CELEX: 61983CC0234
Language: en
Date: 1984-10-25 00:00:00
Title: Opinion of Mr Advocate General Mancini delivered on 25 October 1984. # Gesamthochschule Duisburg v Hauptzollamt München - Mitte. # Reference for a preliminary ruling: Finanzgericht München - Germany. # Common Customs Tariff - Exemption for scientific instruments and apparatus - Microprocessor development system. # Case 234/83.

OPINION OF MR ADVOCATE GENERAL MANCINI
      delivered on 25 October 1984 (
            *1
         )
      
         Mr President,
      
      
         Members of the Court,
      
      
               1. 
            
            
               The Court is once again called upon to interpret Regulation No 1798/75 of the Council of 10 July 1975 on the importation free of Common Customs Tariff duties of educational, scientific and cultural materials (Official Journal 1975 L 184, p. 1). Essentially, what must be determined is the meaning of the expression ‘scientific instruments and apparatus’ in Article 3 (1) of that regulation. The Court must in particular decide, first, what are the particular characteristics which define the ‘scientific’ nature of an activity, and, secondly, whether only those instruments and apparatuses which are intended to be used solely for scientific activities are to be regarded as ‘scientific’.
               In 1978 the Gesamthochschule Duisburg imported into the Federal Republic of Germany, from the United States, an apparatus described as a ‘microprocessor development system’ (Mikroprozessor-Entwicklungssystem), to be used in a research product on nonparametric methods of signal detection. The importer applied to the competent customs office (Central Munich) for exemption from customs duty. At first, the office granted that request, though only provisionally. Later, however, having had the Customs Laboratory and Training College, Munich, carry out investigations, it withdrew the exemption and demanded payment from the Gesamthochschule of more than DM 2000 in respect of customs duty and about DM 250 in respect of value added tax. The reason it gave for its decision was that the apparatus was not of a scientific nature, because it could be used for various purposes which did not display the characteristics which identify an activity as ‘scientific’.
               The importer then brought proceedings before the Finanzgericht München [Finance Court, Munich]. By an order dated 26 September 1983, that court stayed proceedings and asked the Court of Justice to interpret the expression ‘scientific instruments and apparatus’ in the original version of Article 3 (1) of Regulation No 1798/75 of the Council of 10 July 1975. In particular, it submitted four questions :
               
                        (1)
                     
                     
                        Does the first indent of Article 3 (3) of Regulation No 1798/75, as amended by Regulation No 1027/79 of 8 May 1979, contain an appropriate interpretation of the words ‘scientific instruments and apparatus’ within the meaning of the original version of Article 3 (1) of Regulation No 1798/75, and is the first-mentioned provision therefore to be regarded as applying in substance even in relation to the period before its entry into force on 1 January 1980?
                     
                  If Question 1 is answered in the affirmative:
               
                        (2)
                     
                     
                        Does the same apply to the interpretation of the words ‘objective technical characteristics’ by Article 5 (1) of Regulation No 2784/79 of 12 December 1979?
                     
                  
                        (3)
                     
                     
                        What is the correct interpretation of the words ‘scientific activities’ in the first indent of Article 3 (3) of Regulation No 1798/75, as amended by Regulation No 1027/79? Do they also cover, in addition to pure scientific and applied research, activities for developing new products, techniques and processes or improving existing ones on the basis of scientific knowledge and by applying scientific methods, and is it relevant whether such activities are carried on within scientific establishments or elsewhere? What other criteria may be relevant in order to distinguish scientific activities from other activities?
                     
                  If Question 1 is answered in the negative:
               
                        (4)
                     
                     
                        What are the criteria determining whether an instrument or apparatus is particularly suitable, by reason of its objective characteristics, for pure scientific research?
                     
                  
         
               2. 
            
            
               The purpose of the first question is to obtain an interpretation of the expression ‘scientific instruments and apparatus’. The Finanzgericht wishes to know if the definition of that expression to be found in Article 1 of Regulation No 1027/79 of 8 May 1979 (Official Journal 1979 L 134, p. 1) can be regarded as an appropriate interpretation of Regulation No 1798/75 and can therefore also be applied to events, such as those in the main proceedings, which took place before the entry into force of that provision.
               It should be borne in mind that the original version of Regulation No 1798/75 did not provide a detailed definition of the expression in question. The purpose of that regulation was to implement the Florence Agreement on the Importation of Educational, Scientific and Cultural Materials, drawn up on the initiative of Unesco in 1950, (United Nations Treaty Series Vol. 131, p. 26) Article 3 (1) of the regulation merely states that:
               ‘Scientific instruments and apparatus ... mported exclusively for educational purposes or for pure scientific research may be admitted free of Common Customs Tariff duties provided:
               
