Judgment of the Court (Second Chamber) of 16 December 1976. - Industriemetall Luma GmbH v Hauptzollamt Duisburg. - Reference for a preliminary ruling: Finanzgericht Düsseldorf - Germany. - Common customs tariff. - Case 38-76.



European Court reports 1976 Page 02027

Greek special edition Page 00763

Portuguese special edition Page 00831



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

1 . COMMON CUSTOMS TARIFF - INTERPRETATION - CLASSIFICATION OF GOODS - CRITERIA - OBJECTIVE CHARACTERISTICS

2 . COMMON CUSTOMS TARIFF - INTERPRETATION - CLASSIFICATION OF GOODS - CLASSIFICATION ON THE BASIS OF COMPOSITION - CLASSIFICATION BY ANALOGY NOT APPLICABLE

( COMMON CUSTOMS TARIFF , RULE NO 4 OF GENERAL RULES FOR THE INTERPRETATION OF THE NOMENCLATURE )

3 . COMMON CUSTOMS TARIFF - TARIFF CLASSIFICATION - COMPOUND PRODUCT - MELTED DOWN SCRAP

( COMMON CUSTOMS TARIFF , CHAPTER 73 , NOTE 1 ( C ))

Summary

1 . WHILST THE COMMON CUSTOMS TARIFF DOES INDEED IN CERTAIN CASES CONTAIN REFERENCES TO MANUFACTURING PROCESSES AND TO THE USE FOR WHICH GOODS ARE INTENDED IT IS GENERALLY PREFERRED , IN THE INTERESTS OF LEGAL CERTAINTY AND EASE OF VERIFICATION , TO EMPLOY CRITERIA FOR CLASSIFICATION BASED ON THE OBJECTIVE CHARACTERISTICS AND PROPERTIES OF PRODUCTS WHICH CAN BE ASCER- TAINED WHEN CUSTOMS CLEARANCE IS OBTAINED .

2 . WHEN A PRODUCT CAN BE CLASSIFIED UNDER A SPECIFIC TARIFF HEADING ON THE BASIS OF ITS COMPOSITION , THERE IS NO FURTHER POSSIBILITY OF CLASSIFICATION BY ANALOGY WITHIN THE MEANING OF RULE NO 4 OF THE GENERAL RULES FOR THE INTERPRETATION OF THE NOMENCLATURE , SINCE SUCH A CLASSIFICATION CAN ONLY BE CONSIDERED , ACCORDING TO THAT RULE , IN RELATION TO GOODS NOT FALLING WITHIN ANY HEADING OF THE TARIFF .

3 . HEADING 73.02 OF THE COMMON CUSTOMS TARIFF ALSO INCLUDES MELTED DOWN SCRAP ( MATERIAL FOR RE-MELTING ) WHICH SATISFIES THE PHYSICAL REQUIREMENTS LAID DOWN IN NOTE 1 ( C ) TO CHAPTER 73 OF THE COMMON CUSTOMS TARIFF .

Parties

IN CASE 38/76

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE FINANZGERICHT DUSSELDORF FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN

INDUSTRIEMETALL LUMA GMBH , A LIMITED LIABILITY COMPANY HAVING ITS REGISTERED OFFICE IN DUSSELDORF ,

AND

HAUPTZOLLAMT DUISBURG ( PRINCIPAL CUSTOMS OFFICE , DUISBURG ),

Subject of the case

ON THE INTERPRETATION OF HEADING 73.02 G READ IN CONJUNTION WITH NOTE 1 ( C ) ( NO 73.02 ) OF THE COMMON CUSTOMS TARIFF

Grounds

1 BY AN ORDER OF 9 APRIL 1976 WHICH WAS RECEIVED AT THE COURT REGISTRY ON 30 APRIL 1976 THE FINANZGERICHT DUSSELDORF SUBMITTED TO THE COURT OF JUSTICE UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION ON THE INTERPRETATION OF HEADING 73.02 OF THE COMMON CUSTOMS TARIFF , ' FERRO-ALLOYS ' , IN ORDER TO DEFINE THAT HEADING IN RELATION TO HEADING 73.15 B I ( B ) 1 ( AA ) ' WASTE OR SCRAP IN INGOT FORM ' OF ALLOY STEEL ( A HEADING WHICH PERTAINS TO THE ECSC TREATY ).

