 in Chapter 82 reads as follows: ‘Hand-operated spanners and wrenches (including torque meter wrenches but not including tap wrenches); interchangeable spanner sockets, with or without handles’.
7. Heading 8205 which appears in the same chapter is worded thus: ‘Hand tools (including glaziers’ diamonds), not elsewhere specified or included; blow lamps; vices, clamps and the like, other than accessories for and parts of, machine tools; anvils; portable forges; hand or pedal-operated grinding wheels with frameworks’.
8. Heading 8206 in Chapter 82 is worded as follows: ‘Tools of two or more of heading Nos 8202 to 8205 put up in sets for retail sale’.
9. Heading 8207, which is also in the same chapter, is worded thus: ‘Interchangeable tools for hand tools, whether or not power-operated, or for machine-tools (for example, for pressing, stamping, punching, tapping, threading, drilling, boring, broaching, milling, turning or screw driving), including dies for drawing or extruding metal, and rock drilling or earth boring tools’.
10. That last heading includes subheading 8207 90 30, which is worded as follows: ‘Screwdriver bits’.
11. According to the general rules for the interpretation of the CN, which are set forth in Part I, Title I A thereof (hereinafter ‘the general rules’):
‘Classification of goods in the [CN] shall be governed by the following principles:
1. The titles of sections, chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the following provisions.
...
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;
(c) When goods cannot be classified by reference to 3(a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.’
The main proceedings and the questions referred for a preliminary ruling
12. Proxxon imports hand-operated screwing tools from non-member States into Germany and other Member States. Those tools are imported either in boxes containing a set of several items or separately.
13. Following a customs verification carried out in Germany, Proxxon asked the Oberfinanzdirektion Köln for binding tariff information regarding a series of spanners and wrenches, spanner and wrench bits and screwdriver bits. In that connection, it had proposed that those goods be classified under heading 8204 of the CN. The defendant in the main action issued 13 pieces of binding tariff information, classifying the tools imported by Proxxon under various tariff headings according to their type and composition, namely headings 8205, 8206 and 8207 of the CN.
14. Proxxon lodged objections against that binding tariff information. By decision of 9 October 2002, the defendant in the main proceedings dismissed those objections as unfounded. Proxxon challenged that decision before the Finanzgericht Düsseldorf on the ground that all the tools at issue in the main proceedings should have been classified under heading 8204 of the CN.
15. The Finanzgericht Düsseldorf decided to stay proceedings and refer the following questions to the Court for a preliminary ruling:
‘1. Do separately imported screwdriver ends with square drive for slotted-head, cross-head, TX (internal Torx) and hexagon socket head screws, of the type described in the order, fall within heading 8204?
2. Do separately imported parts of the square system described in the order, which are not in direct contact with the fastener (nut, screw) during use, fall within heading 8204?
3. Do separately imported square-system torque meter wrenches of the type described in the order fall within heading 8204?’
The questions referred for a preliminary ruling
Initial observation
16. In its written observations, the Luxembourg Government is essentially asking the Court to classify ‘certain sets’, which are referred to by the national court in the order for reference, by applying general rule 3(b), under heading 8466 10 or, failing that, under heading 8204 of the CN.
17. In that regard, it is clear from settled case-law that the procedure provided for in Article 234 EC is an instrument of cooperation between the Court of Justice and national courts by means of which the former provides the latter with interpretation of such Community law as is necessary for them to give judgment in cases upon which they are called to adjudicate. It follows that it is for the national courts alone which are seised of the case and are responsible for the judgment to be delivered to determine, in view of the special features of each case, both the need for a preliminary ruling in order to enable them to give their judgment and the relevance of the questions which they put to the Court (see, in particular, Joined Cases C-297/88 and C-197/89 Dzodzi
[1990] ECR I-3763, paragraphs 33 and 34; Case C-231/89 Gmurzynska-Bscher
[1990] ECR I-4003, paragraphs 18 and 19; and Case C-403/98 Monte Arcosu
[2001] ECR I-103, paragraph 21).
18. In the present case, the national court has restricted the factual context of the questions submitted for a preliminary ruling solely to goods which are ‘separately imported’. There is therefore no need to go outside the context defined by the national court or to establish, as suggested by the Luxembourg Government, the tariff classification of certain sets of those goods.