                        (a)
                     
                     
                        they are intended for:
                        either public establishments principally engaged in education or scientific research, including those departments of public establishments which are principally engaged in education or scientific research;
                        or private scientific or educational establishments authorized by the competent authorities of the Member States to receive such articles duty-free,
                     
                  and provided
               
                        (b)
                     
                     
                        instruments or apparatus of equivalent scientific value are not being manufactured in the Community.’
                     
                  Article 3 (3) provides that ‘pure scientific research’ means research carried out for noncommercial purposes.
               When asked to interpret those provisions by the Tariefcommissie, Amsterdam, the Court stated that ‘the words “scientific instrument or apparatus” ... refer to an instrument or apparatus possessing objective characteristics which make it particularly suitable for pure scientific research’. The Court also made clear that: ‘Since such a purpose must be assessed objectively, on the basis only of those characteristics, the fact that the instrument or apparatus is used, in industry or elsewhere, for commercial purposes does not of itself necessarily exclude its being of a scientific nature within the meaning of Regulation No 1798/75, and hence its right to exemption from customs duties..., provided that the other requirements laid down for those purposes are also satisfied’ (judgment of 2 February 1978, Case 72/77, Universiteitskliniek v Inspecteur der Invoerrechten en Accijnzen, [1978] ECR 189).
               It was only in Regulation No 1027/79 that the words in question were precisely defined. According to the first indent of Article 3 (3) of Regulation No 1798/75, as amended by Regulation No 1027/79, they mean any instrument or apparatus ‘which, by reason of its objective technical characteristics and the results which it makes it possible to obtain, is mainly or exclusively suited to scientific activities’.
               In my opinion, however, that definition adds nothing significant to what it was already possible to extract, and what the Court extracted from an interpretation of the original provision. As I have already observed, the Court held in the Universiteitskliniek case that the instrument must possess objective characteristics such as to make it particulary suitable for scientific research. The only new element required by the 1979 provision is that the characteristics should be ‘technical’. However, that adjective is already included in what the Court has said. I cannot imagine what characteristic an apparatus might have which could be objectively considered to render the apparatus suitable for scientific activities and which is not also, and necessarily, technical.
               That is not all. Recently, when considering the original version of Regulation No 1798/75, the Court did not in fact exclude the possibility of relying on the version as amended in 1979 when interpreting the original version (judgment of 10 November 1983, Case 300/82, Gesamthochschule Essen v Hauptzollamt Düsseldorf, [1983] ECR 3643). I conclude from that that the reply to the first question submitted by the national court should be in the affirmative: the definition contained in Article 1 of Regulation No 1027/79 is an ‘appropriate interpretation’ of Regulation No 1798/75.
            
         
               3. 
            
            
               The second question asks the Court to interpret the term ‘objective technical characteristics’ in Article 5 of Commission Regulation No 2784/79 of 12 December 1979 (Official Journal 1979 L 318, p. 32). Here too, the Finanzgericht wishes to know if the definition of that term contained in Article 5 of Regulation No 2784/79 is to be regarded as applying to the period before the entry into force of that regulation.
               The latter contains provisions adopted in implementation of Regulation No 1798/75. Such provisions were originally laid down elsewhere, namely in Regulation No 3195/75 of the Commission of 2 December 1975 (Official Journal 1975 L 316, p. 17), which was replaced by the regulation to which the German court is referring so as to take account of the amendments made to the basic provisions by Council Regulation No 1027/79. I have already said something about the expression at issue in connection with the first question. That expression, of course, was not in the original version of Regulation No 1798/75 and was introduced into the definition of ‘scientific instrument or apparatus’ by Regulation No 1027/79.
               Article 5 (1) of Regulation No 2784/79 provides that: ‘... the “objective technical characteristics” of a scientific instrument or apparatus shall be understood to mean those characteristics resulting from the construction of that instrument or apparatus or from adjustments to a standard instrument or apparatus which make it possible to obtain high-level performances above those normally required for industrial or commercial use. Where it is not possible to establish clearly on the basis of its objective technical characteristics whether an instrument or apparatus is to be regarded as a scientific instrument or apparatus, reference shall be made to the general uses in the Community of instruments or apparatus of the type for which duty-free admission is requested. If this examination shows that the instrument or apparatus in question is used mainly for scientific purposes, it shall be deemed to be of a scientific nature.’
               As the Commission has rightly pointed out, those criteria do not differ from the ones contained in Regulation No 1798/75. In fact, logic and experience shows that the capacity to perform at a high level is the essential characteristic of an instrument or apparatus used for the purposes of education or for scientific research (as the original version of Article 3 (1) of Regulation No 1798/75 provided) or ‘particularly suitable for pure scientific research’ (as the Court, interpreting the latter provision, stated in the Universiteitskliniek judgment).
               Article 5 of Regulation No 2784/79 thus provides appropriate criteria for the interpretation of the term of ‘objective technical characteristics’ contained in the original version of Regulation No 1798/75. Moreover, those criteria are sufficiently wide to exclude the need to rely on other facts in evaluating situations arising before the entry into force of that provision.
            
