Joined Cases C-522/07 and C-65/08

Dinter GmbH

v

Hauptzollamt Düsseldorf

and

Europol Frost-Food GmbH

v

Hauptzollamt Krefeld

(References for a preliminary ruling from the Finanzgericht Düsseldorf)

(Common Customs Tariff – Regulation (EEC) No 2658/87 – Combined Nomenclature – Tariff classification – Validity – Additional note – Apple juice concentrate)

Summary of the Judgment

Common Customs Tariff – Tariff headings – Explanatory notes to the Combined nomenclature

(Council Regulation No 2658/87; Commission Regulations No 1776/2001, No 2031/2001 and No 1810/2004)

Additional Note 5(b) to Chapter 20 of Annex I to Regulation No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff, as amended by Regulations No 1776/2001, No 2031/2001 and No 1810/2004, amending Annex I to Regulation No 2658/87, is invalid to the extent that it excludes natural apple juice concentrate from heading 2009.

The broad logic of subheading 2009 79 clearly suggests that natural apple juice concentrates, of a Brix value slightly below 67, have not lost their character as fruit juices, contrary to what is stated in that note. That note excludes apple juice concentrates by means of a notional calculation of the added sugar content, giving a result of over 50% by weight, whereas apple juice concentrates, which have undergone water extraction and therefore have high Brix values, retain their original character. Since there is no sugar added and the high level of added sugar, giving a result of over 50% by weight, is produced solely by the concentration brought about by the extraction of water, the Additional Note at issue definitely amends the content of the tariff headings at issue by excluding apple juice concentrates from heading 2009, thereby exceeding the powers which Article 9 of Regulation No 2658/87 confers upon the Commission.

(see paras 40-42, operative part)

JUDGMENT OF THE COURT (Eighth Chamber)

29 October 2009 ( )

(Common Customs Tariff – Regulation (EEC) No 2658/87 – Combined Nomenclature – Tariff classification – Validity – Additional note – Apple juice concentrate)

In Joined Cases C‑522/07 and C‑65/08,

REFERENCES for a preliminary ruling under Article 234 EC from the Finanzgericht Düsseldorf (Germany), made by decisions of 8 November 2007 and 12 February 2008, received at the Court on 22 November 2007 and 18 February 2008, in the proceedings

Dinter GmbH

v

Hauptzollamt Düsseldorf (C‑522/07)

and

Europol Frost-Food GmbH

v

Hauptzollamt Krefeld (C‑65/08),

THE COURT (Eighth Chamber),

composed of G. Arestis (Rapporteur), acting as President of the Eighth Chamber, J. Malenovský and T. von Danwitz, Judges,

Advocate General: E. Sharpston,

Registrar: B. Fülöp, Administrator,

having regard to the written procedure and further to the hearing on 14 May 2009,

after considering the observations submitted on behalf of:

– Dinter GmbH, by H. Bleier, Rechtsanwalt,

– Europol Frost-Food GmbH, by A. Erben, Rechtsanwalt,

– the Commission of the European Communities, by G. Wilms and A. Sipos, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 These references for a preliminary ruling concern the validity of Additional Note 5(b) to Chapter 20 of the Combined Nomenclature (‘CN’), as set out in Annex I to Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1987 L 256, p. 1) in the version in force at the times material to the main proceedings (‘Regulation No 2658/87’).

2 The references were made in the course of two actions concerning the CN classification of apple juice concentrate, the first brought by Dinter GmbH (‘Dinter’) against the Hauptzollamt Düsseldorf (principal tax office in Düsseldorf) and the second brought by Europol Frost-Food GmbH (‘Europol’) against Hauptzollamt Krefeld (principal tax office in Krefeld).

Legal context

3 The International Convention on the Harmonised Commodity Description and Coding System (‘the HS’), concluded at Brussels on 14 June 1983, and its amending protocol of 24 June 1986 (‘the HS Convention’) were approved on behalf of the European Economic Community by Council Decision 87/369/EEC of 7 April 1987 (OJ 1987 L 198, p. 1).

4 Under Article 3(1) of the HS Convention, each contracting party undertakes to ensure that its customs tariff and statistical nomenclatures are in conformity with the HS, to use all the headings and subheadings of the HS without addition or modification, together with their related numerical codes, and to follow the numerical sequence of that system. Each contracting party also undertakes to apply the general rules for the interpretation of the HS and all the Section, Chapter and Subheading Notes, and not to modify the scope of those Sections, Chapters, headings or subheadings.

