3.

Accordingly, since it is not possible to answer the second question to the effect that the Explanatory Notes to the Brussels Nomenclature are exclusively authoritative, the third question put by the Bundesfinanzhof must be examined. However, it is not necessary to ascertain general criteria for differentiating between the terms ‘food preparations’ and ‘chemical preparations’ (which the wording of the question might suggest). This would extend far beyond the cause of the present proceedings and moreover, as the plaintiff rightly points out, would be far from easy, in view of the diversity of the products in question. We must concentrate on products of the kind at issue in the main proceedings, that is to say, baking additives, and attempt to answer the question of differentiation with this limitation. You will remember the positions adopted by the parties on this question. On the one hand, there is the view of the Federal German Government and the Commission that the criteria applicable lead to the classification of the baking additive as food preparations. The plaintiff on the other hand advocates the application of a method whereby the baking additive imported by it must be classified as a chemical preparation. Let us see then how we can resolve this dispute. It seems suitable firstly to make a few observations regarding the texts of the Customs Cooperation Council which, as I have said, can be authoritative for the purposes of tariff classification. According to the explanatory notes to tariff heading 21.07 mentioned at the outset, food preparations are ‘preparations which are used because of their nutritional or flavouring properties in the making of beverages or foodstuffs’. The notes further state that (possibly of particular importance with regard to baking additives) the heading excludes ‘preparations which, because of their ingredients and the small proportions in which they are normally used, are clearly added for other purposes’. Accordingly the classification depends on the use, the specific effects and the quantity normally used. As against this, the 1967 classification opinions classify certain baking additives as food preparations. This was because they are used inter alia to a considerable extent in food, but also because of their essential composition. As you know, the Federal German Government and the Commission rely strongly on these classification opinions. In their view they should form the beginning of a new tariff classification practice to which the explanatory notes will have to be adjusted shortly. Two questions then arise from these notes. First, it must be considered whether the classification opinions, which, as more recent and more specific pronouncements, take precedence over the notes, also cover the products at issue in the main proceedings (in which case it would not be necessary to examine the views on interpretation submitted by the Commission derived in particular from the Community agricultural regulations and pointing in the same direction). Secondly, it must be asked whether the basic rules of the Brussels Explanatory Notes to tariff heading 21.07 or their exception clauses apply to baking additives of the kind at issue here (for the answer to this question, too, might make an examination of the considerations on tariff matters derived from the Community regulations superfluous). As you know, as far as the first question is concerned, the parties disagree. The plaintiff contended that the classification opinions related to a different case: the baking additives imported by it have a substantially different composition and are always used in small quantities only. Therefore the classification opinion could not be applied. The Federal German Government and the Commission, on the other hand, regard the differences as irrelevant. However, these disputed questions cannot be solved here, for they depend not only on problems concerning the proportions of additives required in use but also on the comparability of chemical components (namely, on the one hand, the mono- and diglycerides mentioned in the classification opinions, and, on the other hand, the diacetyl-tartaric-acid-ester described by the plaintiff as characteristic of Voltem). Nevertheless, such problems must be solved by the German court and accordingly, as I have mentioned, the examination of tariff classification may possibly be shortened. Accordingly, for the present purposes it only remains to hold that nothing can be extracted directly from the classification opinions for the solution of the proceedings before this Court. Thus with regard to the questions raised by the Federal German Government and the Commission in relation to the Brussels explanatory notes, the following observations must be made. If I understand correctly, the Federal German Government wishes to apply the first sentence of the Brussels explanatory notes relating to tariff heading 21.07 to the baking additive at issue because, as a pure emulsifying agent, it is also intended to improve the taste. However, it seems to me obvious that this argument cannot be sustained, for that sentence expressly mentions ‘properties of taste’(Geschmackseigenschaften), that is to say, qualities that the baking additive itself must have. Therefore, the argument of the Federal German Government can scarcely justify the tariff classification that it advocates. On the other hand, the Commission seems to have doubts about the applicability of the exceptional provisions in the Brussels explanatory notes, that is to say, the applicability of the sentence that states: ‘The heading however excludes all preparations which, because of their ingredients and the small proportions in which they are normally used, are clearly added for other purposes’. The Commission is not convinced that baking additives of the kind at issue here are clearly used for other reasons than because of their nutritive value or because of their qualities of taste. The Commission is, on the contrary, of the view that it is not possible