The first question
Observations submitted to the Court
19. Proxxon submits that the goods referred to in the first question must be classified under heading 8204 of the CN. It contests the categorisation, upheld by the national court, of its goods as ‘screwdriver bits’. According to Proxxon, the spanner and wrench bits and screwdriver ends at issue in the main proceedings have to be classified on the basis of the fact that they are known as ‘female’ (that is to say, they grip the fastener) or ‘male’ (that is to say, they are inserted into the fastener). Proxxon submits that heading 8204 of the NC does not make a distinction between the items concerned according to whether the bits grip the fastener or are inserted into it. Proxxon also considers that the specific feature of the goods at issue in the main proceedings lies in their interchangeability, because of the possibility of fitting together the spanners and wrenches, and the ‘male’ and ‘female’ spanner and wrench bits or screwdriver ends. Furthermore, all the tools at issue in the main proceedings have the same intended use – which is an objective criterion of tariff classification – namely tightening or slackening threaded screws with different types of screw head, with the aid of a matching set of hand-operated screwing tools. Lastly, Proxxon submits that subheading 8207 90 30 of the CN relates only to interchangeable screwdriver bits, which are used in particular in simple hand-operated tools such as those described in heading 8205, whilst heading 8204 concerns ‘tools utilising spanners and wrenches’.
20. The Commission of the European Communities submits that the goods referred to in the first question have to be classified under heading 8207 of the CN. They were described by the national court as ‘screwdriver bits’. Subheading 8207 90 30 of the CN deals specifically with ‘screwdriver bits’. Furthermore, the Commission considers that, in the light of that specific subheading, making the classification of the goods at issue in the main proceedings dependent on the classification of the tool in which they are used is, in the end, at variance with the objective which the creation of that subheading seeks to attain.
Reply of the Court
21. According to settled case-law, 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 CN and of the notes to the sections or chapters (see, inter alia, Case C-42/99 Eru Portuguesa
[2000] ECR I-7691, paragraph 13; Case C-495/03 Intermodal Transports
[2005] ECR I-0000, paragraph 47; and Case C-445/04 Possehl Erzkontor
[2005] ECR I-0000, paragraph 19).
22. The explanatory notes to the CN and those to the HS are an important aid to the interpretation of the scope of the various tariff headings but do not have legally binding force. The content of those notes must therefore be compatible with the provisions of the CN and may not alter the meaning of those provisions ( Intermodal Transports, paragraph 48, and Possehl Erzkontor, paragraph 20).
23. When the Court is requested to give a preliminary ruling on a matter of tariff classification, its task is to provide the national court with guidance on the criteria which will enable the latter to classify the products at issue correctly in the CN, rather than to effect that classification itself, a fortiori since the Court does not necessarily have available to it all the information which is essential in that regard. In any event the national court is in a better position to do so (Joined Cases C-260/00 to C-263/00 Lohman and Medi Bayreuth
[2002] ECR I-10045, paragraph 26).
24. The procedure for referring questions for a preliminary ruling which is provided for in Article 234 EC establishes a relationship of close cooperation between the national courts and the Court of Justice based on the assignment to each of different functions (Case C-236/98 JämO
[2000] ECR I-2189, paragraph 30) and constitutes an instrument by means of which the Court provides the national courts with interpretation of such Community law as is necessary for them to give judgment in cases upon which they are called to adjudicate ( Monte Arcosu, paragraph 21, and Lohman and Medi Bayreuth, paragraph 27).
25. In the case in the main proceedings, the national court described the goods at issue as ‘screwdriver bits’. That description is the consequence of a simple finding of fact which it is not for the Court to call into question in the context of a reference for a preliminary ruling. Furthermore, it is enough to observe that the national court is not asking the Court to rule on the description of the screwdriver ends as it restricts itself to referring a question about their tariff classification.
26. According to the general rules, the heading which provides the most specific description is to be preferred to headings providing a more general description ( Possehl Erzkontor, paragraph 21). In this respect, note 2 to Chapter 82 of the CN provides that parts of base metal of the articles of that chapter are to be classified with the articles of which they are parts, except parts separately specified as such.
