Judgment of the Court (First Chamber) of 5 April 1984. - Gustav Schickedanz KG v Oberfinanzdirektion Frankfurt am Main. - Reference for a preliminary ruling: Bundesfinanzhof - Germany. - Common Customs Tariff - Sports shoes. - Case 298/82.



European Court reports 1984 Page 01829



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

COMMON CUSTOMS TARIFF - HEADINGS - SPORTS SHOES WITH OUTER SOLES OF RUBBER AND UPPERS OF TEXTILE FABRIC - CLASSIFICATION UNDER SUBHEADING 64.02 B .

Summary

SPORTS SHOES WITH OUTER SOLES OF RUBBER AND UPPERS ENTIRELY OF TEXTILE FABRIC TO WHICH ARE SEWN ON , AT THE TOECAP , HEEL PIECE , EYELETS AND OUTSIDE AND INSIDE LATERAL SECTIONS , PIECES OF LEATHER WHICH COVER APPROXIMATELY 70 % OF THE TEXTILE FABRIC , ARE OF GREATER VALUE THAN THE TEXTILE FABRIC AND , BECAUSE OF THEIR FUNCTION AS PROTECTION AND SUPPORT AND THE SPECIAL WAY IN WHICH THEY ARE ATTACHED TO THE INNER SOLE , ARE OF VITAL IMPORTANCE IN THE USE OF THE GOODS AS SPORTS SHOES , MUST BE CLASSIFIED UNDER SUBHEADING 64.02 B OF THE COMMON CUSTOMS TARIFF .

Parties

IN CASE 298/82

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE BUNDESFINANZHOF ( FEDERAL FINANCE COURT ) FOR A PRELIMINARY RULING IN THE PROCEEDINGS PENDING BEFORE THAT COURT BETWEEN

GUSTAV SCHICKEDANZ KG , FURTH ,

AND

OBERFINANZDIREKTION FRANKFURT AM MAIN ,

Subject of the case

FOR A PRELIMINARY RULING ON THE INTERPRETATION AND VALIDITY OF COMMISSION REGULATION NO 1074/80 OF 29 APRIL 1980 , ON THE CLASSIFICATION OF GOODS UNDER SUBHEADING 64.02 B OF THE COMMON CUSTOMS TARIFF ( OFFICIAL JOURNAL 1980 , L 113 , P . 54 ), AND ON THE INTERPRETATION OF SUBHEADING 64.02 OF THE COMMON CUSTOMS TARIFF IN CONJUNCTION WITH GENERAL RULE 3 FOR THE INTERPRETATION OF THE NOMENCLATURE OF THE COMMON CUSTOMS TARIFF ,

Grounds

1 BY AN ORDER DATED 19 OCTOBER 1982 , WHICH WAS RECEIVED AT THE COURT ON 25 NOVEMBER 1982 , THE BUNDESFINANZHOF REFERRED SEVERAL QUESTIONS TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY ON THE INTERPRETATION AND VALIDITY OF COMMISSION REGULATION NO 1074/80 OF 29 APRIL 1980 , ON THE CLASSIFICATION OF GOODS UNDER SUBHEADING 64.02 B OF THE COMMON CUSTOMS TARIFF ( OFFICIAL JOURNAL 1980 , L 113 , P . 54 ), AND ON THE INTERPRETATION OF SUBHEADING 64.02 OF THE COMMON CUSTOMS TARIFF IN CONJUNCTION WITH GENERAL RULE 3 FOR THE INTERPRETATION OF THE NOMENCLATURE OF THE COMMON CUSTOMS TARIFF .

2 THE PLAINTIFF IN THE MAIN PROCEEDINGS , SCHICKEDANZ , IMPORTED FROM THE PEOPLE ' S REPUBLIC OF CHINA SHOES WHICH IT DESCRIBED AS ' ' GYM SHOES ' ' IN AN APPLICATION FOR A BINDING CUSTOMS TARIFF NOTIFICATION .

3 THE OBERFINANZDIREKTION ( PRINCIPAL REVENUE OFFICE ) FRANKFURT AM MAIN CLASSIFIED THE GOODS AS ' ' SPORTS SHOES ( TRAINING SHOES ) WITH OUTER SOLES OF RUBBER AND UPPERS OF TEXTILE FABRIC ' ' UNDER SUBHEADING 64.02 B , WHICH ATTRACTED IMPORT DUTY AT THE RATE OF 20% .

4 THE PLAINTIFF THEREUPON OBJECTED ON THE GROUND THAT , AS ' ' SPORTS SHOES WITH OUTER SOLES OF RUBBER AND UPPERS OF LEATHER ' ' , THE GOODS CAME UNDER SUBHEADING 64.02 A , WHICH ATTRACTED DUTY AT THE RATE OF 8% .