2 IT APPEARS FROM THE INFORMATION SUPPLIED BY THE NATIONAL COURT THAT THE PLAINTIFF IN THE MAIN ACTION HAS FOR SOME YEARS IMPORTED FROM THE UNITED KINGDOM RE-MELTED FERROUS SCRAP CONTAINING TUNGSTEN , IN THE FORM OF ' LUMPS ' HAVING A TUNGSTEN CONTENT OF APPROXIMATELY 30 % AND A COBALT CONTENT OF BETWEEN 5 AND 10 % .

SINCE THE TARIFF CLASSIFICATION OF THIS PRODUCT HAD LONG BEEN IN DISPUTE IT WAS CLASSIFIED BY AN OPINION OF THE COMMITTEE ON COMMON CUSTOMS TARIFF NOMENCLATURE ADOPTED ON 20 OCTOBER 1970 UNDER ARTICLE 2 OF REGULATION NO 97/69 OF 16 JANUARY 1969 ( OJ , ENGLISH SPECIAL EDITION 1969 ( I ), P . 12 ) IN ACCORDANCE WITH RULE NO 4 OF THE GENERAL RULES FOR THE INTERPRETATION OF THE NOMENCLATURE , APPEARING AT SECTION I A OF THE PRELIMINARY PROVISIONS OF THE TARIFF , UNDER TARIFF SUBHEADING 73.15 B I ( B ) 1 ( AA ), AS BEING AKIN TO THE ' WASTE OR SCRAP IN INGOT FORM ' MENTIONED IN THAT HEADING .

3 ON 23 MARCH 1972 , THE PLAINTIFF OBTAINED CUSTOMS CLEARANCE FOR A CONSIGNMENT OF RE-MELTED SCRAP CONTAINING TUNGSTEN WHICH THE CUSTOMS OFFICE UNDERTAKING CLEARANCE CLASSIFIED WITHOUT CARRYING OUT A CHECK UNDER SUBHEADING 73.15 B I ( B ) 1 ( AA ), WHICH IS FREE FROM DUTY .

SINCE A SUBSEQUENT EXAMINATION SHOWED THAT THE GOODS CONTAINED IN ADDITION TO APPROXIMATELY 30 % OF TUNGSTEN MORE THAN 10 % OF COBALT THE CUSTOMS OFFICE ADOPTED A DECISION OF AMENDMENT WHEREBY THE GOODS WERE CLASSIFIED AS ' FERRO-ALLOYS ' UNDER TARIFF HEADING 73.02 G , BEARING A DUTY OF 7 % , AND CONSEQUENTLY CLAIMED THE CUSTOMS DUTY APPROPRIATE TO THAT CLASSIFICATION .

WHEN THE PLAINTIFF IN THE MAIN ACTION LODGED A COMPLAINT THIS CLASSIFICATION DECISION WAS CONFIRMED BY THE HAUPTZOLLAMT DUISBURG , THE DEFENDANT IN THE MAIN ACTION .