5 Article 9 of Regulation No 2658/87 sets out the limits of the Commission’s discretion when adopting additional notes:

‘1. Measures relating to the matters set out below shall be adopted in accordance with the procedure defined in Article 10:

(a) application of the Combined Nomenclature and the Taric, concerning in particular:

– the classification of goods in the nomenclatures referred to in Article 8,

– [additional] notes;

– ... .

(b) amendments to the combined nomenclature to take account of changes in requirements relating to statistics or to commercial policy;

(c) amendments to Annex II;

(d) amendments to the combined nomenclature and adjustments to duties in accordance with decisions adopted by the Council or the Commission;

(e) amendments to the combined nomenclature intended to adapt it to take account of technological or commercial developments or aimed at the alignment or clarification of texts;

(f) amendments to the combined nomenclature resulting from changes to the harmonised system nomenclature;

(g) questions relating to the application, functioning and management of the harmonised system to be discussed within the Customs Cooperation Council, as well as their implementation by the Community.

2. The provisions adopted under paragraph 1 shall not amend:

– the rates of customs duties;

– agricultural levies, refunds or other amounts applicable within the framework of the common agricultural policy or within that of specific schemes applicable to certain goods resulting from the processing of agricultural products;

– quantitative restrictions laid down under Community provisions;

– nomenclatures adopted within the framework of the common agricultural policy.

3. If necessary, amendments to CN subheadings shall be immediately included as Taric subheadings. They shall only be included in the CN under the conditions referred to in Article 12.’

6 Commission Regulation (EC) No 2388/2000 of 13 October 2000 amending Annex I to Regulation No 2658/87 (OJ 2000 L 264, p. 1) entered into force on 1 January 2001. By a corrigendum to that regulation (OJ 2000 L 276, p. 92), the original number 2263/2000 was replaced with No 2388/2000.

7 Commission Regulation No 2031/2001 of 6 August 2001 amended Annex I to Regulation No 2658/87 (OJ 2001 L 279, p. 1) and entered into force on 1 January 2002.

8 The last amendment of Annex I to Regulation No 2658/87 which is relevant for the purposes of the cases before the referring court was made by Commission Regulation No 1810/2004 of 7 September 2004 (OJ 2004 L 327, p. 1), which entered into force on 1 January 2005.

9 Pursuant to Regulation No 2388/2000, subheading 2009 70 entitled ‘Apple juice’ states:

‘2009 70 – Apple juice:

- - Of a density exceeding 1,33 g/cm³ at 20 °C:

2009 70 11 - - - Of a value not exceeding € 22 per 100 kg net weight

2009 70 19 - - - Other

- - Of a density not exceeding 1,33g/cm³ at 20 °C:

2009 70 30 - - - Of a value exceeding € 18 per 100 kg net weight, containing added sugar

- - - Other:

2009 70 91 - - - - With an added sugar content exceeding 30% by weight

2009 70 93 - - - - With an added sugar content not exceeding 30% by weight

2009 70 99 - - - - not containing added sugar’.

10 Regulations Nos 2031/2001 and 1810/2004 lay down identical tariff lines for the subheadings which come within the subheading ‘Apple juice’.

11 Under those regulations, that subheading, which was previously No 2009 70, states as follows:

‘− Apple juice:

2009 71 - - Of a Brix value not exceeding 20:

2009 71 10 - - - Of a value exceeding € 18 per 100 kg net weight, containing added sugar

- - - Other:

2009 71 91 - - - - Containing added sugar

2009 71 99 - - - - Not containing added sugar

2009 79 - - Other:

- - - Of a Brix value exceeding 67:

2009 79 11 - - - - Of a value not exceeding € 22 per 100 kg net weight

2009 79 19 - - - - Other

- - - Of a Brix value exceeding 20 but not exceeding 67:

2009 79 30 - - - - Of a value exceeding € 18 per 100 kg net weight, containing added sugar

- - - - Other:

2009 79 91 - - - - - With an added sugar content exceeding 30% by weight

2009 79 93 - - - - - With an added sugar content not exceeding 30% by weight

2009 79 99 - - - - - Not containing added sugar’.

12 At the times material to the main proceedings, Additional Note 5 to Chapter 20 of the CN had been amended on a number of occasions.

13 In accordance with Regulation No 2388/2000, that note states:

‘The added sugar content of products classified under heading No 2009 corresponds to the “sugar content” less the figures given hereunder, according to the kind of juice concerned:

– lemon or tomato juice: 3,

– apple juice: 11,

– grape juice: 15,

– other fruit or vegetable juices, including mixtures of juices: 13.’

