CELEX: 62003CJ0400
Language: en
Date: 2004-07-08
Title: Judgment of the Court (Fourth Chamber) of 8 July 2004.#Waterman SAS, formerly Waterman SA v Directeur général des douanes et droits indirects.#Reference for a preliminary ruling: Tribunal d'instance du VIIe arrondissement de Paris - France.#Common Customs Tariff - Combined Nomenclature - Tariff heading - Pen cases.#Case C-400/03.

Case C-400/03
      Waterman SAS, formerly Waterman SA
      v
      Directeur général des douanes et droits indirects
      (Reference for a preliminary ruling from the Tribunal d’instance du VIIe  arrondissement de Paris)
      
      (Common Customs Tariff – Combined Nomenclature – Tariff heading – Pen cases)
      Summary of the Judgment
      Common Customs Tariff – Tariff headings – Explanatory Notes to the Combined Nomenclature – Subheadings 4202 12 11 and 4202
            12 19 – Not invalid
      
      The Explanatory Notes to the Combined Nomenclature are a valid aid to the interpretation of the tariff provided that their
         content is in accordance with the actual provisions of the common customs tariff and do not alter the meaning of its provisions.
         Such is the case with the Explanatory Notes to subheadings 4202 12 11 and 4202 12 19. They are contrary neither to the terms
         of the headings and subheadings at issue nor to the applicable notes nor to the rule mentioned in paragraph 6 of the general
         rules for the interpretation of the Combined Nomenclature, according to which the classification of goods is to be determined
         according to the terms of subheadings. In particular, those Explanatory Notes are an extension of Additional Note 1 to Chapter
         42 of the Combined Nomenclature, in that they specify that where the outer layer visible to the naked eye is sheeting of plastic,
         the process by which that sheeting was obtained is irrelevant for the purposes of tariff classification. In addition, in considering
         equivalent two technical processes which result in an identical product, namely an outer surface of plastic, they comply with
         the decisive criterion for the tariff classification of goods which lies in their objective characteristics and qualities,
         as defined in the relevant heading of the Common Customs Tariff and in the notes to the relevant sections or chapters. It
         follows that there is no information such as to affect the validity of the Explanatory Notes in question.
      
      (see paras 16, 19, 21, 27, 29, 32, operative part)

      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
            
            JUDGMENT OF THE COURT (Fourth Chamber)8 July 2004(1)
         
         
               (Common Customs Tariff  –  Combined Nomenclature  –  Tariff heading  –  Pen cases)
               
             In Case C-400/03,
             REFERENCE to the Court under Article 234 EC by the Tribunal d'instance du VIIe arrondissement de Paris (France) for a preliminary ruling in the proceedings pending before that court between 
            
            
            
            Waterman SAS, formerly Waterman SA
            
            and
            
            Directeur général des douanes and droits indirects,
            
             on the conformity of the explanatory notes for subheadings 4202 12 11 and 4202 12 19 of the Combined Nomenclature contained
            in the Commission's communication entitled ‘Explanatory Notes to the Combined Nomenclature of the European Communities’ (OJ 2000
            C 199, p. 1) with the combined nomenclature of the Common Customs Tariff 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), as amended
            by Commission Regulation (EC) No 2263/2000 of 13 October 2000 (OJ 2000 L 264, p. 1),
            
            THE COURT (Fourth Chamber),,
            
             composed of: J.N. Cunha Rodrigues, President of the Chamber,  J.-P. Puissochet and K. Lenaerts (Rapporteur), Judges, 
            
             Advocate General:  C. Stix-Hackl, Registrar:  L. Hewlett, Principal Administrator,
            
            
            after considering the written observations submitted on behalf of:
               
               –
                Waterman SAS,  by F. Goguel, avocat,
               
               –
                the French Government, by A. Colomb and  G. de Bergues, acting as Agents,
               
               –
                the Commission of the European Communities, by C. Schieferer and X. Lewis, acting as Agents,
               
               
            
            
            
            
            after hearing the oral observations of Waterman SAS, the French Government and the Commission at the hearing on 1 April 2004,
            
            having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
         gives the following
         
         
         Judgment
         1
            
          By judgment of 21 August 2003, lodged at the Court Registry on 26 September 2003, the Tribunal d’instance du VIIe arrondissement de Paris (District Court of the VIIth arrondissement, Paris) referred to the Court for a preliminary ruling under Article 234 EC a question on the conformity of
         the explanatory notes for subheadings 4202 12 11 and 4202 12 19 of the Combined Nomenclature, contained in the Commission’s
         communication entitled ‘Explanatory Notes to the Combined Nomenclature of the European Communities’ (OJ 2000 C 199, p. 1)
         with the Combined Nomenclature of the Common Customs Tariff 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), as amended by
         Commission Regulation (EC) No 2263/2000 of 13 October 2000 (OJ 2000 L 264, p. 1).
         