4 THE PLAINTIFF IN THE MAIN ACTION FOUNDS ITS ACTION IN PARTICULAR ON THE FACT THAT THE ' FERRO-ALLOYS ' MENTIONED IN HEADING 73.02 ARE MANUFACTURED FROM NEW METALS OR ORES BY TECHNICAL PROCESSES ENSURING THAT CERTAIN ALLOY ELEMENTS ARE PRESENT IN CONSTANT , PRECISELY-DETERMINED PROPORTIONS , WHEREAS THE PRODUCT IMPORTED BY THE PLAINTIFF , WHICH WAS OBTAINED THROUGH THE UNSOPHISTICATED PROCESS OF MELTING TOGETHER WASTE AND SCRAP , IS NOT VERY CONSTANT IN ITS COMPOSITION AND THE PRESENCE OF COBALT IN EXCESS OF THE LIMIT OF 10 % IN THE CONSIGNMENT OF GOODS WHOSE TARIFF CLASSIFICATION IS IN DISPUTE THUS CONSTITUTES A PURELY FORTUITOUS CIRCUMSTANCE .

THE DEFENDANT CUSTOMS OFFICE INVOKES IN ITS DEFENCE OF THE CONTESTED DECISION NOTE 1 ( C ) TO CHAPTER 73 OF THE COMMON CUSTOMS TARIFF , FROM WHICH IT FOLLOWS THAT THE PRESENCE OF COBALT IN EXCESS OF THE LIMIT OF 10 % IN THE CONSIGNMENT IN QUESTION MEANS THAT THE IMPORTED GOODS MUST BE CLASSIFIED UNDER HEADING 73.02 .

IN SUCH A CASE IT IS SAID TO BE INAPPROPRIATE TO APPLY THE PROCEDURE OF CLASSIFICATION BY ANALOGY ADOPTED BY THE COMMITTEE ON COMMON CUSTOMS TARIFF NOMENCLATURE IN ITS OPINION OF 20 OCTOBER 1970 SINCE IT IS A CONDITION OF THAT PROCEDURE THAT THE GOODS IN QUESTION DO NOT COME UNDER ANY OF THE HEADINGS OR SUBHEADINGS OF THE CUSTOMS TARIFF .

IN ORDER TO SETTLE THIS PROBLEM OF INTERPRETATION THE FINANZGERICHT SUBMITTED THE FOLLOWING QUESTION :

' IS THE COMMON CUSTOMS TARIFF TO BE INTERPRETED TO THE EFFECT THAT THE EXPRESSION ' ' FERRO-ALLOYS ' ' WITHIN THE MEANING OF HEADING 73.02 READ TOGETHER WITH NOTE 1 ( C ) TO CHAPTER 73 ONLY MEANS THOSE PRODUCTS WHICH WERE MANUFACTURED AS SUCH FROM NEW METALS OR ORES AND WHICH ARE DISTINGUISHED BY REASON OF THEIR INTENDED USE IN THE MAKING OF STEEL BY AN ACCURATELY PREDETERMINED , CONSTANT COMPOSITION OF SPECIFIC ALLOY ELEMENTS?

OR

DOES HEADING 73.02 ALSO INCLUDE MELTED DOWN SCRAP ( MATERIAL FOR RE-MELTING ) WHICH SATISFIES THE REQUIREMENTS AS TO COMPOSITION LAID DOWN IN NOTE 1 ( C ) TO CHAPTER 73?

'

5 HEADING 73.02 MERELY BEARS THE TITLE ' FERRO-ALLOYS ' , FOLLOWED BY SIX SUBHEADINGS ( A TO F ) REFERRING TO ALLOYS WITH A SPECIFIC CONTENT , AND A SUBHEADING G , ENTITLED ' OTHERS ' .

IN THE NOTES TO CHAPTER 73 , WHICH HAVE THE SAME LEGAL WEIGHT AS THE HEADINGS OF THE TARIFF , THE CONCEPT OF ' FERRO-ALLOYS ' IS DEFINED IN NOTE 1 ( C ) AS FOLLOWS :

' ALLOYS OF IRON . . . WHICH ARE NOT USEFULLY MALLEABLE AND ARE COMMONLY USED AS RAW MATERIAL IN THE MANUFACTURE OF FERROUS METALS AND WHICH CONTAIN , BY WEIGHT , SEPARATELY OR TOGETHER :

