Opinion of Mr Advocate General Elmer delivered on 16March1995. - Criminal proceedings against Patrick Colin and Daniel Dupré. - References for a preliminary ruling: Cour d'appel de Bourges and Tribunal de grande instance de Paris - France. - Refund for use of sugar in the manufacture of certain chemical products - Throat pastilles - Tonic beverages - Tariff classification. - Joined cases C-106/94 and C-139/94.



European Court reports 1995 Page I-04759



Opinion of the Advocate-General

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Introduction

1. Are throat pastilles with the brand names "Pulmoll" and "Valda" and mixtures with the brand names "Sangart-mixture" and "Quintonine" "pharmaceutical products" as referred to in Chapter 30 of the Common Customs Tariff?

That is the question which the Court has been asked to decide in this case.

Facts

2. Council Regulation (EEC) No 1010/86 of 25 March 1986 laying down general rules for the production refund on certain sugar products used in the chemical industry, (1) as amended by Article 9 of Commission Regulation (EEC) No 1714/88, (2) establishes rules for the grant of aid to undertakings which use sugar in the manufacture of certain chemical products, inter alia "pharmaceutical products" as dealt with in Chapter 30 of the Common Customs Tariff.

From 1987 to 1990 through its director, Patrick Colin, Distrithera SARL received FF 2 371 976.78 in sugar refunds under the said regulations by declaring red and green Pulmoll pastilles, Sangart-mixture and Quintonine as pharmaceutical products. Over the same period, through its director, Daniel Dupré, Laboratoires Valda SA received FF 1 728 760 in sugar refunds by declaring Valda pastilles, manufactured from a base of gelatine and gum arabic, as pharmaceutical products.

The Administration des Douanes et Droits Indirects did not, however, accept that they were pharmaceutical products and instead found that the pastilles fell under Common Customs Tariff Chapter 17 ("Sugar and sugar confectionery") and the mixtures under Common Customs Tariff Chapter 22 ("Beverages, spirits and vinegar") and demanded repayment of the refunds granted; they also brought criminal proceedings against the two companies' directors.

3. As far as the composition of the throat pastilles is concerned, it was explained to the Court that red Pulmoll pastilles consist essentially of sugar, terpene (3.8 mg), menthol (0.76 mg), amylocaine hydrochloride (0.152 mg), glycirrhizin (7.6 mg) and a binding agent, flavouring and colouring.

Green Pulmoll pastilles also consist essentially of sugar with menthol (1.52 mg), peppermint essence (0.19 mg), eucalyptus oil (0.76 mg) and a binding agent, flavouring and colouring.

Valda pastilles consist essentially of sugar and gelatine or gum arabic, to which is added menthol (3.28 mg per g), eucalyptol (0.451 mg per g), and thymol (1.6 mg per g), guaiacol (1.6 mg per g) and terpineol (1.6 mg per g).

Every bottle of Sangart mixture is made up, according to the evidence, of distilled water (100 cm3), syrup (25 cm3) and 90o alcohol (16 cm3) to which is added 0.005 g sodium arsenate, 0.02 g sodium nucleinate, 1 g nux vomica, 1.5 g calf liver extract and various flavourings.

100 g of Quintonine mixture contains, besides water, 96o alcohol and sugar, certain bitter and flavouring substances (cinnamon, cola, bitter orange, quinine), 0.033 g nux vomica and 0.068 g calcium glycerophosphate.

The questions referred for a preliminary ruling

4. In the criminal proceedings pending before the courts which made the references doubt has arisen with regard to the interpretation of the Common Customs Tariff.

In Case C-106/94 (Patrick Colin), the Cour d' Appel, Bourges, referred the following questions to the Court:

"° Having regard to their composition, presentation and use, do red Pulmoll pastilles fall within the scope of Commission Regulation (EEC) No 717/85 of 19 March 1985 on the classification of goods falling within subheading 17.04 D 1 or within the scope of Chapter 30 of the Common Customs Tariff, 'Pharmaceutical products' ° 30-4?