         
         
         2
            
          That question was raised in proceedings between the company Waterman SAS, the successor in title to Waterman SA (hereinafter
         ‘Waterman’) following a merger, and the Director-General of Customs and Indirect Duties in respect of the tariff classification
         of pen cases imported by that company into the European Union.
         
         
            
               Legal framework
            
         
         3
            
          The version of the Combined Nomenclature (hereinafter ‘the CN’) which applied at the material time is set out in Annex I to
         Regulation No 2263/2000. The second section of that annex contains a Chapter 42, entitled ‘Leather articles; saddlery and
         harness; travel goods, handbag similar; articles of animal gut’.
         
         
         
         4
            
          That Chapter includes a heading 4202, which refers inter alia to ‘jewellery boxes … and similar containers, of leather or
         of composition leather, of sheeting of plastics, of textile materials, of vulcanised fibre or of paperboard, or wholly or
         mainly covered with such materials or with paper’.
         
         
         
         5
            
          Subheading 4202 92 19 applies to the goods referred to in the preceding paragraph when they have an ‘outer surface of plastic
         sheeting or of textile materials’. At the material time, the conventional tax rate for those goods was 9.7%.
         
         
         
         6
            
          Subheading 4202 99 00 relates to the goods mentioned in paragraph 4 above when they have an outer surface which is not of
         leather, of composition leather or of patent leather or an outer surface of plastic sheeting or of textile materials. At the
         material time, the rate of conventional tax on those goods was 3.7%.
         
         
         
         7
            
          The Additional [sic] Note to Chapter 42 of the Combined Nomenclature states that ‘for the purposes of the subheadings of heading 4202, the term
         “outer surface” shall refer to the material of the outer surface of the container being visible to the naked eye, even where
         this material is the outer layer of a combination of materials which makes up the outer material of the container’.
         
         
         
         8
            
          The Explanatory Note for subheadings 4202 92 11 to 4202 92 19, set out in the Commission Communication referred to in paragraph
         1 above, refers back to the explanatory notes for subheadings 4202 12 11 and 4202 12 19 (hereinafter ‘the explanatory notes
         in question’), which clarify the term ‘in the form of plastic sheeting’ as follows:
         ‘If a container has an outer material that is a combination of materials where the outer layer being visible to the naked
         eye is plastic sheeting (e.g., woven fabric of textile fibres in combination with plastic sheeting) it is irrelevant for classification
         purposes whether the sheeting was manufactured separately before creating the combined material or whether the plastic layer
         is the result of applying a coating or covering of plastics to the material (e.g., woven fabric of textile fibres), provided
         that the resultant outer layer being visible to the naked eye has the same visual appearance as an applied layer of manufactured
         plastic sheeting’. 
         
         The main proceedings and the question referred for a preliminary ruling
         
         9
            
          On 11 April 2001, Waterman sent the French customs authority a request for binding tariff information (BTI) for the purpose
         of classifying a pen case, the ‘Man Bille Coverlux’ case, described as follows in its request: 
         ‘Shell (base and cover) in plastic 
          Steel spring hinge
          Interior lining of satin
          Foam padded cover
          External coating of the case in Coverlux
         …
          External cover of plain board’.
         
         
         
         10
            
          In its request, Waterman asked for the product to be classified under subheading 4202 99 00.
         
         
         
         11
            
          On 28 June 2001, the French customs authority issued BTI, numbered FR-E4-2001-001470, which classifies the goods in question
         under subheading 4202 92 19. On the basis of two analyses by the Laboratoire interrégional des douanes de Paris (inter-regional
         laboratory of the Paris customs service), that authority took the view that the case in question had an outer surface of plastic
         sheeting with an average thickness of 0.12 millimetres. In support of the BTI, it relied inter alia on the explanatory notes
         in question.
         
         
         
         12
            
          On 11 September 2001, Waterman brought proceedings against the Directeur général des douanes and droits indirects before the
         Tribunal d’instance du VIIe arrondissement de Paris, seeking annulment of the BTI and a ruling that the goods in question come under subheading 4202 99 00.
         
         
         
         13
            
          By judgment of 5 February 2002, that court asked the Commission de conciliation et d’expertise douanière to establish and
         describe the composition and the manufacturing process of the outer surface of the goods. In an opinion of 22 May 2002, that
         commission concluded that ‘the outer surface of the cases submitted for examination is composed of acrylic polymer combined
         with colour pigments and that this mixture was roll-coated on in a semi-liquid state before the cases were moulded’.
         