27. As the Commission points out, it is clear that subheading 8207 90 30 of the CN specifically refers to ‘screwdriver bits’. Furthermore, as such bits are always used in other tools, making their classification dependent on that of those tools is at variance with the objective which the creation of a specific subheading seeks to attain. Such a solution effectively renders subheading 8207 90 30 of the CN completely redundant.
28. In the light of the foregoing, the answer to the first question must be that heading 8204 of the CN is to be interpreted as not covering separately imported screwdriver ends with square drive for slotted-head, cross-head, TX (internal Torx) and hexagon socket head screws, as described in the order for reference.
The second question
Observations submitted to the Court
29. Proxxon submits that the parts of the square system, as described in more detail in the order, fall within heading 8204 of the CN. The question as to whether the connecting pieces are in direct contact with the screws or nuts cannot constitute an objective differentiating characteristic or therefore a criterion for tariff classification. Furthermore, those connecting pieces, even separately imported, form parts of a system and can be used only in connection with it. Lastly, they are not mentioned in any other heading in Chapter 82 of the CN.
30. The Commission, like Proxxon, considers that the goods referred to in the second question fall within heading 8204 of the CN. Given the function of those connecting pieces (as components of the square system and in so far as they are capable of holding different bits), a classification of those goods as screwdriver bits within the meaning of heading 8207 of the CN should not be accepted. Furthermore, those goods are capable of holding spanner sockets which are, themselves, expressly referred to in heading 8204 of the CN. Lastly, referring to note 2 to Chapter 82 of the CN, the Commission points out that parts of the articles in that chapter are to be classified with the articles of which they are parts.
Reply of the Court
31. It must be borne in mind that, according to the Court’s case-law, the intended use of a product may constitute an objective criterion in relation to tariff classification if it is inherent in the product, and such inherent character must be capable of being assessed on the basis of the product’s objective characteristics and properties (see, inter alia, Case C-201/99 Deutsche Nichimen
[2001] ECR I-2701, paragraph 20; Case C-130/02 Krings
[2004] ECR I-2121, paragraph 30; and Case C-467/03 Ikegami
[2005] ECR I-2389, paragraph 23).
32. As has been observed by Proxxon and the Commission, the parts of the square system, described in the order for reference, come within the scope of heading 8204 of the CN. Those parts are capable of holding spanner sockets; the latter, with or without handles, are expressly referred to by that heading. Furthermore, in accordance with note 2 to Chapter 82 of the CN, ‘parts of base metal of the articles of this chapter are to be classified with the articles of which they are parts’, which means that a connecting piece situated between the handle or the driver and a spanner socket has to be classified in the same way as the spanner socket itself.
33. In the light of the foregoing, the answer to the second question referred must be that heading 8204 of the CN is to be interpreted as covering separately imported parts of the square system, as described in the order for reference, which are not in direct contact with the fastener during use.
The third question
Observations submitted to the Court
34. Proxxon, the Commission and the Luxembourg Government submit that torque meter wrenches fall within heading 8204 of the CN since that heading expressly refers to that type of tool.
Reply of the Court
35. It is clear that heading 8204 of the CN expressly mentions torque meter wrenches.
36. As the Commission points out – in drawing attention to the finding made by the national court – torque meter wrenches are characterised by their ability to hold bits of different kinds, including screwdriver bits. Furthermore, nothing precludes the concept of torque meter wrench mentioned under heading 8204 of the CN from also covering goods which are normally so designated in trade if those goods have the objective characteristic of being capable of holding interchangeable tools and they are used to facilitate the process of screwing.
37. In the light of the foregoing, the answer to the third question must be that heading 8204 of the CN is to be interpreted as covering separately imported square-system torque meter wrenches of the type described in the order for reference.
Costs
38. 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 (Sixth Chamber) hereby rules:
1. Heading 8204 of 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 2388/2000 of 13 October 2000, is to be interpreted as not covering separately imported screwdriver bits with square drive for slotted-head, cross-head, TX (internal Torx) and hexagon socket head screws, as described in the order for reference.
2. Heading 8204 of the Combined Nomenclature is to be interpreted as covering separately imported parts of the square system, as described in the order for reference, which are not in direct contact with the fastener during use.
3. Heading 8204 of the Combined Nomenclature is to be interpreted as covering separately imported square-system torque meter wrenches of the type described in the order for reference.