         
               4. 
            
            
               The third question concerns the interpretation of the term ‘scientific activities’ in the first indent of Article 3 (3) of Regulation No 1798/75, as amended by Regulation No 1027/79. According to that provision, any instrument or apparatus ‘which, by reason of its objective technical characteristics and the results which it makes possible to obtain, is mainly or exclusively suited to scientific activities’ is to be regarded as ‘scientific’. The Finanzgericht München asks this Court whether such activities, in addition to pure and applied scientific research, include activities for developing new products, techniques and processes or improving existing ones on the basis of scientific knowledge and whether it is relevant whether such activities are carried on within scientific establishments.
               Naturally, such a request does not in any way require the Court to define the concept of ‘science’. It is sufficient, I think, for the Court to identify the meaning to be given to the concept of scientific activity in the context of the rules relating to exemption from customs duties.
               As I have already observed, that concept allows the ‘scientific’ character of an instrument or apparatus to be identified. That character is present when the instrument is ‘exclusively or mainly’ suited to scientific activities and when the activities are carried on within public or private establishments engaged in education or research. It is in fact in regard to the latter, and only the latter, that the exemption from customs duties facilitates ‘the free exchange of ideas, ... the exercise of cultural activities and scientific research within the Community’, as is required by the first recital in the preamble to Regulation No 1798/75. On the other hand, the exemption cannot be granted if the apparatus is being imported for commercial purposes, and that is so even if, as is the case in the field of industrial high technology, it is necessary to have considerable scientific knowledge in order to use the apparatus.
               If I am right in what I say, it seems to me that the correct definition of ‘scientific activities’ must put the accent on the nature of the person who is to benefit from the exemption. The activities of establishments engaged in education and research are by definition directed to the acquisition, development, exposition and dissemination of scientific knowledge. On the other hand, their activities do not normally involve, at least not directly, making use of scientific knowledge for the purpose of producing goods or providing services. Moreover, those activities are normally of a kind which requires instruments capable of performance at a high level, as required by Article 5 of Regulation No 2784/79.
            
         
               5. 
            
            
               For all the foregoing reasons, I propose that the Court should reply as follows to the questions submitted by the Finanzgericht München by an order dated 26 September 1983, in the proceedings between the Gesamthochschule Duisburg and the Hauptzollamt München-Mitte :
               
                        (1)
                     
                     
                        In interpreting the term ‘scientific instrument or apparatus’, in the original version of Article 3 (1) of Regulation No 1798/75, it is possible to refer to the definition introduced into that article by Regulation No 1027/79. That definition can therefore also be applied to facts which occurred before the latter regulation entered into force.
                     
                  
                        (2)
                     
                     
                        In order to ascertain the Objective technical characteristics' of an instrument or apparatus, the possibility of obtaining high-level performances above those normally required for industrial or commercial use, as provided for in Article 5 (1) of Regulation No 2784/79 of 12 December 1979, is a criterion to which reference may legitimately be made even in respect of the period preceding the entry into force of that provision.
                     
                  
                        (3)
                     
                     
                        The term ‘scientific activities’, in the first indent of Article 3 (3) of Regulation No 1798/75, as amended by Regulation No 1027/79, must be interpreted as including activities carried on by a public or private establishment engaged in education or research for the purpose of furthering the acquisition, development, exposition or dissemination of scientific knowledge, when those activities are carried out with instruments from which it is possible to obtain high-level performances.
                     
                  
         (
            *1
         )	Translated from the Italian.