         
         
         14
            
          Asked whether a material of that composition, obtained by such a process, comes under the subheading 4202 92 19, chosen by
         the French customs authority on the basis of the Explanatory Notes in question, the Tribunal d’instance du VIIe arrondissement de Paris decided to stay proceedings and to refer the following question to the Court for a preliminary ruling:
         ‘Is the Explanatory Note to the Combined Nomenclature relating to subheadings 4202 12 11 and 4202 12 19, which clarifies the
         term “in the form of plastic sheeting” as follows: “If a container has an outer material that is a combination of materials
         where the outer layer being visible to the naked eye is plastic sheeting (e.g., woven fabric of textile fibres in combination
         with plastic sheeting) it is irrelevant for classification purposes whether the sheeting was manufactured separately before
         creating the combined material or whether the plastic layer is the result of applying a coating or covering of plastics to
         the material … provided that the resultant outer layer being visible to the naked eye has the same visual appearance as an
         applied layer of manufactured plastic sheeting”, contrary to the tariff?’
         
         Concerning the question referred for a preliminary ruling
         
         15
            
          First, it should be pointed out that the question does not apply to the interpretation of the CN subheadings 4202 92 19 and
         4202 99 00 relied on, respectively, by the French customs authority and by Waterman for the purpose of tariff classification
         of the pen cases importred by the latter into the European Union, but rather to the validity of the Explanatory Notes in question,
         which apply to CN subheadings 4202 92 11 to 4202 92 19.
         
         
         
         16
            
          It should be recalled that the Explanatory Notes to the Combined Nomenclature are a valid aid to the interpretation of the
         tariff provided that their content is in accordance with the actual provisions of the common customs tariff and do not alter
         the meaning of its provisions (Case 798/79 Chem-Tec [1980] ECR 2639, paragraphs 11 and 12).
         
         
         
         17
            
          In the present case, the Explanatory Notes in question state that if a container has an outer material that is a combination
         of materials where the outer layer being visible to the naked eye is plastic sheeting, it is irrelevant for tariff classification
         purposes whether that sheeting was manufactured before creating the combined material of which it is the visible outer layer
         or whether the plastic layer is the result of applying a coating or covering of plastics to the material (textile materials,
         for example), provided that that second manufacturing process results in an appearance analogous to that resulting from the
         first process.
         
         
         
         18
            
          As a result, those Notes assimilate, for the purpose of interpreting the expression ‘plastic sheeting’ within the meaning
         of the Combined Nomenclature, the plastic layer obtained by applying a coating or covering of plastic to material with plastic
         sheeting manufactured prior to its being applied to the container, provided that they have the same visual appearance. With
         that reservation, those Notes consider equivalent two processes resulting in an outer surface of plastic for the containers
         which come under Nomenclature heading 4202, that is, the process which consists in affixing manufactured plastic sheeting
         and that which consists in coating or covering a material (textile, for example) with plastic.
         
         
         
         19
            
          In the light of the case-law cited in paragraph 16 above, it is appropriate to examine whether the Explanatory Notes in question
         are consistent with the terms of the relevant headings and subheadings and their accompanying notes and with the rule mentioned
         in paragraph 6 of the general rules for the interpretation of the Combined Nomenclature, under the first heading of its first
         part, to which those Explanatory Notes are contrary, according to Waterman. 
         
         
         
         20
            
          As regards the terms of those headings and subheadings, namely heading 4202 and subheadings 4202 92 11 to 4202 92 19 of the
         Nomenclature, it should be pointed out that those do not specify what must be understood by ‘plastic sheeting’.
         
         
         
         21
            
          The fact cited by Waterman in its written observations that the Explanatory Notes in question use the terms ‘sheet’ and ‘layer’
         interchangeably, whilst the second does not appear in the heading and subheadings at issue and is not synonymous with the
         first in everyday usage, does not permit the inference that those Notes are contrary to the terms of that heading and those
         subheadings and to the rule mentioned in paragraph 6 of the general rules for the interpretation of the Combined Nomenclature,
         according to which the classification of goods is to be determined according to the terms of subheadings.
         
         
         
         22
            
          The term ‘layer’ in the Explanatory Notes in question serves to designate the product of a technical process which must be
         of ‘plastic material’ and which, under those notes, can be assimilated to plastic sheeting within the meaning of subheadings
         4202 92 11 to 4202 92 19 of the CN only if it has the same appearance as such sheeting.
         
