Judgment of the Court (First Chamber) of 14 November 1985. - Texas Instruments Deutschland GmbH v Hauptzollamt München - Mitte. - Reference for a preliminary ruling: Finanzgericht München - Germany. - Common Customs Tariff - Electronic memories - Dimensions of housings. - Case 227/84.



European Court reports 1985 Page 03639



Summary

Parties

Subject of the case

Grounds

Decision on costs

Operative part



Keywords

COMMON CUSTOMS TARIFF - ALTERATION OR SUSPENSION OF IMPORT DUTIES - POWERS OF THE COUNCIL - LIMITS

( EEC TREATY , ART . 28 ; COUNCIL REGULATION NO 2841/79 )

Summary

ALTHOUGH ARTICLE 28 OF THE EEC TREATY , WHICH CONCERNS AUTONOMOUS ALTERATIONS OR SUSPENSIONS OF COMMON CUSTOMS TARIFF DUTIES , LEAVES THE COUNCIL CONSIDERABLE DISCRETION , IT IS FOR THE COURT TO ASCERTAIN WHETHER OR NOT THE MANNER IN WHICH THE COUNCIL HAS CARRIED OUT THE DUTIES THEREBY ENTRUSTED TO IT CONSTITUTES A MISUSE OF POWER OR GIVES RISE TO DISCRIMINATION .

Parties

IN CASE 227/84

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

TEXAS INSTRUMENTS DEUTSCHLAND GMBH , FREISING ,

AND

HAUPTZOLLAMT ( PRINCIPAL CUSTOMS OFFICE ) MUNCHEN-MITTE ,

Subject of the case

ON THE VALIDITY OF COUNCIL REGULATION ( EEC ) NO 2841/79 OF 11 DECEMBER 1979 ON THE TEMPORARY TOTAL SUSPENSION OF THE COMMON CUSTOMS TARIFF DUTIES FOR CERTAIN TYPES OF ELECTRONIC MEMORIES FALLING WITHIN SUBHEADING EX 85.21 D II ,

Grounds

1 BY AN ORDER OF 20 AUGUST 1984 , WHICH WAS RECEIVED AT THE COURT ON 12 SEPTEMBER 1984 , THE FINANZGERICHT MUNCHEN REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY TWO QUESTIONS ON THE VALIDITY OF COUNCIL REGULATION ( EEC ) NO 2841/79 OF 11 DECEMBER 1979 ON THE TEMPORARY TOTAL SUSPENSION OF THE COMMON CUSTOMS TARIFF DUTIES FOR CERTAIN TYPES OF ELECTRONIC MEMORIES FALLING WITHIN SUBHEADING EX 85.21 D II ( OFFICIAL JOURNAL 1979 , L 322 , P . 4 ).

2 THE REGULATION IN QUESTION IS BASED ON ARTICLE 28 OF THE EEC TREATY . IT PROVIDES FOR THE TOTAL SUSPENSION FROM 1 JANUARY TO 30 JUNE 1980 OF THE AUTONOMOUS COMMON CUSTOMS TARIFF DUTIES APPLICABLE TO ELECTRONIC PROGRAMMABLE READ-ONLY MEMORIES ( EPROMS ), UV-ERASABLE , WITH A STORAGE CAPACITY OF 32K BITS OR 64K BITS , IN THE FORM OF A MONOLITHIC INTEGRATED CIRCUIT CONTAINED IN A HOUSING BEARING A CAPACITY MARKING OF ' 32 ' OR ' 64 ' , WHOSE EXTERIOR DIMENSIONS DO NOT EXCEED 14.2 X 33.3 MM , WITH A QUARTZ WINDOW ON THE UPPER SURFACE AND 12 CONNECTING PINS ALONG EACH OF THE LONGER SIDES .

3 THE MAIN PROCEEDINGS CONCERN THE IMPORTATION IN JANUARY 1980 BY A GERMAN UNDERTAKING , TEXAS INSTRUMENTS DEUTSCHLAND GMBH , OF A CONSIGNMENT OF ELECTRONIC MEMORIES ( EPROMS ) FROM SINGAPORE . THE NATIONAL COURT FOUND THAT THEY POSSESSED ALL THE CHARACTERISTICS LISTED IN REGULATION NO 2841/79 WITH THE EXCEPTION THAT THE EXTERIOR DIMENSIONS OF THE HOUSINGS WERE 15.1 X 30.4 MM . THE GERMAN CUSTOMS AUTHORITIES , IN THIS CASE THE HAUPTZOLLAMT MUNCHEN-MITTE , DECIDED THAT SINCE THE SUSPENSION ESTABLISHED BY REGULATION NO 2841/79 DID NOT APPLY , THE IMPORTATION IN QUESTION WAS SUBJECT TO AD VALOREM CUSTOMS DUTY OF 17% . TEXAS INSTRUMENTS LODGED AN OBJECTION AGAINST THAT DECISION AND FOLLOWING THE REJECTION OF THAT OBJECTION BROUGHT AN ACTION .

