CELEX: 61980CC0205
Language: en
Date: 1981-06-04
Title: Opinion of Mr Advocate General Reischl delivered on 4 June 1981. # ELBA Elektroapparate- und Maschinenbau Walter Goettmann KG v Hauptzollamt Berlin-Packhof. # Reference for a preliminary ruling: Finanzgericht Berlin - Germany. # Common Customs Tariff: Light circles. # Case 205/80.

OPINION OF MR ADVOCATE GENERAL REISCHL
      DELIVERED ON 4 JUNE 1981 (
            1
         )
      
         Mr President,
      
      
         Members of the Court,
      
      These proceedings concern the tariff classification of goods called “flashing light circles” which, though further details can be found in the order referring the matter to the Court, are basically described as follows :
      A plastic frame about 21 cm in diameter made up of three circles, to which are attached 49 candle-shaped incandescent light bulbs about 24 mm long with plastic holders, which are connected by means of an electric cable and which flash when the electric current is switched on. In addition, the frame is decorated with silver tinsel and a coloured loop of tinfoil; it is also provided with a fitting which enables the equipment to be placed on top of a Christmas tree.
      These goods were imported from Taiwan in December 1978 and were placed, in accordance with the declaration made by the importer, under tariff heading 97.05 of the Common Customs Tariff. That heading, under which duty is payable at the rate of 10 %, reads as follows:
      “Carnival articles, entertainment articles (for example, conjuring tricks and novelty jokes); Christmas-tree decorations and similar articles for Christmas festivities (for example, artificial Christmas trees, Christmas stockings, imitation yule logs, Nativity scenes and figures therefor).”
      The importer objected to this assessment and requested that the goods should be classified under tariff heading 85.20:
      “Electric filament lamps and electric discharge lamps (including infra-red and ultra-violet lamps); arc lamps:
      
               A.
            
            
               Filament lamps for lighting
               ...
            
         
               B.
            
            
               Other lamps
            
         
               C.
            
            
               Parts.”
            
         The competent Hauptzollamt [Principal Customs Office] did not, however, agree to this request and in its decision on the objection classified the goods instead under tariff subheading 39.07 E IV, according to which duty is payable at a rate of 17.6 %, and which reads as follows :
      “Articles of materials of the kinds described in headings 39.01 to 39.06:
      ...
      
               E.
            
            
               Of other materials.
               ...
               
                        IV.
                     
                     
                        Other.”
                     
