Judgment of the Court (Second Chamber) of 5 October 1988. - Firme Albert Schmid v Hauptzollamt Stuttgart-West. - Reference for a preliminary ruling: Finanzgericht Baden-Württemberg - Germany. - Customs duty on reuseable packings. - Case 357/87.



European Court reports 1988 Page 06239



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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1 . Common Customs Tariff - General rules applicable both to nomenclature and to duties - "Packings" within the meaning of Rule 2 - Beer barrels, beer bottles and beer crates - Inclusion - Subsequent return to the seller in another country - No effect

2 . Common Customs Tariff - Special provisions relating to packings imported full - Rule 1 ( a ) - Scope - Duty payable on packings at the rate applicable to the goods contained therein

3 . Common Customs Tariff - Value for customs purposes - Transaction value - Calculation - Packings not included in the price of the goods and intended to be returned to the seller in another country - Exclusion - Financial compensation payable by the buyer in respect of packings not returned - Cost to be added to the price paid - Post-clearance recovery

( Council Regulations Nos 1697/79, Art . 2, and 1224/80, Arts 3 and 8 ( 1 ) ( a ) )

Summary

1 . The last sentence of Section I, C.2 . of Part I of the Common Customs Tariff must be interpreted as meaning that the expression "packing" includes beer barrels, beer bottles and plastic crates for beer bottles even where those articles are to be returned to the seller of the beer in another country .

2 . Section II, D.1 . ( a ) of Part I of the Common Customs Tariff ( as amended by Regulation No 3333/83 ) must be interpreted as meaning that duty is payable on packings at the rate applicable to the goods contained therein .

3 . Where the packings, because they must be returned to the seller in another country, are not included in the price payable for imported goods, their value is not included in the customs value as part of the transaction value . However, for the purposes of calculation of the customs value, financial compensation which the buyer is required to pay the seller for packings that are not returned constitutes a cost to be added to the price actually paid within the meaning of Article 8 ( 1 ) ( a ) of Regulation No 1224/80 and gives rise, in accordance with Article 2 of Regulation No 1697/79, to the post-clearance recovery of the duties payable .

Parties

In Case 357/87

REFERENCE to the Court under Article 177 of the EEC Treaty by the Finanzgericht ( Finance Court ) Baden-Wuerttemberg for a preliminary ruling in the proceedings pending before that court between

Firma Albert Schmid

and

Hauptzollamt Stuttgart-West

on the interpretation of Regulation ( EEC ) No 950/68 of the Council of 28 June 1968 on the Common Customs Tariff ( Official Journal, English Special Edition 1968 ( I ), p . 275 ),

THE COURT ( Second Chamber )

composed of : O . Due, President of Chamber, K . Bahlmann and T . F . O' Higgins, Judges,

Advocate General : J . L . da Cruz Vilaça

Registrar : B . Pastor, Administrator

after considering the observations submitted on behalf of

Firma Albert Schmid, the plaintiff in the main proceedings, by H . Glashoff and H . Kuehle, of Schurmann & Partner, tax advisers, Frankfurt am Main,

the Commission, by its Legal Adviser, J . Sack,

the Government of the Federal Republic of Germany, by M . Seidel, Ministerialrat at the Ministry of Economic Affairs,

having regard to the Report for the Hearing and further to the hearing on 14 June 1988,

after hearing the Opinion of the Advocate General delivered at the sitting on 6 July 1988,

gives the following

Judgment

Grounds

1 By order of 17 November 1987, which was received at the Court on 27 November 1987, the Finanzgericht Baden-Wuerttemberg referred two questions to the Court under Article 177 of the EEC Treaty for a preliminary ruling on the interpretation of Regulation No 950/68 of the Council of 28 June 1968 on the Common Customs Tariff, in order to determine whether barrels, bottles and crates used for imported beer constitute packings within the meaning of the Common Customs Tariff and on what basis, if any, they are chargeable to duty .

