61976C0108
OPINION OF MR ADVOCATE-GENERAL REISCHL
DELIVERED ON5 MAY 1977 (
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Mr President,
Members of the Court,
The reference for a preliminary ruling which concerns us today relates to the interpretation of certain headings of the Common Customs Tariff. The Bundesfinanzhof has requested this interpretation in order to judge the correctness of a binding customs tariff notification which was issued to the plaintiff in the main action on 16 July 1974 by the Oberfinanzdirektion München.
That notification relates to a steel object used in mining and described as a ‘Ferromatik-Schildausbau’ (ferromatic shield assembly). For a detailed description of it and its mode of operation I would refer the Court to the order making the reference. Here I will mention only that its main purpose is to protect the area of the mine face from falling rock. The appliance (and I am not using this term in the technical sense used by the customs) moves under its own power by means of a hydraulic device which however, it is said, is not to be imported. If the article is used for winning by cutting, and this is obviously its main use, it is equipped in addition with a conveyor under-frame. The latter supports, inter alia, the winning machines and is likewise progressively shifted forward.
The said notification classified this article under subheading 84.59 E (‘Machines and mechanical appliances, having individual functions, not falling within any other heading of this Chapter: … E. Other …’). The Oberfinanzdirektion considered the decisive factor to be the presence of mechanical components and in particular the fact that it is a hydraulically operated device which follows the winning machines at the mine face under its own power. Moreover, the defendant considered it significant that the article can be equipped with a conveyor under-frame and can thus adopt the function of an advancing device for winning machines. Accordingly, it was considered to fall under Chapter 84 (‘Boilers, machinery and mechanical appliances; parts thereof’) and within this chapter under subheading 84.59 E, since it fell under no other specific heading. On the other hand, the Oberfinanzdirektion did not consider it decisive that the article is a further development of the conventional support for mine tunnels, which certainly falls under tariff heading 73.21, covering ‘Structures and parts of structures (for example, hangars and other buildings, bridges and bridge sections, lock gates, towers, lattice masts, roofs, roofing frameworks, door and window frames, shutters, balustrades, pillars and columns), of iron or steel; plates, strip, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron or steel’. Nor did the Oberfinanzdirektion think it important that the Committee on Common Customs Tariff Nomenclature in a Tariff Decision of 9 June 1972 classified hydraulic pit-props as steel structures coming under tariff heading 73.21. It is said to have been possible to do this because the said articles remain stationary while in use and the hydraulic system serves simply to facilitate erection and dismantling of the pit-prop. Finally, the Oberfinanzdirektion considered that there was no comparison with moving bridges, which also fall under tariff heading 73.21, since such bridges rest on foundations and do not require a supply of motive energy.
On the other hand, Klockner-Ferromatic GmbH, to whom the customs tariff notification was issued, takes the view that the article, at least if not attached to winning machines, should be classified under tariff heading 73.21. The element of movement cannot be decisive since the said tariff heading does not cover only stationary structures. This is illustrated by the example of moving bridges and hydraulic pit-props, to which the article in question here is very similar from the point of view of its function. But even assuming that the appliance is to be regarded as machinery, classification under Chapter 84 does not automatically follow. According to the Brussels Explanatory Notes, that chapter covers only machinery which is not more specifically covered by other chapters, which is in fact the case according to tariff heading 73.21. Finally, the classification of the German patent supports classification under heading 73.21, since for the purposes of patent law the article falls within the concept ‘face supports’ and may be regarded as equipment similar to pit-props. For these reasons Klockner-Ferromatik GmbH brought an action before the Bundesfinanzhof contesting the binding customs tariff notification.