                  
         This classification was based on the ground that, by virtue of their presentation and purpose,, these were not Christmas-tree decorations but were appliances generally used as lighting for parties and for bars in private houses. As these were goods made up in sets, they were to be classified in accordance with Rule 3 (b) of the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff, that is to say, as if they consisted of the material or component which gave them their essential character. This meant that, because the goods consisted mainly of plastic, the above-mentioned classification was the proper one, in that the goods were “other articles made of plastic — electric indoor lights”.
      The importer appealed against this decision to the Finanzgericht [Finance Court] Berlin. It argued that the imported equipment constituted Christmas-tree decorations within the meaning of tariff heading 97.05 and pointed out that the goods were manufactured for the American market, where they were in fact used as Christmas-tree decorations. Furthermore, it was in any event the electric light bulbs which were to be regarded as the component which gave the goods their essential character, as the plastic components of the equipment fulfilled only subsidiary functions.
      The defendant Hauptzollamt conceded in the course of the proceedings that it was possible to use the equipment for Christmas-tree decorations. At the same time, however, it emphasized that in the Federal Republic of Germany this equipment was used mainly as decorative lighting and for other purposes. The Hauptzollamt further admitted that the principal use of the article within the whole Community might possibly be different.
      In view of this dispute concerning the interpretation of the Common Customs Tariff, the Finanzgericht Berlin stayed the proceedings by order of 29 September 1980 and submitted to the Court the following question for a preliminary ruling under Article 177 of the EEC Treaty:
      “Are so-called ‘flashing light circles’ (diameter roughly 21 cm) consisting of a circular plastic frame, to which are attached candle-shaped incandescent light bulbs, about 24 mm long, of various colours, which flash when switched on and which may be placed on the top of a Christmas tree, to be classified as Christmas-tree decorations under tariff heading 97.05 of the Common Customs Tariff (rate of duty 10 %) or, because plastic materials are among their constituents, under tariff subheading 39.07 EIV of the Common Customs Tariff (rate of duty 17.6 %)?”
      Only the Commission of the European Communities has submitted written observations and oral argument on this question.
      In relation to tariff heading 97.05, which may be considered first in view of Additional Note 1 (q) to Chapter 39 (“This Chapter does not cover... (q) Articles falling within Chapter 97 (for example, toys, games and sports requisites)”), the Commission has stated that it may well be accepted that the goods in question were designed by the manufacturer to be used as Christmas-tree decorations. It has also conceded that the goods may occasionally be used as such in Europe. However, neither factor, according to the Commission, is sufficient. What is more important is to discover how the goods are used as a general rule in the common market. It may not, however, be assumed that they are used mainly as Christmas-tree decorations. This is also confirmed by the opinions of the Zentralverband der Elektrotechnischen Industrie e.V. [National Federation for the Electronic Industry] and the Vereinigung Bayerischer Spielwaren- und Christbaumschmuckhersteller e.V. [Association of Bavarian Manufacturers of Toys and Christmas-Tree Decorations] which were submitted in the course of the main proceedings.
      In reply to a question put by the Court, the Commission supplemented its observations on the above-mentioned tariff heading by stating that the goods could not be classified under the first part of this heading which covers “Carnival articles; entertainment articles (for example, conjuring tricks and novelty jokes)”. According to the Explanatory Notes to the Customs Co-operation Council Nomenclature, this tariff heading covers only articles which, in view of their ephemeral use, are generally of simple and flimsy construction and are not to be confused with the articles in everyday use of which they are an imitation. (
            2
         ) The flashing light circles, on the other hand, are lighting equipment which may be used as decoration for a party or for a bar in a private house or for shop windows and exhibition halls. This shows that they are not designed for ephemeral use.
      If, therefore, the goods are not to be classified under tariff heading 97.05, the fact that these are goods put up in sets within the meaning of Rule 2 (b) of the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff becomes of importance. In the opinion of the Commission, goods must be classified on the basis of Rule 3 (b) of the above-mentioned General Rules, as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable. Probably only the plastic lighting equipment can be considered as such material, and therefore it seems that the goods should indeed be classified under tariff heading 39.07, which was the view of the Hauptzollamt.
      This does not, however, seem to me to be convincing. In my opinion, there are two obvious objections to this line of argument.
      In relation to the part of tariff heading 97.05 concerning “Christmas-tree decorations and similar articles for Christmas festivities”, it must indeed be admitted that the decisive factor is the principal actual use in the Community, and not the purpose intended by the manufacturer. This view is supported by the Explanatory Notes to the Customs Cooperation Council Nomenclature, which, in Note C 2 on tariff heading 97.05, refer to articles traditionally used at Christmas festivities. In this regard, however, the opinions of the two associations which are mentioned in the Commission's written observations may scarcely be considered as adequate proof. They can provide evidence only of German consumer habits, quite apart from the fact that there might be some doubt as to the objectivity of these opinions, because the manufacturers belonging to the associations might favour a particular classification of the goods at issue here for the protection of their own interests. Therefore, if only the above-mentioned part of tariff heading 97.05, covering Christmas-tree decorations and similar articles for Christmas festivities, were to be considered, then, so far as the principal use of the imported goods in the whole of the Community is concerned, further research would certainly be required before the conclusion could be justified that such use could not be for Christmas-tree decorations.
      The other point concerns the application of Rule 3 (b) of the General Rules, which is clearly only relevant if a classification under tariff heading 97.05 is ruled out. As to this, I should merely like to suggest that from the description of the goods and their external appearance as we know it, it may properly be doubted whether the plastic frame is in fact the component which gives them their essential character. In view of the obvious function of the goods, to produce illumination and a decorative effect by means of light-play, it is in fact far more appropriate to give prominence to the lighting components for the purposes of classification. There is, however, no need to settle this point, in view of the following considerations.
      As has already been emphasized repeatedly in the judgments of the Court, in the interpretation of the Common Customs Tariff, the wording of the tariff heading is primarily authoritative. Rule A 1 of the General Rules also indicates that this is so. In addition, the Explanatory Notes to the Customs Co-operation Council Nomenclature are a useful means of information, as has also been pointed out in the judgments of the Court (see, for example, the judgment in Case 54/79 Firma Hako-Schuh Dietrich Bahner v Hauptzollamt Frankfurt am Main [1980] ECR 311).
      With regard to tariff heading 97.05, it is clear from a first reading that this is a heading which covers various goods and has very flexible limits. This is shown by the use on two occasions of the word “ähnlich” (“similar”) (
            3
         ) (“ähnliche Waren zur Unterhaltung” [“entertainment articles”]; “ähnliche Weihnachtsartikel” [“similar articles for Christmas festivities”]). Leaving aside for a moment Christmas-tree decorations and similar articles for Christmas festivities, because from the proceedings up to now there can be no clear conclusion as to the principal use of the goods in question in the Community, there nevertheless remains, for the purposes of this case, the first part of the tariff heading, which is drafted in very broad terms: “Carnival articles; entertainment articles (for example, conjuring tricks and novelty jokes)”. Assuming that the goods at issue are, as the Commission believes, used in Europe mainly as lighting for parties and similar purposes, the most appropriate solution is to classify them, in accordance with the wording of the tariff heading, under the expression “entertainment articles”.
      Furthermore such classification does not, in my opinion, conflict with the Explanatory Notes to the Customs Cooperation Council Nomenclature which refer under Note A to “Carnival and entertainment articles, which in view of their ephemeral use are in general flimsy and or simple construction”. (
            4
         ) Although it must not be overlooked that this passage speaks of a simple and flimsy construction and that it is indicated that such articles “are usually made of paper, paperboard, cotton-wool or other nondurable material”, it should be none the less borne in mind that this description is clearly qualified by the use of the words “in general” and “usually”. Furthermore the examples given do not wholly correspond to the criteria laid down, as is shown, for example, by the mention of hats, clothing, sunshades and so on.
      I should therefore take the view that the classification of the goods at issue under tariff heading 97.05 is totally justified and that in any event, in view of the idea contained in Rule 3 (a) of the General Rules — that precedence be given to the heading which provides the most specific description — this seems much more tenable than the application of the very general criteria contained in tariff subheading 39.07 E IV.
      I therefore propose that the question submitted by the Finanzgericht Berlin should be answered as follows :
      “So-called ‘flashing light circles’ consisting of a circular plastic frame of about 21 cm in diameter, to which are attached candle-shaped incandescent light bulbs, about 24 mm long, of various colours which flash when switched on are to be classified under tariff heading 97.05 of the Common Customs Tariff”
      (
            1
         )	Translated from the German.
      (
            2
         )	Translator's note: this comment does not appear in the authentic English text of the Explanatory Notes.
      (
            3
         )	Translator's note:The word “similar” is in fact used only once in the English version of tariff heading 97.05.
      (
            4
         )	TransUtor's note: This passage does not in fact appear in the authentic English text.