14 Commission Regulation (EC) No 1776/2001 of 7 September 2001 amending Annex I to Regulation No 2658/87 (OJ 2001 L 240, p. 3) subsequently added, to Chapter 20 of the CN, Additional Note 5(b) which provides:

‘The fruit juices with added sugar, of a density not exceeding 1,33 g/cm³ at 20 °C and containing less than 50% by weight of fruit juices in their natural state obtained from fruits or by dilution of concentrated juice, lose their original character of fruit juices of heading No 2009.’

15 Regulation No 2031/2001 amended Additional Note 5(b) to read as follows:

‘The fruit juices with added sugar, of a Brix value not exceeding 67 and containing less than 50% by weight of fruit juices in their natural state obtained from fruits or by dilution of concentrated juice, lose their original character of fruit juices of heading 2009.’

16 In Regulation No 1810/2004, Additional Note 5 provides:

‘(a) The added sugar content of products of heading 2009 corresponds to the “sugar content” less the figures given hereunder, according to the kind of juice concerned:

– lemon or tomato juice: 3,

– grape juice: 15,

– other fruit or vegetable juices, including mixtures of juices: 13.

(b) The fruit juices with added sugar, of a Brix value not exceeding 67 and containing less than 50% by weight of fruit juices in their natural state obtained from fruits or by dilution of concentrated juice, lose their original character of fruit juices of heading 2009.’

17 Additional Note 5(b) to Chapter 20 of the CN was amended recently by Commission Regulation (EC) No 360/2008 of 18 April 2008 (OJ 2008 L 111, p. 9) as follows:

‘5. The following shall be applied to the products as they are presented:

…

(b) the fruit juices with added sugar, of a Brix value not exceeding 67 and containing less than 50% by weight of fruit juice lose their original character of fruit juices of heading 2009.

Point (b) shall not apply to concentrated natural fruit juices. Consequently, concentrated natural fruit juices are not excluded from heading 2009.’

The disputes in the main proceedings and the questions referred for a preliminary ruling

Case C-522/07

18 On 27 October 2005, the competent customs office accepted that apple juice concentrate imported by Dinter, which did not contain additional sugar and was of a Brix value of 66,8, was to be classified under subheading 2009 79 99 of the CN. The apple juice had merely undergone water extraction.

19 By decision of 15 March 2006, the Hauptzollamt Düsseldorf claimed post‑clearance recovery of customs duties relating to the apple juice imported by Dinter on the ground that, pursuant to Additional Notes 2(a), 5(a) and 5(b) in Chapter 20 of the CN, imported apple juice which has lost its original character of fruit juice did not come under heading 2009, but under subheading 2106 90 98 of the CN.

20 Dinter contested that decision before the Finanzgericht Düsseldorf (Dusseldorf Finance Court), without prior administrative proceedings. The Hauptzollamt Düsseldorf consented to that form of action.

21 In those circumstances, the Finanzgericht Düsseldorf decided to stay proceedings and refer the following questions to the Court for a preliminary ruling:

‘1. Is Additional Note 5(b) to Chapter 20 of the [CN] to be interpreted as meaning that the term “fruit juices with added sugar” also refers to fruit juices to which no sugar has actually been added, but whose added sugar content is calculated mathematically in accordance with Additional Note 5(a) to Chapter 20 of the [CN]?

2. Is Additional Note 5(b) to Chapter 20 of the [CN] to be interpreted as meaning that the term “fruit juices in their natural state” is merely clarified by the words “obtained from fruits or by dilution of concentrated juice”, but in fact applies to all types of fruit juices (not cooked and without added alcohol) in the state in which they are presented?

3. If both the preceding questions are answered in the affirmative, is Additional Note 5(b) to Chapter 20 of the [CN] valid?’

Case C-65/08

22 Between 13 November 2001 and 11 October 2002, Europol imported apple juice concentrate of a Brix value of 65, declaring the goods under subheading 2009 70 30 of the CN in 2001 and under subheading 2009 79 19 of the CN in 2002.

23 By notice of 14 August 2003, the Hauptzollamt Krefeld, taking the view that pursuant to Additional Note 5 to Chapter 20 of the CN the imported apple juice concentrate had lost its character of fruit juice under heading 2009 and had to be assigned to subheading 2106 90 98 of the CN, claimed post‑clearance recovery of the related customs duties.

24 On 15 March 2005, Europol’s administrative appeal against that notice was dismissed as unfounded.

25 The applicant applied to the Finanzgericht Düsseldorf for annulment of the decision dismissing its administrative appeal.