The Bundesfinanzhof does not consider it to be clear which of the tariff headings 73.21, 84.23 or 84.59 applies in the present case. It is not certain whether the article can in fact be described as a mechanical appliance. For the Bundesfinanzhof it is significant that the forward transportation of mining machinery — which is a factor which might prompt thoughts of machinery for transporting material — is only a side-effect. If classification under Chapter 84 is decided upon the Bundesfinanzhof is moreover not clear whether it is to be under subheading 84.59 E or, since the article is intended for mining, under heading 84.23. In view of these doubts it stayed the proceedings and by order dated 26 October 1976 referred the following questions for a preliminary ruling:
1.
Is the term ‘structure’ in tariff heading 73.21 of the Common Customs Tariff to be interpreted so as to include also an article which is intended to render the mine face safe in mining and inter alia is equipped in such a way that it and mining machinery placed on a part of it can be moved forward step by step by means of incorporated hydraulic cylinders and a motorized pump unit which is separately installed?
2.
If question 1 is answered in the negative: does tariff heading 84.23 of the Common Customs Tariff include only such machinery and appliances for mining as are intended to work the earth directly?
In view of the detailed written and oral observations made by the Commission and the further explanations given by the plaintiff at the hearing the following conclusions may be drawn:
1.
With regard to the first question, reference should be made first of all to Note 1 (f) to Section XV (within which heading 73.21 also falls) in which it is stated: ‘This section does not cover: … (f) Articles falling within Section XVI (machinery, mechanical appliances and electrical goods)’. Since, according to Rule 1 of the Rules for the Interpretation of the Nomenclature, the Section Notes determine classification, the heading of Section XVI (‘Machinery and mechanical appliances; electrical equipment; parts thereof’) is important with regard to Section XV.
The Commission has demonstrated, convincingly in my view, with reference to the relevant texts, that the mobility factor, a constant process of mechanical movement, is characteristic of machinery in its diverse forms and of mechanical appliances. The term ‘Apparat’ (device) is even wider and according to those observations covers all tools used for the conversion of energy.
The significant feature of structures, which are referred to in tariff heading 73.21. is that they are stationary, that is to say that, in principle, they remain permanently at rest. This is in fact apparent from the examples given in heading 73.21 and is confirmed by the Explanatory Notes to the Brussels Nomenclature in relation to heading 73.21 which are of direct relevance for the interpretation of the Common Customs Tariff in view of the reference thereto in the Explanatory Notes. This is not altered by the fact that in the Explanatory Notes there is mention of ‘adjustable or telescopic props and similar equipment’. The said characteristic facilitates simply the bringing into position; when in position, however, support structures remain stationary. The mobility achieved does not influence the nature of support structures as ‘equipment’, and in this connexion it should not be overlooked that Chapter 73 is a ‘materials’ chapter, which distinguishes articles mainly on the basis of the materials of which they are composed.
Against the background of these basic facts it is important to note in the present case that the appliance to which the contested notification relates is an article which, as appears from the description, is characterized by the fact that it moves by mechanical means. It is equipped with a special arrangement of hydraulic components, resulting in an interplay of hydraulic forces. The individual hydraulic processes complement each other; as a result, all parts of the machinery are designed to allow for movement. Since the appliance accompanies the mining work under its own power it cannot be said that it is intended to remain stationary. Moreover, its permanent mobility enables the independent carriage of winning machines, to which, clearly, it is usually attached. Even if movement on each occasion lasts only a short while, as the plaintiff emphasized at the hearing, the fact that it is capable of movement must nevertheless be regarded as characteristic. It can accordingly not be said that, as is usual with structures, the stationary factors dominate, and seen in this light more is to be said for classifying the article under Chapter 84 rather than under heading 73.21.
The Tariff Decision of 9 June 1972, according to which hydraulically extendable pit-props fall under tariff heading 73.21, is not decisive. The Commission has rightly pointed out that that classification was based on the preponderance given to the material of which they are made, whereas their mechanical nature was obviously of secondary importance.
In the same way it is irrelevant that in the said Explanatory Notes to the Brussels Nomenclature relating to tariff heading 73.21 in connexion with adjustable or telescopic pit-props there is mention of ‘similar equipment.’ Since, as has been shown, the stationary factor is characteristic of tariff heading 73.21 similarity is a question of such properties and in this connexion the hydraulic factors are not a criterion.