2 The plaintiff in the main proceedings, Firma Albert Schmid, imports beer from Czechoslovakia in barrels or in bottles in crates for sale in the Federal Republic of Germany . According to the sales contract the price of the beer does not include the cost of the containers or rental fees or the like but the plaintiff is required to return the empty containers to the Czech sellers at its own expense and as soon as possible . The loss of containers must be made good either in kind or by way of financial compensation fixed at the rate of 75% of the new value of barrels and 100% of the new value of bottles and crates . Between 1981 and 31 March 1984 the plaintiff returned on average 96% of the containers and made compensatory payments in respect of the remainder .

3 The defendant in the main proceedings, the Hauptzollamt Stuttgart-West, demanded payment of customs duty on the empty containers which were not returned, charged on the amount of the compensatory payments at the rate applicable to the beer ( 24 %). The plaintiff brought an action against that decision before the Finanzgericht Baden-Wuerttemberg, in which it maintained that the customs duty payable on the packing was already covered by the duty paid on the beer .

4 The Finanzgericht also raised the question whether the barrels, bottles and crates in fact constitute packings or transport devices (" Befoerderungsmitteln ") within the meaning of the Common Customs Tariff . If they constitute packings, the Finanzgericht considers that the question of the payment of duty arises not only for packings which must be replaced but for all packings, in so far as they are not admitted under temporary import arrangements, as in this case .

5 In order to resolve that dispute, the Finanzgericht stayed the proceedings and referred to the Court the following questions :

"( 1 ) How is the last sentence of Section I, C.2 . of Part I of the Annex to Article 1 of Regulation ( EEC ) No 950/68 of the Council of 28 June 1968 on the Common Customs Tariff ( Official Journal, English Special Edition 1968 ( I ), p . 275 ) to be interpreted : does the expression 'packings' ( meaning any external or internal containers, holders, wrappings or supports other than transport devices ( e.g . transport containers ), tarpaulins, tackle or ancillary transport equipment ) include beer barrels, beer bottles and plastic crates for beer bottles where those articles are to be returned to the seller of the beer in another country?

( 2 ) If the first question is answered in the affirmative : How is Section II, D.1 . ( a ) of Part I of the Annex to Article 1 of the aforementioned regulation ( which provides that packings are chargeable at the same rate of customs duty as the goods contained therein ) to be interpreted : is duty on packings which are themselves dutiable paid with the duty on the goods in such a way that the duty on the goods also discharges the duty on the packings, or are the packings chargeable on the basis of their own customs value but at the rate applicable to the goods?"

6 Reference is made to the Report for the Hearing for a fuller account of the facts of the case and the relevant Community legislation, the course of the procedure and the observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .

The first question

7 With regard to the first question, it should be pointed out that there is a difference between the German version and the other language versions of the provision in question . In the German version the term "Behaelter" ( containers "), which is mentioned as an example of a transport device, is not defined, whereas the other language versions add in brackets the English word "containers" - "transport containers" in the English version - thereby indicating that these are containers specifically intended for the transport of goods .

8 That comparison of the different language versions thus confirms that the term "packings", in accordance with normal usage, refers to containers which are suitable not only for transporting the products in question but also for storing and marketing them . That is precisely the case of beer barrels, beer bottles and beer crates . The fact that this case is concerned not with "non-returnable" packings but with containers which are to be returned to the seller for further use does not affect their classification as packings within the meaning of the provision in question .

9 The answer to the first question submitted by the national court must therefore be that the last sentence of Section I, C.2 . of Part I of the Annex to Regulation ( EEC ) No 950/68 of the Council of 28 June 1968 on the Common Customs Tariff must be interpreted as meaning that the expression "packing" includes beer barrels, beer bottles and plastic crates for beer bottles even where these articles are to be returned to the seller of the beer in another country .