° Having regard to their composition, presentation and use do green Pulmoll pastilles fall within the scope of Commission Regulation (EEC) No 717/85 of 19 March 1985 on the classification of goods falling within subheading 17.04 D I or within the scope of Chapter 30 of the Common Customs Tariff 'Pharmaceutical products' ° 30-4?

° Having regard to its composition, presentation and use does Sangart mixture fall within the scope of Chapter 30 of the Common Customs Tariff (' Pharmaceutical products' )?

° Having regard to its composition, presentation and use does Quintonine fall within the scope of Chapter 30 of the Common Customs Tariff (' Pharmaceutical products' )?"

In Case C-139/94 (Daniel Dupré), the Tribunal de Grande Instance, Paris, referred the following questions to the Court:

"° May Commission Regulation (EEC) No 717/85 of 19 March 1985 on the classification of goods falling within subheading 17.04 D I of the Common Customs Tariff be interpreted as meaning that it refers to goods whose composition (percentage by weight) is different from that indicated in Article 1 of that regulation?

° If the reply to the first question is in the negative, must heading 30.04 of the Customs Nomenclature which refers to medicaments be interpreted as meaning that it includes a product which contains not only sugar but above all flavouring agents which may also have medicinal properties in such proportions that it is used essentially for therapeutic and prophylactic purposes?"

The relevant tariff headings

5. In both cases the facts relate to a period both before and after the introduction of the harmonized system nomenclature and the combined nomenclature ("CN"), which in 1988 replaced the Customs Cooperation Committee nomenclature. That change, which is not reflected in a consistent way in the questions raised, is not of any material importance for the cases before the Court. The Explanatory Notes which, according to the Court' s case-law may be an important aid to the interpretation of the scope of the various tariff headings (3) but do not have legally binding force, (4) to which reference is made below, are the Customs Cooperation Council (CCC) Explanatory Notes (as regards the Tariff and Statistical nomenclature) and the Harmonized System Explanatory Notes (as regards the CN).

6. Chapter 17 of the Customs Tariff deals with "Sugar and sugar confectionery" and heading 17.04 covers under both the Customs Cooperation Council Nomenclature and the CN "Sugar confectionery not containing cocoa".

The Customs Cooperation Council' s Notes on that position are identical to those relating to the Harmonized System:

"This heading covers most of the sugar preparations which are marketed in a solid or semi-solid form, generally suitable for immediate consumption and collectively referred to as sweetmeats or confectionery.

It includes inter alia:

... Preparations put up as throat pastilles or cough drops, consisting essentially of sugars (whether or not with other foodstuffs such as starch or flour) and flavouring agents (including such substances as benzyl alcohol, menthol, eucalyptol and tolu balsam). However, whenever a flavouring agent could also have medicinal properties and its proportion in each pastille or drop is such that the preparation is thereby given therapeutic or prophylactic uses, the pastilles or drops fall in heading 30.03."

The Nomenclature Committee states that heading 17.04 includes inter alia cough drops made up of sugar (99% approximately) to which has been added small proportions of various substances such as menthol, eucalyptol, aniseed, tolu, coltsfoot, marrubium, benzoin, etc. in a wrapping showing the commercial name of the product, its composition, and in some cases a drawing of a man coughing.

Commission Regulation No 717/85 (5) (6) of 19 March 1985, which is referred to in the questions referred by both courts, describes "cough and throat-irritation pastilles" as containing flavouring agents which may also have medicinal properties but, owing to the low proportions in which those agents are present, may not be regarded as medicaments pursuant to Note 1 to Chapter 30.

Article 1 of the regulation is worded as follows:

"Article 1

Cough and throat-irritation pastilles having the following composition (percentage by weight):

° sucrose, glucose and caramel: 99,5,

° camphor: 0,007,

° menthol: 0,207,

° eucalyptol: 0,069,

° Balsam Tolu: 0,003,

° thymol: 0,069,

° benzyl alcohol: 0,138,

shall be classified in the Common Customs Tariff under subheading:

17.04 Sugar confectionery, not containing cocoa."

7. Chapter 22 of the Customs Tariff is entitled "Beverages, spirits and vinegar". Heading 22.09 of the Customs Cooperation Council Nomenclature is identical to heading 22.08 of the CN and covers

"Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80% vol; spirits, liqueurs and other spirituous beverages; compound alcoholic preparations of a kind used for the manufacture of beverages".