to decide beyond all doubt for what reasons and to what extent such baking additives are used. Since Voltem is mainly composed of sugar and fat it is possible that it might be used to a greater extent in bakery products in the manufacture of which sugar and fat played a part, and thus might be used to improve the taste. The plaintiff emphatically disputes this and claims that if the characteristic component of Voltem, diacetyl-tartaric-acid-ester, is used in larger quantities it causes a deterioration in taste and therefore can only be used in small quantities. The fact that manufacturing costs for diacetyl-tartaric-acid-ester are considerably greater than those for sugar and fat and finally the fact that according to the national food law, diacetyl-tartaric-acid-ester is classified as an additive (‘Fremdstoff’) and is only permitted in limited amounts in certain bakery products, have the same effect. Nevertheless, the solution of this dispute, as is immediately obvious, must also be left to the German court. Thus, in other words, in view of the questions of fact in dispute, it cannot be held, within the scope of the proceedings for a preliminary ruling, that the considerations mentioned by the Commission with regard to the Brussels explanatory notes conclusively lead to a solution to the question of tariff classification in the sense advocated by the Commission. Thus it only remains to examine whether any provisions of Community law, as indicated in the second question, require the classification of baking additives as food preparations, contrary to the classification apparently suggested by the Brussels explanatory notes. We therefore reach the part of the examination which, in spite of the provisional authority in principle of the Brussels explanatory notes, will have to be carried out again on the basis of Community law. In this connexion there must certainly be left out of account Commission Regulation (EEC) No 107/70 of 21 January 1970 regarding the classification of products under tariff heading 21.07 F of the Common Customs Tariff, which now makes the tariff classification of preparations which are intended to be added to flour or dough for the manufacture of baking products dependent on quantitative criteria and in the event of a preponderance of food components classifies them under tariff heading 21.07 (food preparations). This regulation did not come into force until 30 January 1970 and therefore had not yet come into existence at the relevant period in the present proceedings. As the plaintiff rightly maintains, it cannot be applied retroactively. Moreover, in my opinion, the reference made by the Commission to the wording and meaning of the relevant tariff headings and their position in the tariff system must be rejected, for it can scarcely be said precisely in view of the identical Brussels Nomenclature, and in particular of the abovementioned explanatory notes and classification opinions, that safe conclusions in the sense of a definite interpretation could be drawn from that reference. Thus the only provision to be taken into account is Regulation No 160/66 of the Council laying down the trade arrangements for certain goods resulting from the processing of agricultural products which, in order to define its scope of application refers to certain headings of the Common Customs Tariff, including food preparations. Therefore, taking into account its object and the interests concerned we must ascertain whether the term ‘food preparations’ in relation to baking additives must be defined otherwise than in accordance with the Explanatory Notes to the Brussels Nomenclature. The Commission has convincingly described the purpose of the regulation. The special system of levies laid down in Regulation No 160/66 was instituted to protect the industry processing agricultural products and indirectly to protect agriculture. The necessity for it arose from the fact that manufacturers outside the Community can purchase the necessary agricultural products at lower world-market prices and thus have a competitive advantage over their competitors within the Common Market. If this was not taken into account extensive imports of processed agricultural products at favourable prices might considerably jeopardize the common organizations of the markets in agriculture. It may therefore be deduced from the interests concerned and the scheme of Regulation No 160/66 that the classification of a product depends not only on its suitability and purpose as food but also decisively on its food content. One can only be true to the meaning of the Regulation by including all goods which consist to a considerable extent of agricultural products and in which the proportion of agricultural products constitutes a factor determining the price. In this way, in fact, one arrives at the conclusion that quantitative criteria are authoritative, as both the Federal German Government and the Commission maintain. Thus the meaning and purpose of Regulation No 160/66 show that the criteria for the purposes of tariff classification that were subsequently expressly laid down in Regulation (EEC) No 107/70 of the Commission of 21 January 1970 are authoritative for baking additives. In other words, classification as a food preparation decisively depends on whether a product is used in food and is predominantly composed of food. The answer to the third question must be formulated accordingly. It will assist the German court, to deal with the tariff classification at issue if the clarification of the question connected with the abovementioned customs tariff notifications has not already provided a clear solution. Contrary to the plaintiff's view, it is not necessary to refer to the general tariff classification provisions of the Community (tariff classification according to the substance determining the character or according to the greatest similarity), for this would only be necessary if a classification were not possible on the basis of a systematic interpretation of the relevant provisions.