Reference to moving bridges which fall under heading 73.21 is also certainly unconvincing. The criterion for their classification is that the stationary structural elements preponderate, mobility not being the dominant feature.
Finally, it should also be obvious that in this context no account can be taken of the provisions of patent law. The Commission has rightly observed that patent law and customs law are different areas of law, the rules of each having their own objectives, and that it is therefore not appropriate to draw inferences from classifications under patent law in relation to questions of tariff classification.
If, as appears appropriate for the classification of borderline cases, the criterion is taken to be the dominant characteristics, then in view of all this the first question can be answered only to. the effect that the article with which we are concerned here does not come under the concept ‘structure’ within the meaning of tariff heading 73.21 because its characteristic feature is not the stationary element but its mobility.
2.
The second questions of the Bundesfinanzhof requests an interpretation of tariff heading 84.23 and clarification as to whether it includes only such machinery and appliances for mining as are intended to work the earth directly.
The necessary observations on this can be brief. The correctness of the Commission's observations, to the effect that only machinery which is intended to work the earth directly falls under heading 84.23, cannot be doubted.
The wording of tariff heading 84.23 is as follows: ‘Excavating, levelling, tamping, boring and extracting machinery, stationary or mobile, for earth, minerals or ores (for example, mechanical shovels, coal-cutters, excavators, scrapers, levellers and bulldozers); pile-drivers; snowploughs, not self propelled (including snow-plough attachments)’.
If the articles listed in this tariff heading are looked at as a whole, then it is striking that all the other machinery and so forth listed is characterized by its capacity to work matter, for example the earth, directly. Above all, the articles mentioned as examples all come within the class of machinery ‘for attacking’. Accordingly, it seems obvious to infer the same thing in respect of mining machinery, that is not to assume that the heading allows in connexion with mining a class of article more extensive than this. Although the German version of the Tariff heading may give rise to doubts, they are removed if the wording in English, French, Italian and Dutch is considered. The Commission has clearly demonstrated this in detail both in writing and orally. Moreover, this interpretation is supported by the Explanatory Notes to the Brussels Nomenclature in respect of tariff heading 84.23, where it is stated: ‘This heading covers machinery, other than agricultural machinery (heading 84.24), for “attacking” the earth's crust (e.g.: for cutting and breaking down rock, earth, coal, etc.; earth excavation, digging, drilling, etc.), or for preparing or compacting the terrain (e.g., scraping, levelling, grading, tamping or rolling)’.
Having regard to the fact that the article in question in the main action is capable of attachment to winning machines and that this in fact appears to be the rule, it may accordingly be observed that its classification may be considered under tariff heading 84.23, at least if it forms a technical unit which is intended for the work of winning. In this respect, moreover, Note 2 (b) to Section XVI of the Common Customs Tariff may be significant; Note E of the Explanatory Notes to the Brussels Nomenclature in respect of tariff heading 84.23 also appears to point to this conclusion.
If there is however no direct attachment to winning machines then there is only one possible classification under Chapter 84, namely under subheading 84.59 E which represents a kind of catch-all provision.
3.
All this leads me to propose the following answer to the questions raised by the Bundesfinanzhof:
(a)
The terms ‘structure’ within the meaning of tariff heading 73.21 of the Common Customs Tariff rules out the possibility of classifying under that heading articles which, although intended to render the mine face safe in mining, nevertheless, by reason of their complex mechanical components and their consequent ability to advance independently by means of an external motor system, should be classified as machinery or mechanical appliances within the meaning of Section XVI of the Common Customs Tariff.
(b)
If such articles are directly attached to mining machinery for attacking the earth's crust they fall under tariff heading 84.23 of the Common Customs Tariff. If this is not the case, they must be classified under subheading 84.59 E of the Common Customs Tariff.
(
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)	Translated from the German.