4 IN SUPPORT OF ITS ACTION , TEXAS INSTRUMENTS CLAIMED THAT THE REQUIREMENT THAT THE DIMENSIONS OF HOUSINGS OF EPROMS SHOULD NOT EXCEED 14.2 X 33.3 MM WAS ARBITRARY . IT ARGUED THAT IN THE FIRST PLACE THE ECONOMIC VALUE OF SUCH AN APPARATUS WAS DETERMINED BY ITS STORAGE CAPACITY , WHICH DID NOT DEPEND ON THE DIMENSIONS OF THE HOUSING . THERE WAS THEREFORE NO OBJECTIVE REASON FOR DISTINGUISHING BETWEEN EPROMS WITH HOUSINGS OF 14.2 X 33.3 MM AND THOSE WITH HOUSINGS OF 15.1 X 30.4 MM . SECONDLY , THE CONTESTED REGULATION WAS ADOPTED BY THE COUNCIL AT THE REQUEST OF THE GERMAN GOVERNMENT , WHICH MERELY PASSED ON A REQUEST FROM A LARGE GERMAN UNDERTAKING . THE DIMENSIONS OF THE EPROMS IMPORTED BY THAT UNDERTAKING WERE ADOPTED AS A BASIS FOR THE REGULATION .

5 THE FINANZGERICHT , BEFORE WHICH THE ACTION WAS BROUGHT , CONSIDERED THAT IT WAS NOT POSSIBLE TO DETERMINE EITHER FROM THE WORDING OF THE REGULATION OR THE PREAMBLE THERETO WHY THE TEMPORARY SUSPENSION OF CUSTOMS DUTIES WAS LIMITED TO ELECTRONIC MEMORIES WITH HOUSINGS NOT EXCEEDING 14.2 X 33.3 MM . IN SO FAR AS THE SUSPENSION OF DUTIES WAS MADE SUBJECT TO THOSE MAXIMUM DIMENSIONS , THE REGULATION COULD BE REGARDED AS CONTRARY TO THE PRINCIPLES OF EQUAL TREATMENT . IN THE COURT ' S VIEW THE ARBITRARY CHARACTER OF THE MAXIMUM DIMENSIONS ADOPTED WAS , MOREOVER , CONFIRMED BY THE FACT THAT THE COUNCIL HAD ALTERED THE MAXIMUM HOUSING DIMENSIONS BY COUNCIL REGULATION ( EEC ) NO 1136/80 OF 6 MAY 1980 ( OFFICIAL JOURNAL L 116 , P . 49 ), ACCORDING TO WHICH FROM 7 MAY 1980 THE DIMENSIONS WERE NOT TO EXCEED 15.6 X 33.3 MM .

6 THE COURT THEN CONSIDERED THE CONSEQUENCES OF A FINDING THAT REGULATION NO 2841/79 WAS UNLAWFUL FOR BREACH OF THE PRINCIPLE OF EQUAL TREATMENT . IN ITS VIEW THAT ILLEGALITY WOULD NOT BE REMEDIED BY A DECLARATION THAT THE REGULATION WAS INVALID , SINCE THAT WOULD HAVE THE EFFECT OF REINSTATING CUSTOMS DUTIES FOR ALL EPROMS AND WOULD NOT REMOVE FROM THE REGULATION ONLY THE REQUIREMENT CONCERNING THE DIMENSIONS OF THE HOUSING .

7 ON THE BASIS OF THOSE CONSIDERATIONS THE FINANZGERICHT REFERRED TO THE COURT FOR A PRELIMINARY RULING ON THE FOLLOWING TWO QUESTIONS :

' ( 1 ) DOES COUNCIL REGULATION ( EEC ) NO 2841/79 OF 11 DECEMBER 1979 INFRINGE THE GENERAL PRINCIPLE OF EQUAL TREATMENT BECAUSE IT MAKES THE EXEMPTION FROM CUSTOMS DUTIES OF THE ELECTRONIC PROGRAMMABLE UV-ERASABLE READ-ONLY MEMORIES ( EPROMS ) DESCRIBED THEREIN DEPENDENT ON THEIR HAVING EXTERIOR DIMENSIONS NOT EXCEEDING 14.2 X 33.3 MM?

( 2)IF SO WHAT ARE THE LEGAL CONSEQUENCES OF THAT INFRINGEMENT?