MORE THAN 8 % OF SILICON , OR

MORE THAN 30 % OF MANGANESE , OR

MORE THAN 30 % OF CHROMIUN , OR

MORE THAN 40 % OF TUNGSTEN , OR

A TOTAL OF MORE THAN 10 % OF OTHER ALLOY ELEMENTS . . . '

IN THE ' NOTES EXPLICATIVES DU TARIF DOUANIER COMMUN DES COMMUNAUTES EUROPEENNES ' , PUBLISHED BY THE COMMISSION , IT IS STATED WITH REGARD TO HEADING 73.02 THAT ' IRON AND STEEL WASTE , RE-MELTED AND ROUGHLY CAST INTO INGOTS ( WASTE OR SCRAP IN INGOT FORM ) HAVING THE COMPOSITION OF A FERRO-ALLOY AND USED AS ADDITION MATERIALS IN THE MANUFACTURE OF SPECIAL STEELS SHALL BE CLASSIFIED AS APPROPRIATE UNDER THE VARIOUS SUBHEADINGS OF HEADING 73.02 . '

IN THE EXPLANATIONS TO HEADING 73.03 , RELATING TO WASTE AND SCRAP METAL OF IRON OR STEEL , THE NOTES STATE THAT WASTE AND SCRAP METAL , RE-MELTED AND SIMPLY CAST INTO INGOTS AND KNOWN AS ' WASTE OR SCRAP IN INGOT FORM ' , SHALL BE CONSIDERED FOR THE PURPOSES OF THE TARIFF AS FERRO-ALLOYS OR AS INGOTS AND THUS CLASSIFIED ' ACCORDING TO ITS COMPOSITION ' UNDER THE VARIOUS SUBHEADINGS OF HEADING 73.02 OR OF HEADINGS 73.06 OR 73.15 .

IN THE EXPLANATIONS TO SUBHEADING 73.15 THE NOTES STATE , CONCERNING SUBHEADING B I ( B ) 1 ( AA ), THAT ' WASTE OR SCRAP IN INGOT FORM HAVING THE COMPOSITION OF A FERRO-ALLOY . . . SHALL BE CLASSIFIED AS APPROPRIATE UNDER THE SUBHEADINGS OF HEADING 73.02 . '

6 ALTHOUGH HEADING 73.02 , REGARDED IN ISOLATION , DOES NOT PROVIDE AN EXPLANATION OF THE MEANING OF THE EXPRESSION ' FERRO-ALLOYS ' , NOTE 1 ( C ) TO CHAPTER 73 SHOWS THAT APART FROM CERTAIN OTHER CRITERIA WHICH ARE IRRELEVANT TO THE PRESENT CASE THE CLASSIFICATION OF A PRODUCT AS A FERRO-ALLOY IS DETERMINED , OTHER THAN BY A MINIMUM IRON CONTENT , BY THE PRESENCE OF CERTAIN NON-FERROUS METALS IN PROPORTIONS EXCEEDING THOSE LAID DOWN BY THE NOTE .

IN PARTICULAR , THE PRESENCE OF PROPORTIONS OF ALLOY ELEMENTS OTHER THAN THOSE EXPRESSLY MENTIONED ( SILICON , MANGANESE , CHROMIUM AND TUNGSTEN ) IN EXCESS OF 10 % BY WEIGHT REQUIRE A PRODUCT , SUCH AS THAT IN DISPUTE , TO BE CLASSIFIED AMONGST THE FERRO-ALLOYS OF HEADING 73.02 .

FULLY IN ACCORD WITH THIS CONCEPT , THE ' NOTES EXPLICATIVES ' OF THE COMMISSION , QUOTED ABOVE , EMPHASIZE THE CRITERION OF THE ' COMPOSITION ' OF THE PRODUCTS COMING UNDER A GIVEN HEADING IN ORDER TO ASSIST IN DISTINGUISHING TARIFF HEADINGS WHOSE SUBJECT-MATTERS ARE PARTICULARLY CLOSE AND WHICH COULD ACCORDINGLY GIVE RISE TO CONFUSION .