According to the Explanatory Notes, the heading covers:

"Spirituous beverages, sometimes referred to as food supplements, designed to maintain general health or well-being. They may, for example, be based on extracts from plants, fruit concentrates, lecithins, chemicals, etc., and contain added vitamins or iron compounds."

8. Chapter 30 of the Customs Tariff is headed "Pharmaceutical products". Heading 30.03 of the Customs Cooperation Council Nomenclature, entitled "Medicaments (including veterinary medicaments)", corresponds to CN heading 30.04, which covers "Medicaments (excluding goods of heading No 3002, 3005 or 3006) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses or in forms or packings for retail sale".

The introductory Notes to Chapter 30 of the Customs Cooperation Council Nomenclature state:

"For the purposes of heading No 30.03, 'medicaments' means goods ... which are either:

(a) Products comprising two or more constituents which have been mixed or compounded together for therapeutic or prophylactic uses; or

(b) Unmixed products suitable for such uses put up in measured doses or in forms or in packings of a kind sold by retail for therapeutic or prophylactic purposes."

The Explanatory Notes of the Customs Cooperation Council and the Harmonized System Explanatory Notes are identically worded:

"... preparations put up as throat pastilles or cough drops, consisting essentially of sugars (whether or not with other foodstuffs such as gelatin, starch or flour) and flavouring agents (including such substances as benzyl alcohol, menthol, eucalyptol and tolu balsam) fall in heading 17.04 provided that whenever a flavouring agent could also have medicinal properties its proportion in each pastille or drop is such that the preparation is not thereby given therapeutic or prophylactic uses."

Procedure before the Court

9. Patrick Colin states that red Pulmoll pastilles certainly only contain low doses of active substances. What is decisive, however, is that those substances together have a therapeutic effect and therefore the pastilles should fall under Chapter 30 of the Customs Tariff relating to pharmaceutical products. The high sugar content is irrelevant in that connection. Sugar is very frequently used as a binding agent in products classified under Chapter 30. With particular reference to cough mixtures, Patrick Colin further pointed out that in the Bioforce judgment (7) the court recognized that a product should be classified under heading 30.04 and not under heading 22.08 despite a significant alcohol content, because the alcohol was present purely "to act as an adjuvant, a preservative and a vehicle for the active principles of the said product".

10. Daniel Dupré contends that Valda pastilles are medicaments according to the French implementing legislation relating to Council Directive 65/65/EEC of 26 January 1965 on the approximation of provisions laid down by law, regulation or administrative action relating to proprietary medicinal products (OJ, English Special Edition 1965-1966, p. 20) and moreover in his view should also be regarded as medicinal products under the Court' s case-law on the subject. Under Directive 65/65/EEC "[a]ny substance or combination of substances which may be administered to human beings or animals with a view to making a medical diagnosis or to restoring, correcting or modifying physiological functions in human beings or in animals" is considered a medicinal product. That requirement as to "mode of operation" is satisfied by Valda pastilles and their sugar content is immaterial in that respect. At the same time Valda pastilles satisfy the requirements of the directive with regard to their "description" as a medicinal product, since the product' s packaging clearly sets out the recommended dose and its composition, and also the product is subject to the national rules on the marketing of medicinal products. Finally, Valda pastilles are composed of ingredients other than those listed for throat pastilles which, according to the Customs Cooperation Council, should be classified under heading 17.04.

11. The Commission and the French Government take the view that both Pulmoll and Valda pastilles should fall under heading 17.04 since essentially they consist of sugar and the other ingredients are present in such minimal doses that the therapeutic or prophylactic effect required before a product can be classified under Chapter 30 of the Customs Cooperation Council or CN is not present.