5 WHEN THAT OBJECTION WAS DISMISSED SCHICKEDANZ CHALLENGED THE DECISION OF THE OBERFINANZDIREKTION BEFORE THE BUNDESFINANZHOF , WHICH REFERRED THE FOLLOWING QUESTIONS TO THE COURT FOR A PRELIMINARY RULING :

1 . IS COMMISSION REGULATION ( EEC ) NO 1074/80 OF 29 APRIL 1980 TO BE INTERPRETED AS INCLUDING A SPORTS SHOE WITH A RUBBER OUTER SOLE , THE UPPER OF WHICH CONSISTS ENTIRELY OF TEXTILE FABRIC TO WHICH ARE STITCHED IN THE AREAS OF THE FRONT PART OF THE VAMP , HEEL PIECE , EYELETS AND OUTSIDE AND INSIDE LATERAL SECTIONS AND AS DECORATIVE STRIPS PIECES OF LEATHER WHICH COVER ABOUT 70% OF THE TEXTILE FABRIC , ACCOUNT FOR MORE OF THE VALUE OF THE UPPER THAN THE TEXTILE FABRIC AND ALSO , ON ACCOUNT OF THE PROTECTION AND SUPPORT WHICH THEY PROVIDE AND THE SPECIAL WAY IN WHICH THE UPPER IS BONDED TO THE INSOLE , ARE OF ESSENTIAL IMPORTANCE FOR THE USE OF THE PRODUCT AS A SPORTS SHOE?

2.IF THE ANSWER TO QUESTION 1 IS IN THE AFFIRMATIVE : IS REGULATION NO 1074/80 VALID?

3.IF EITHER QUESTION 1 OR QUESTION 2 IS ANSWERED IN THE NEGATIVE : IS SUBHEADING 64.02 OF THE COMMON CUSTOMS TARIFF , READ IN CONJUNCTION WITH GENERAL RULE 3 FOR THE INTERPRETATION OF THE NOMENCLATURE OF THE COMMON CUSTOMS TARIFF , TO BE INTERPRETED AS MEANING THAT SPORTS SHOES OF THE KIND DESCRIBED IN QUESTION 1 ARE TO BE CLASSIFIED UNDER SUBHEADING 64.02 B OF THE COMMON CUSTOMS TARIFF?

6 ACCORDING TO THE INFORMATION BEFORE THE COURT , THE SHOES IN QUESTION HAVE RUBBER SOLES AND UPPERS OF A MATERIAL CONSISTING OF TWO LAYERS OF TEXTILE FABRIC BETWEEN WHICH FOAM RUBBER IS SANDWICHED . THE LEATHER PIECES TO WHICH THE NATIONAL COURT REFERS ARE SEWN ON TO THE UPPER IN THE AREA OF THE TOECAP , HEEL PIECE , EYELETS AND THE OUTSIDE AND INSIDE LATERAL SECTIONS . THEY COVER SOME 70% OF THE TEXTILE FABRIC . ACCORDING TO THE NATIONAL COURT , THE LEATHER PIECES ARE OF GREATER VALUE THAN THE TEXTILE FABRIC AND BECAUSE OF THEIR FUNCTION AS PROTECTION AND SUPPORT AND THE SPECIAL WAY IN WHICH THEY ARE ATTACHED TO THE INNER SOLE THEY ARE OF VITAL IMPORTANCE IN THE USE OF THE GOODS AS SPORTS SHOES .

7 SUBHEADING 64.02 IS WORDED AS FOLLOWS :

' ' 64.02 FOOTWEAR WITH OUTER SOLES OF LEATHER OR COMPOSITION LEATHER ; FOOTWEAR ( OTHER THAN FOOTWEAR FALLING WITHIN HEADING NO 64.01 ) WITH OUTER SOLES OF RUBBER OR ARTIFICIAL PLASTIC MATERIAL :

A . FOOTWEAR WITH UPPERS OF LEATHER

B . OTHER . ' '

8 THUS THE CLASSIFICATION OF THE SHOES UNDER SUBHEADING A OR B DEPENDS ON THE MATERIAL OF WHICH THE UPPERS ARE MADE .

9 THE EXPLANATORY NOTES TO THE COMMON CUSTOMS TARIFF CONTAIN THE FOLLOWING PARTICULARS :

' ' THESE UPPERS MAY CONSIST OF A MIXTURE OF LEATHER AND OTHER MATERIALS . IN SUCH CASES , CLASSIFICATION IS DETERMINED BY APPLICATION OF GENERAL RULES 3 AND 5 FOR THE INTERPRETATION OF THE NOMENCLATURE OF THE COMMON CUSTOMS TARIFF , AND WILL NOT BE AFFECTED BY INNER PARTS SUCH AS LINING AND REINFORCEMENTS . ' '

10 RULE 3 OF THE GENERAL RULES FOR THE INTERPRETATION OF THE COMMON CUSTOMS TARIFF PROVIDES :

' ' WHEN . . . GOODS ARE , PRIMA FACIE , CLASSIFIABLE UNDER TWO OR MORE HEADINGS , CLASSIFICATION SHALL BE EFFECTED AS FOLLOWS :

( A ) . . .