26 The Finanzgericht Düsseldorf decided, on 12 February 2008, to stay the proceedings and refer the following question to the Court for a preliminary ruling:

‘Is Additional Note 5(b) to Chapter 20 of the [CN], as amended by Regulations (EC) Nos 2388/2000 and 2031/2001, valid?’

27 By order of the President of the Court of 27 June 2008, Case C‑522/07 and Case C‑65/08 were joined for the purposes of the oral procedure and the judgment.

The questions referred for a preliminary ruling

28 By its questions, which it is appropriate to deal with together, the referring court asks, in essence, whether Additional Note 5(b) to Chapter 20 of the CN, as amended by Regulations Nos 1776/2001, 2031/2001 and 1810/2004, is valid. Specifically, it asks whether that note must be interpreted as meaning that the concept of fruit juice containing added sugar also covers fruit juice concentrates not containing added sugar, and whether the expression ‘obtained from fruits or by dilution of concentrated juice’ refers to all fruit juices in their natural state, however they may be presented.

29 It should be borne in mind from the outset that according to settled case‑law, in the interests of legal certainty and ease of verification, the decisive criterion for the classification of goods for customs purposes is in general to be sought in their objective characteristics and properties as defined in the wording of the relevant heading of the CN and in the section or chapter notes (see, inter alia, Case C‑142/06 Olicom [2007] ECR I‑6675, paragraph 16 and the case‑law cited, and Case C‑362/07 Kip Europe and Others [2008] ECR I‑0000, paragraph 26).

30 In that regard, both the notes to the chapters of the CN and the explanatory notes to the HS are important means for ensuring the uniform application of the Tariff and as such may be regarded as useful aids to its interpretation (see Case C‑11/93 Siemens Nixdorf [1994] ECR I‑1945, paragraph 12; Case C‑382/95 Techex [1997] ECR I‑7363, paragraph 12; Case C‑339/98 Peacock [2000] ECR I‑8947, paragraph 10; and Olicom, paragraph 17).

31 The content of those notes must therefore be in conformity with the provisions of the CN and may not alter the meaning of those provisions (see, inter alia, Case C‑280/97 ROSE Elektrotechnik [1999] ECR I‑689, paragraph 23; Case C‑42/99 Eru Portuguesa [2000] ECR I‑7691, paragraph 20; and Case C‑495/03 Intermodal Transports [2005] ECR I‑8151, paragraph 48).

32 It is appropriate to note in that regard that, according to settled case‑law, the Council has conferred upon the Commission, acting in cooperation with the customs experts of the Member States, a broad discretion to define the subject-matter of tariff headings falling to be considered for the classification of particular goods. However, the Commission’s power to adopt the measures mentioned in Article 9(1)(a), (b), (d) and (e) of Regulation No 2658/87, such as additional notes, does not authorise it to alter the subject-matter of the tariff headings which have been defined on the basis of the HS – established by the Convention on the HS – whose scope the Community has undertaken, under Article 3 thereof, not to modify (Case C‑267/94 France v Commission [1995] ECR I‑4845, paragraphs 19 and 20, and Case C‑15/05 Kawasaki Motors Europe [2006] ECR I‑3657, paragraph 35).

33 In the present cases, it is therefore necessary to determine whether, by adopting Additional Note 5(b) in Regulations Nos 1776/2001, 2031/2001 and 1810/2004, the Commission amended heading 2009 7 of the NC, thereby exceeding the limits of the powers conferred upon it under Article 9 of Regulation No 2658/87.

34 Additional Note 5(b) to Chapter 20 of the CN, in the version applicable at the times material to the main proceedings, provides that fruit juices with added sugar, of a Brix value not exceeding 67, containing less than 50% by weight of fruit juices in their natural state obtained from fruits or by dilution of concentrated juice, lose their original character of fruit juices under heading 2009. It should be noted that a density exceeding 1,33 g/cm³ at 20 °C corresponds to the Brix value 67 and, accordingly, the substantive content of Additional Note 5(b) consequent upon Regulations Nos 1776/2001, 2031/2001 and 1810/2004 respectively is the same. In that regard, it is not in dispute that, pursuant to that note, fruit juice concentrates with a Brix value slightly below 67 are excluded from heading 2009.

35 The applicants in the main proceedings have claimed that, according to the wording of the tariff lines for heading 2009, the fruits’ own sugar content is not limited. They argue that in the present cases, the national authorities, by applying Additional Note 5(b) to Chapter 20 of the CN, made a notional calculation of the added sugar content. The imported apple juice concentrate contained 100% by weight of fruit juices and had undergone no processing other than water extraction, which had no effect on the original character of fruit juice. Thus they claim that that note is not applicable to apple juice concentrate containing no additional sugar. Furthermore, the HS does not provide that apple juice concentrates, of a Brix value slightly below 67, are to be excluded from heading 2009.