The second question

10 With regard to the second question, it should be observed that the doubts expressed therein are also based on the specific features of the German version of the Common Customs Tariff . Although the wording in German of Section II, D.1 . ( a ) of Part I of the Annex to Regulation No 950/68 (" Umschliessungen ... werden durch den Zoll fuer die in ihnen verpackten Waren erfasst ") will bear the interpretation suggested by the plaintiff, that is not the case so far as the other language versions of that provision are concerned . Those versions clearly provide that packings are to be chargeable at the same rate of customs duty as the goods contained therein and their sole purpose is therefore to make the packings liable to the same rate of customs duty as the goods .

11 It follows that the problem of the payment of duty on packings returned to the seller in another country, which has come before the national court, cannot be resolved exclusively on the basis of that provision of the Common Customs Tariff . In order to give that court an answer which will be of assistance, therefore, it is necessary to consider whether there is another provision of Community law that makes it possible to resolve that problem, which, as the Commission has pointed out in its observations to the Court, concerns in particular the value of the imported goods for customs purposes .

12 According to Article 3 of Council Regulation ( EEC ) No 1224/80 of 28 May 1980 on the valuation of goods for customs purposes ( Official Journal 1980, L 134, p . 1 ), the customs value is the "transaction value, that is, the price actually paid or payable ". Accordingly, where the packings are not purchased by the importer but merely placed at his disposal by the seller on condition that they are returned, and where the price payable by the importer does not include the price of the packings, their value is not included in the customs value since it is not part of the transaction value .

13 However, according to Article 8 ( 1 ) ( a ) of Regulation No 1224/80 the price actually paid or payable is to be increased by the cost of packing, amongst other things, to the extent to which it has been incurred by the buyer but is not included in the price of the goods .

14 In a case such as this, therefore, in which the cost of packing is represented by the payment of financial compensation for the loss of containers, to be determined and paid separately after the imported goods have been consumed, it is necessary to adjust ex post facto the value of those goods for customs purposes and to recover the outstanding amount of customs duty under Article 2 of Council Regulation ( EEC ) No 1697/79 of 24 July 1979 on the post-clearance recovery of import duties or export duties which have not been required of the person liable for payment on goods entered for a customs procedure involving the obligation to pay such duties ( Official Journal 1979, L 197, p . 1 ).

15 It follows from the foregoing that the answer to the second question submitted by the national court must be that Section II, D.1 . ( a ) of Part I of the Annex to Regulation No 950/68 must be interpreted as meaning that duty is payable on packings at the rate applicable to the goods contained therein . However, where the packings are not included in the price payable for the goods but are to be returned to the seller in another country, and the buyer is required to pay the seller financial compensation in respect of packings that are not returned, such compensation constitutes a cost within the meaning of Article 8 ( 1 ) ( a ) of Council Regulation ( EEC ) No 1224/80 of 28 May 1980 on the valuation of goods for customs purposes .

Decision on costs

Costs

16 The costs incurred by the Federal Republic of Germany and the Commission of the European Communities, which have 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 pending before the national court, the decision on costs is a matter for that court .

Operative part

On those grounds,

THE COURT ( Second Chamber ),

in answer to the questions submitted to it by the Finanzgericht Baden-Wuerttemberg, by order of 17 November 1987, hereby rules :

( 1 ) The last sentence of Section I, C.2 . of Part I of the Annex to Regulation ( EEC ) No 950/68 of the Council of 28 June 1968 on the Common Customs Tariff must be interpreted as meaning that the expression "packing" includes beer barrels, beer bottles and plastic crates for beer bottles even where those articles are to be returned to the seller of the beer in another country .

2 . Section II, D.1 . ( a ) of Part I of the Annex to Regulation No 950/68 must be interpreted as meaning that duty is payable on packings at the rate applicable to the goods contained therein . However, where the packings are not included in the price payable for the goods but are to be returned to the seller in another country, and the buyer is required to pay the seller financial compensation in respect of packings that are not returned, such compensation constitutes a cost within the meaning of Article 8 ( 1 ) ( a ) of Council Regulation ( EEC ) No 1224/80 of 28 May 1980 on the valuation of goods for customs purposes .