The Commission points out, for example, that menthol, which is contained in both Valda and Pulmoll pastilles, is a flavouring which certainly can have certain medicinal properties. It is only, however, if the substance is present in such quantities that it has a therapeutic or prophylactic effect that this can result in classification under Chapter 30. The percentage by weight of menthol in Valda and Pulmoll pastilles is 0.0328% and 0.076% respectively, that is to say, even lower than in the pastilles referred to in Regulation No 717/85 which are classified under heading 17.04.

With particular reference to the Sangart and Quintonine mixtures, the French Government and the Commission state that these are products which, given their composition, are a "fortifier" or tonic, and which therefore, having regard to their alcohol content, should be classified under heading 22.09 (Customs Cooperation Council Nomenclature) and 22.08 (CN) respectively. This is supported by the Explanatory Notes to the Customs Cooperation Council nomenclature, according to which the heading covers "Spirituous beverages, sometimes referred to as food supplements, designed to maintain general health or well-being". The products serve in fact simply to facilitate digestion and counteract loss of appetite and fatigue. According to their "mode of operation" they are not intended to prevent or treat a particular illness and cannot therefore be classified as medicinal products. The majority of the ingredients of those products have no therapeutic effect, while the medicinal ingredients are either not effective with regard to particular illnesses or are present in too small doses to be able to have any therapeutic or prophylactic effect which could result in another classification.

Opinion

12. The questions in Case C-106/94 must be understood as a request for an interpretation of Chapter 30 of the Common Customs tariff and not as asking for a customs classification of particular products.

13. It follows from the settled case-law of the Court of Justice that, regard being had to the requirements of legal certainty, the decisive criterion for the tariff classification of goods must be sought in their objective characteristics and qualities, as defined in the headings of the Common Customs Tariff. Only in that way can the unequivocal application of the provision at issue be ensured for both the trader concerned and the authorities called upon to interpret it (judgment in Case C-338/90 Hamlin Electronics GmbH (8)).

14. The description of the product is not decisive. As Advocate General Gulmann stated in his Opinion in Case C-177/91 Bioforce, (9) it is "clear that the presentation of a product is not in itself sufficient for it to be regarded as a medicinal product. To allow the presentation of a product in itself to be decisive for its tariff classification might cause a product to be covered by a customs heading merely on grounds of a special presentation, even though its objective properties did not correspond to the criteria laid down in the relevant heading. That would conflict with the principle of legal certainty and might lead to arbitrary discrimination".

15. Nor, in relation to the Customs Tariff, is it decisive how a given product stands in relation to the Community or individual Member State' s legislation on trade in medicinal products. That is apparent from the general notes to Chapter 30 in the Explanatory Notes to the Common Customs Tariff where it is stated that: "The description of a product as a medicament in Community legislation ... or in the national legislation of the Member States, or in any pharmacopoeia, is not the deciding factor in so far as its classification in this chapter is concerned."

The concept of medicinal product as laid down in Council Directive 65/65/EEC, is therefore different from that of the Customs Tariff. That directive "is designed to eliminate ° at least in part ° obstacles to trade in proprietary medicinal products within the Community whilst at the same time attaining the essential objective of safeguarding public health". (10) In order to promote trade and at the same time protect public health the directive makes a relatively broad range of products subject to the supervision laid down in the medicinal products legislation.

16. In contrast, the criterion for tariff classification as a medicinal product is its therapeutic or prophylactic application. The Explanatory Notes to both heading 30.03 in the Customs Cooperation Council Nomenclature and CN heading 30.04 are very clear on that point. (11) The addition of substances with a certain medicinal effect does not automatically lead to classification under Chapter 30.

17. That point of principle also underlies Commission Regulation No 717/85 to which the questions refer. That regulation classifies certain cough and throat-irritation pastilles containing substances which in certain dosages may have medicinal properties under heading 17.04.

That regulation may not, moreover, be regarded as stating anything more than that a certain specific product with a certain specific composition is covered by heading 17.04 and it does not indicate the heading under which throat pastilles with a different composition are to be classified.

The first question from the Tribunal de Grande Instance, Paris, as to whether Regulation No 717/85 refers to goods whose composition (percentage by weight) is different from that indicated in Article 1 of that regulation should therefore be answered in the negative.