36 The Commission argues in Case C‑522/07 that the purpose of Additional Note 5(b) to Chapter 20 of the CN is to exclude goods which, because of their higher sugar content, have lost their original character of fruit juices. In accordance with recitals 1 and 5 in the preamble to Regulation No 1776/2001, the aim of that regulation – which is to exclude goods with a natural fruit juice content of less than 50% by weight – suggests, according to the Commission, that that note should be interpreted as meaning that the method for calculating the additional sugar is to be strictly mathematical.

37 According to the Commission, Additional Note 5(b) to Chapter 20 of the CN is applicable to all types of fruit juice, however they may be presented, and therefore to apple juice concentrates. However, the way in which heading 2009 is structured, as well as the settled case‑law according to which a fruit juice retains its original character of fruit juice by reason of its smell and its taste, render that note inapplicable in cases such as the disputes before the referring court, where the goods in question retain their character of apple juice by reason of their smell and their taste.

38 Furthermore, in Case C‑65/08, the Commission admits that, by adopting Additional Note 5(b) to Chapter 20 of the CN, it exceeded the powers conferred upon it under Article 9 of Regulation No 2658/87. For that reason, the Commission has amended that note by adopting Regulation No 360/2008 and by adding a new provision which states that point (b) of that note does not apply to natural fruit juice concentrates.

39 It should be noted at the outset that heading 2009, as amended by Regulations Nos 2388/2000, 2031/2001 and 1810/2004, covers apple juice concentrate in both the HS and the CN. Regulations Nos 2031/2001 and 1810/2004 lay down identical tariff lines for the subheadings which come within the subheading ‘Apple juice’, and include the provision in question, Additional Note 5(b) to Chapter 20 of the CN. Regulation No 2388/2000 does not contain that note and uses the criterion of a ‘density exceeding 1,33 g/cm³ at 20 °C’, which corresponds to the Brix value 67. Thus the distinctions made in the tariff headings laid down in Regulation No 2388/2000 are analogous to those made in Regulations Nos 2031/2001 and 1810/2004.

40 In the descriptions of the various types of apple juice coming under heading 2009, a distinction is made between goods classified under subheading 2009 71, of a Brix value not exceeding 20, and goods coming under sub‑heading 2009 79 ‘Other’. Subheading 2009 79 covers both categories of apple juice: those of a Brix value exceeding 67, and those of a Brix value exceeding 20 but not exceeding 67. The two subheadings 2009 71 and 2009 79 contain subcategories with the description ‘not containing added sugar’. Neither the wording of heading 2009 nor the way in which it is structured precludes it from applying to apple juice concentrates with specific Brix values.

41 Consequently, the broad logic of subheading 2009 79 clearly suggests that natural apple juice concentrates, of a Brix value slightly below 67, have not lost their character as fruit juices, contrary to what is stated in the versions at issue of Additional Note 5(b) to Chapter 20 of the CN, which excludes those juices from that subheading. That note excludes apple juice concentrate by means of a notional calculation of the added sugar content, giving a result of over 50% by weight. The apple juice concentrates in question, which have undergone water extraction and therefore have high Brix values, retain their original character. In these circumstances, there is no sugar added. The high level of added sugar, giving a result of over 50% by weight, is produced solely by the concentration brought about by the extraction of water. In consequence, by excluding apple juice concentrates from heading 2009, Additional Note 5(b) to Chapter 20 of the CN definitely amends the content of the tariff headings at issue, thereby exceeding the powers which Article 9 of Regulation No 2658/87 confers upon the Commission.

42 In the light of the foregoing considerations, it must be held that Additional Note 5 to Chapter 20 of the CN, as amended by Regulations Nos 1776/2001, 2031/2001 and 1810/2004, is invalid to the extent that it excludes natural apple juice concentrate from heading 2009.

Costs

43 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Eighth Chamber) hereby rules:

Additional Note 5(b) to Chapter 20 of Annex I to Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff, as amended by Commission Regulations (EC) No 1776/2001 of 7 September 2001, (EC) No 2031/2001 of 6 August 2001 and (EC) No 1810/2004 of 7 September 2004, amending Annex I to Regulation No 2658/87, is invalid to the extent that it excludes natural apple juice concentrate from heading 2009.

[Signatures]