'

8 IN THE COURSE OF THE PROCEEDINGS BEFORE THE COURT , THE COUNCIL AND THE COMMISSION DREW ATTENTION TO THE FACT THAT ARTICLE 28 OF THE TREATY , WHICH CONCERNS THE AUTONOMOUS ALTERATION OR SUSPENSION OF COMMON CUSTOMS TARIFF DUTIES , IS ONE OF THE RARE PROVISIONS OF THE TREATY UNDER WHICH THE COUNCIL MAY ADOPT A DECISION WITHOUT A PROPOSAL FROM THE COMMISSION . IN PRACTICE THE COMMISSION OFTEN PRESENTS DRAFT REGULATIONS WHICH ARE INTENDED TO PROVIDE A BASIS FOR A MEASURE TO BE ADOPTED BY THE COUNCIL . HOWEVER , REGULATION NO 2841/79 WAS ADOPTED NOT ON THE BASIS OF A DRAFT SUBMITTED BY THE COMMISSION , BUT AT THE INSTIGATION OF A MEMBER STATE , THE FEDERAL REPUBLIC OF GERMANY . REGULATION NO 1136/80 , WHICH IS ALSO REFERRED TO IN THE ORDER FOR REFERENCE , WAS THE RESULT OF A REQUEST FROM THE FRENCH REPUBLIC .

9 THE TWO INSTITUTIONS THEN STATED THAT NORMALLY CUSTOMS DUTIES ARE SUSPENDED IN RESPECT OF MORE THAN ONE THOUSAND GOODS PER YEAR . IN 1984 THE COUNCIL SUSPENDED DUTY IN RESPECT OF 922 PRODUCTS OR CATEGORIES OF PRODUCTS .

10 THE COUNCIL ARGUES THAT SUSPENSIONS OF CUSTOMS DUTIES ARE DECISIONS OF ECONOMIC POLICY TAKEN BY THE COUNCIL AND THAT IT MUST HAVE A WIDE DISCRETION IN THAT RESPECT . SINCE THE SUSPENSIONS ARE DEROGATIONS FROM THE COMMON CUSTOMS TARIFF THEY MUST BE DEFINED PRECISELY . IT IS THEREFORE INEVITABLE THAT PROBLEMS OF DELIMITATION ARISE FROM TIME TO TIME .

11 THE COMMISSION ADDS THAT ANY SUSPENSION OF DUTY WHICH DOES NOT CORRESPOND TO A HEADING OR A SUBHEADING OF THE COMMON CUSTOMS TARIFF ENTAILS AN ELEMENT OF TARIFF CLASSIFICATION . BY VIRTUE OF THE TREATY , ONLY THE COUNCIL IS EMPOWERED TO LAY DOWN THE DEFINITIONS NECESSARY FOR THAT PURPOSE . A NATIONAL COURT MAY NOT DRAW UP ITS OWN CUSTOMS NOMENCLATURE OR DETERMINE THE CATEGORIES OF GOODS CAPABLE OF QUALIFYING FOR AN ALTERATION OR SUSPENSION OF CUSTOMS DUTY .

12 IT MUST BE NOTED IN THE FIRST PLACE THAT ARTICLE 28 OF THE TREATY EMPOWERS THE COUNCIL TO DECIDE A TEMPORARY , PARTIAL OR TOTAL SUSPENSION OF COMMON CUSTOMS TARIFF DUTIES AND DOES NOT REQUIRE THAT THE COMMISSION PRESENT A PROPOSAL TO THAT EFFECT NOR THAT THE EUROPEAN PARLIAMENT OR THE ECONOMIC AND SOCIAL COMMITTEE BE CONSULTED . THE COUNCIL HAS NOT , ON ITS OWN INITIATIVE OR ON THAT OF THE COMMISSION , ESTABLISHED A PROCEDURE FOR CONSIDERING THE SUGGESTIONS AND PROPOSALS WHICH ARE SUBMITTED TO IT . CONSEQUENTLY , IT IS NECESSARY TO CONSIDER THE PROCEDURE FOLLOWED IN THIS PARTICULAR CASE .