         
         
         23
            
          As the French Government observes, it must also be pointed out that Additional Note 1 of Chapter 42 of the Combined Nomenclature
         (see paragraph 7 above), which concerns, inter alia, the containers with an outer surface in the form of plastic sheeting
         referred to in CN subheadings 4202 92 11 to 4202 92 19, uses the term ‘layer’ to clarify the notion of ﾀﾘouter surface’ within
         the meaning of those subheadings, among others.
         
         
         
         24
            
          As regards the Notes which apply to the relevant heading and subheadings, it must be pointed out that Section VIII of the
         CN, which includes Chapter 42, does not include a Note. That chapter for its part contains three notes and an Additional Note.
         
         
         
         
         25
            
          Notes 1 and 2 exclude a series of articles from Chapter 42 and heading 4202 of the Combined Nomenclature, respectively, while
         Note 3 concerns heading 4203. Accordingly, none of those Notes is relevant for the purpose of determining the validity of
         the Explanatory Notes concerned.
         
         
         
         26
            
          Additional Note 1, set out in paragraph 7 above, states that for the purposes of the subheadings of CN heading 4202, the joining
         of the outer surface of the container to one of the types of surface referred to in those subheadings must take place on the
         basis of material visible to the naked eye, even where that material is only the outer layer of a combination of materials
         which makes up the outer material of the container. 
         
         
         
         27
            
          The Explanatory Notes in question are an extension of that Additional Note, in that they specify that in one of the cases
         covered by the note, namely where the outer layer visible to the naked eye is sheeting of plastic, the process by which that
         sheeting was obtained is irrelevant for the purposes of tariff classification.
         
         
         
         28
            
          Note 10 of Chapter 39 of the Nomenclature, relied on by Waterman, is not relevant in assessing the validity of the Explanatory
         Notes in question, since those concern subheadings under Chapter 42. Moreover, that note does not include a definition of
         plastic sheeting with which those Explanatory Notes could conflict.
         
         
         
         29
            
          It must be pointed out that in considering equivalent two technical processes which result in an identical product, namely
         an outer surface of plastic, the explanatory notes in question comply with the case-law under which the decisive criterion
         for the tariff classification of goods lies in their objective characteristics and qualities, as defined in the relevant heading
         of the Common Customs Tariff and in the notes to the relevant sections or chapters (Case 200/84 Daiber [1985] ECR 3363, paragraph 13; Case C-11/93 Siemens Nixdorf [1994] ECR I-1945, paragraph 11; and Case C-339/98 Peacock [2000] ECR I-8947, paragraph 9).
         
         
         
         30
            
          Contrary to the position put forward by Waterman in its written observations but as that company acknowledged at the hearing,
         no information contained in the Explanatory Notes in question permits the inference that the Commission’s notes assimilate
         a coat of paint to plastic sheeting.
         
         
         
         31
            
          Moreover, contrary to Waterman’s claim, the condition of similarity of appearance set out in the Explanatory Notes in question
         cannot be read as conveying a preference on the part of the Commission for the criterion of appearance in disregard of the
         judicial criterion referred to in paragraph 29 above. The application of that condition presupposes that the product resulting
         from the process of coating or covering is a layer ‘of plastic’.
         
         
         
         32
            
          In the light of all the foregoing, the answer to the national court must be that consideration of the question does not reveal
         any information such as to affect the validity of the Explanatory Notes in question.
         
         
         Costs
         33
            
          The costs incurred by the French Government and the Commission, which submitted observations to the Court, are not recoverable.
         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.
         
         
         On those grounds,
         
         
         
            
            THE COURT (Fourth Chamber),
         
         
          in answer to the question referred to it by the Tribunal d’instance du VIIe arrondissement de Paris by judgment of 21 August
         2003, hereby rules:
         
               Examination of the question raised does not reveal any information such as to affect the validity of subheadings 4202 12 11
                     and 4202 12 19 of the Combined Nomenclature, contained in the Commission’s communication entitled ‘Explanatory Notes to the
                     Combined Nomenclature of the European Communities’ .
                  
                  
               
            
                  Cunha Rodrigues
               
               
                  Puissochet
               
               
                  Lenaerts
               
            
                  
               
               
                  
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
                  
               
               
                  
               
               
                  
               
            
            
            
            
            
            
            
            
         
         
          Delivered in open court in Luxembourg on 8 July 2004.
         
         
         
         
                  Registrar
               
               
                  President of the Fourth Chamber
               
            
         
         
         
                  R. Grass
               
               
                  J. N. Cunha Rodrigues
               
            
      
      
          1 –
            
            Language of the case: French.