ON THE OTHER HAND , THE CRITERIA FOR CLASSIFICATION ADOPTED BY NOTE 1 ( C ) DO NOT TAKE ACCOUNT OF FACTORS WHICH MIGHT BE OF USE IN DEFINING THE CONCEPT OF ' FERRO-ALLOYS ' FROM THE TECHNICAL OR COMMERCIAL POINT OF VIEW , SUCH AS THE FACT THAT THE ALLOYS ARE MANUFACTURED FROM NEW METALS OR ORES AND THAT THEY HAVE A CONSTANT , ACCURATELY-DETERMINED COMPOSITION .

7 WHILST THE CUSTOMS TARIFF DOES INDEED IN CERTAIN CASES CONTAIN REFERENCES TO MANUFACTURING PROCESSES AND TO THE USE FOR WHICH GOODS ARE INTENDED IT IS GENERALLY PREFERRED , IN THE INTERESTS OF LEGAL CERTAINTY AND EASE OF VERIFICATION , TO EMPLOY CRITERIA FOR CLASSIFICATION BASED ON THE OBJECTIVE CHARACTERISTICS AND PROPERTIES OF PRODUCTS WHICH CAN BE ASCERTAINED WHEN CUSTOMS CLEARANCE IS OBTAINED .

THE CRITERION DRAWN FROM THE CONTENT OF NON-FERROUS METALS IN IRON AND STEEL PRODUCTS , WHICH CONSTITUTES THE BASIS OF THE CRITERIA ADOPTED BY NOTE 1 ( C ) TO CHAPTER 73 , PERFORMS THAT FUNCTION IN THE PRESENT CASE WITH A VIEW TO FACILITATING THE CLASSIFICATION OF PRODUCTS UNDER THE HEADINGS AND SUBHEADINGS OF THE RELEVANT CHAPTER .

IN CONSEQUENCE , WHEN A PRODUCT CAN BE CLASSIFIED UNDER A SPECIFIC TARIFF HEADING ON THE BASIS OF ITS COMPOSITION , THERE IS NO FURTHER POSSIBILITY OF CLASSIFICATION BY ANALOGY WITHIN THE MEANING OF RULE NO 4 OF THE GENERAL RULES FOR THE INTERPRETATION OF THE NOMENCLATURE , SINCE SUCH A CLASSIFICATION CAN ONLY BE CONSIDERED , IN THE WORDS OF RULE 4 , IN RELATION TO GOODS ' NOT FALLING WITHIN ANY HEADING OF THE TARIFF ' .

8 THE REPLY TO THE QUESTION SUBMITTED MUST THEREFORE BE THAT HEADING 73.02 OF THE COMMON CUSTOMS TARIFF INCLUDES ' LUMPS ' OF MELTED FERROUS SCRAP WHICH SATISFY THE PHYSICAL REQUIREMENTS LAID DOWN IN NOTE 1 ( C ) TO CHAPTER 73 .

Decision on costs

COSTS

9 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 ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE FINANZGERICHT DUSSELDORF , COSTS ARE A MATTER FOR THAT COURT .

Operative part

ON THOSE GROUNDS ,

THE COURT ( SECOND CHAMBER )

IN ANSWER TO THE QUESTION SUBMITTED TO IT BY THE FINANZGERICHT DUSSELDORF BY AN ORDER OF 9 APRIL 1976 , HEREBY RULES :

HEADING 73.02 OF THE COMMON CUSTOMS TARIFF ALSO INCLUDES MELTED DOWN SCRAP ( MATERIAL FOR RE-MELTING ) WHICH SATISFIES THE PHYSICAL REQUIREMENTS LAID DOWN IN NOTE 1 ( C ) TO CHAPTER 73 OF THE COMMON CUSTOMS TARIFF .