13 AS REGARDS REGULATION NO 2841/79 , IT APPEARS FROM THE DOCUMENTS BEFORE THE COURT THAT THE COUNCIL ACTED AT THE INSTIGATION OF THE GERMAN GOVERNMENT , THAT THAT GOVERNMENT HAD RECEIVED A REQUEST TO THAT EFFECT FROM A GERMAN ASSOCIATION OF MACHINE MANUFACTURERS ( VEREIN DEUTSCHER MASCHINENBAU-ANSTALTEN ) AND THAT THAT REQUEST WAS FIRST SUBMITTED TO THE ASSOCIATION OF PRODUCERS IN THE ELECTROTECHNICAL INDUSTRY , WHICH GAVE A POSITIVE OPINION . THE VEREIN DEUTSCHER MASCHINENBAU-ANSTALTEN MAINTAINED THAT ALL EPROMS , WHATEVER THEIR STORAGE CAPACITY , HAD HOUSINGS OF IDENTICAL DIMENSIONS , AND THAT THOSE DIMENSIONS , NAMELY 14.2 X 33.3 MM , CORRESPONDED TO INTERNATIONAL STANDARDS RECOGNIZED IN PARTICULAR BY THE INTERNATIONAL ELECTROTECHNICAL COMMISSION , WHOSE TASK IT IS TO ESTABLISH INTERNATIONAL STANDARDS IN THE ELECTROTECHNICAL INDUSTRY . IN ADDITION IT APPEARS FROM INFORMATION SUPPLIED BY THE COUNCIL AND THE COMMISSION THAT THE REQUEST SUBMITTED BY THE GERMAN GOVERNMENT WAS , PRIOR TO ITS ADOPTION BY THE COUNCIL , EXAMINED BY A GROUP OF CUSTOMS EXPERTS , IN WHICH THE COMMISSION WAS REPRESENTED .

14 CONSEQUENTLY , THE ARGUMENT THAT THE FIXING BY REGULATION NO 2841/79 OF MAXIMUM DIMENSIONS FOR HOUSINGS WAS ARBITRARY CANNOT BE ACCEPTED .

15 ALTHOUGH REGULATION NO 1136/80 ALTERED FROM 7 MAY 1980 THE MAXIMUM DIMENSIONS OF HOUSINGS OF EPROMS CAPABLE OF QUALIFYING FOR THE SUSPENSION OF DUTIES , THAT FACT IS NOT SUCH AS TO RENDER INVALID THE MAXIMUM DIMENSIONS LAID DOWN IN THE PREVIOUS REGULATION . CUSTOMS REGULATIONS MAY BE ALTERED FOR A VARIETY OF REASONS , SUCH AS THE PROGRESS OF TECHNICAL KNOWLEDGE OR COMMERCIAL DEVELOPMENTS AND CHANGES IN THE ECONOMIC SITUATION WHICH HAVE OCCURRED IN THE MEANTIME . THE COUNCIL WOULD NOT BE IN A POSITION TO FULFIL ITS DUTY UNDER ARTICLE 28 IF EVERY ALTERATION OFTHE DESCRIPTION OF CATEGORIES OF GOODS SUBJECT TO SPECIFIC CUSTOMS RULES COULD RENDER INVALID THE DESCRIPTION USED PREVIOUSLY .

16 ALTHOUGH ARTICLE 28 LEAVES THE COUNCIL CONSIDERABLE DISCRETION , IT IS FOR THE COURT TO ASCERTAIN WHETHER OR NOT THE MANNER IN WHICH THE COUNCIL HAS CARRIED OUT THE DUTIES THEREBY ENTRUSTED TO IT CONSTITUTES A MISUSE OF POWER OR GIVES RISE TO DISCRIMINATION . IN THIS INSTANCE , HOWEVER , THERE IS NOTHING IN THE ALLEGATIONS OF THE PLAINTIFF IN THE MAIN PROCEEDINGS OR THE OTHER INFORMATION AT THE COURT ' S DISPOSAL TO SUGGEST THAT THE MANNER IN WHICH THE DIMENSIONS IN QUESTION WERE FIXED WAS INTENDED TO PLACE AT AN ADVANTAGE OR A DISADVANTAGE CERTAIN TRADERS , OR THAT IT WAS DISCRIMINATORY .

17 CONSEQUENTLY IN REPLY TO THE NATIONAL COURT IT MUST BE STATED THAT CONSIDERATION OF ITS FIRST QUESTION HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF REGULATION NO 2841/79 .

18 THE SECOND QUESTION , WHICH WAS TO BE ANSWERED ONLY IF THE REPLY TO THE FIRST QUESTION WAS IN THE AFFIRMATIVE , HAS THUS BECOME DEVOID OF PURPOSE .

Decision on costs

COSTS

19 THE COSTS INCURRED BY THE COUNCIL AND THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE . SINCE 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 AS TO COSTS IS A MATTER FOR THAT COURT .

Operative part

ON THOSE GROUNDS ,

THE COURT ( FIRST CHAMBER ),

IN ANSWER TO THE QUESTIONS REFERRED TO IT BY THE FINANZGERICHT MUNCHEN BY AN ORDER OF 20 AUGUST 1984 , HEREBY RULES :

CONSIDERATION OF THE QUESTIONS REFERRED TO THE COURT HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF COUNCIL REGULATION ( EEC ) NO 2841/79 OF 11 DECEMBER 1979 .