( B)MIXTURES , COMPOSITE GOODS CONSISTING OF DIFFERENT MATERIALS OR MADE UP OF DIFFERENT COMPONENTS , AND GOODS PUT UP IN SETS , 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 . ' '

11 RULE 5 PROVIDES THAT THE SAME RULES APPLY MUTATIS MUTANDIS WHEN DETERMINING THE APPROPRIATE SUBHEADING WITHIN A HEADING .

12 IN A CASE WHERE THE EXTERNAL LAYER OF THE UPPER IS MADE ENTIRELY OF TEXTILE FABRIC TO WHICH PIECES OF LEATHER ARE ATTACHED IN DIFFERENT PLACES COVERING NO MORE THAN APPROXIMATELY 70% OF THE TEXTILE FABRIC AND THUS LEAVING THE REMAINDER OF THE EXTERNAL LAYER EXPOSED , THE COURT CONSIDERS THAT IT IS THE TEXTILE FABRIC WHICH GIVES THE UPPER ITS ESSENTIAL CHARACTER . THE INTRINSIC VALUE OF THE PIECES OF LEATHER IN RELATION TO THE TEXTILE FABRIC DOES NOT SUFFICE FOR A FINDING THAT IT IS THE LEATHER WHICH GIVES THE ESSENTIAL CHARACTER TO THE UPPER .

13 THE NATIONAL COURT CONSIDERS THAT THE PIECES OF LEATHER , BECAUSE OF THEIR FUNCTION AS PROTECTION AND SUPPORT AND THE MANNER IN WHICH THEY ARE ATTACHED TO THE INNER SOLE , ARE OF VITAL IMPORTANCE IN THE USE OF THE SHOES AS SPORTS SHOES . IN THAT RESPECT IT MUST BE OBSERVED THAT , EVEN IF THE PIECES OF LEATHER ARE OF IMPORTANCE IN THE USE OF SHOES , THE GOODS IN QUESTION MUST BE CLASSIFIED ON THE BASIS OF THE MATERIAL WHICH GIVES THE UPPER ITS ESSENTIAL CHARACTER AND NOT ON THE BASIS OF THE USE FOR WHICH THEY ARE INTENDED .

14 IT FOLLOWS FROM THOSE CONSIDERATIONS THAT THE ANSWER TO THE THIRD QUESTION MUST BE THAT THE GOODS DESCRIBED BY THE NATIONAL COURT ARE TO BE CLASSIFIED IN SUBHEADING 64.02 B .

15 IN VIEW OF THE ANSWER TO THE THIRD QUESTION THE FIRST TWO QUESTIONS CEASE TO BE RELEVANT .

Decision on costs

COSTS

16 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 PROCEEDINGS ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION BEFORE THE NATIONAL COURT , COSTS ARE A MATTER FOR THAT COURT .

Operative part

ON THOSE GROUNDS ,

THE COURT ( FIRST CHAMBER )

IN ANSWER TO THE QUESTIONS SUBMITTED TO IT BY THE BUNDESFINANZHOF BY AN ORDER DATED 19 OCTOBER 1982 , HEREBY RULES :

SPORTS SHOES WITH OUTER SOLES OF RUBBER AND UPPERS ENTIRELY OF TEXTILE FABRIC TO WHICH ARE SEWN ON , AT THE TOECAP , HEEL PIECE , EYELETS AND OUTSIDE AND INSIDE LATERAL SECTIONS , PIECES OF LEATHER WHICH COVER APPROXIMATELY 70% OF THE TEXTILE FABRIC , ARE OF GREATER VALUE THAN THE TEXTILE FABRIC AND , BECAUSE OF THEIR FUNCTION AS PROTECTION AND SUPPORT AND THE SPECIAL WAY IN WHICH THEY ARE ATTACHED TO THE INNER SOLE , ARE OF VITAL IMPORTANCE IN THE USE OF THE GOODS AS SPORTS SHOES , MUST BE CLASSIFIED UNDER SUBHEADING 64.02 B OF THE COMMON CUSTOMS TARIFF .