18. In its observations, the Commission undertook a detailed review of the individual active substances in the throat pastilles involved in the case. That review reveals that active substances are present in such low doses that the original position ° classification as sugar confectionery under heading 17.04 ° should be maintained, since the principal ingredient is sugar.

Thus red Pulmoll pastilles contain, for instance, the substance terpene and Valda pastilles contain thymol. Despite the fact that those substances, according to the medical evidence available, may in certain doses have a therapeutic or prophylactic effect as a medicinal product, it must, however, be noted that they are present in such low quantities in the pastilles in question that even with the maximum daily intake of pastilles recommended on the packing, they would have no effect of that sort. (12) The throat pastilles should therefore be classified under Chapter 17, heading 17.04 "Sugar confectionery, not containing cocoa", since no objective characteristics have been shown to indicate that they fall under any other chapter and tariff headings.

19. The principal ingredients of Sangart-mixture and Quintonine are distilled water, sugar and alcohol, and both products are intended to be drunk. Thus they should be classified under heading 22.09 of the Customs Cooperation Council Nomenclature (CN heading 22.08) as "Undenatured ethyl alcohol of an alcoholic strength by volume of less than 80% vol; spirits, liqueurs and other spirituous beverages; compound alcoholic preparations of a kind used for the manufacture of beverages", unless objective characteristics are shown to indicate that they should be classified under other chapters and tariff headings.

It is expressly stated in introductory Note 1(a) to Chapter 30 that the Chapter does not cover "[f]oods or beverages (such as dietetic, diabetic or fortified foods, food supplements, tonic beverages and mineral waters)". Such products fall under other tariff headings whose description corresponds to their objective properties.

In its observations, the Commission undertook a detailed review of the very few active substances in the mixtures. For example, it is stated that sodium arsenate is traditionally used in the treatment of anaemic conditions, but since each bottle of Sangart mixture contains per 141 cm3 only 0.005 mg of the substance, any therapeutic effect must be excluded. Since therefore no objective characteristics have been shown for the mixtures in question which could lead to a departure from the original position, on the same grounds as those given for the throat pastilles it must be concluded that these products too should not be classified under Chapter 30.

Conclusion

In view of the foregoing I would propose that the Court reply to the questions referred to it as follows:

° Commission Regulation (EEC) No 717/85 of 19 March 1985, as amended by Commission Regulation (EEC) No 2723/90 of 24 September 1990, should be interpreted as meaning that it does not cover goods whose composition (percentage by weight) is other than that referred to in Article 1 of the Regulation.

° The Common Customs Tariff should be interpreted as meaning that the definition of "Pharmaceutical products" in Chapter 30 does not include throat pastilles and mixtures with the composition of the products in question in this case.

(*) Original language: Danish.

(1) ° OJ 1986 L 94, p. 9.

(2) ° OJ 1988 L 152, p. 23.

(3) ° See, for instance, the judgment in Case 200/84 Daiber [1985] ECR 3363.

(4) ° See the judgment in Case C-35/93 Eisbein [1994] ECR 2655.

(5) ° OJ 1985 L 78, p. 13.

(6) ° As the Commission points out, Regulation No 717/85 relates to the Customs Cooperation Council Nomenclature. Identical rules under the CN were, however, introduced by Commission Regulation No 2723/90 of 24 September 1990 (OJ 1990 L 261, p. 24).

(7) ° Case C-177/91 [1993] ECR I-45.

(8) ° [1992] ECR I-2333, at paragraphs 8 and 9.

(9) ° See footnote 7.

(10) ° See the judgment in Case 227/82 Van Bennekom [1983] ECR 3883.

(11) ° See paragraph 8 above.

(12) ° According to Martindale, The Extra Pharmacopoeia, London, 1989, the recommended daily dose of terpene is, for example, 500-800 mg, and thymol is effective in a daily dose of 3 g. Red Pulmoll pastilles contain 3.8 mg terpene and Valda-pastilles 1.6 mg thymol.