CELEX: 61999CC0119
Language: en
Date: 2001-01-18
Title: Opinion of Mr Advocate General Mischo delivered on 18 January 2001. # Hewlett Packard BV 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 - Classification of a multi-function machine combining the functions of printer, photocopier, facsimile machine and computer scanner - Principal function - Validity of Regulation (EC) No 2184/97. # Case C-119/99.

Important legal notice

|

61999C0119

Opinion of Mr Advocate General Mischo delivered on 18 January 2001.  -  Hewlett Packard BV 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 - Classification of a multi-function machine combining the functions of printer, photocopier, facsimile machine and computer scanner - Principal function - Validity of Regulation (EC) No 2184/97.  -  Case C-119/99.  

European Court reports 2001 Page I-03981

Opinion of the Advocate-General

1. The companies in the Hewlett Packard Group import into the Community a multi-function machine known as the HP Office Jet which combines the functions of a printer, photocopier, facsimile machine and scanner. Between 1995 and 1997 they obtained binding tariff information from the Italian, British and French customs authorities classifying the machines under heading 8471 92 20 (now 8471 60 40) (printers). This classification entailed the application of a customs duty of 1.5%, which was due to disappear with effect from 1 January 1998.2. In 1997 Commission Regulation (EC) No 2184/97 of 3 November 1997 concerning the classification of certain goods in the combined nomenclature was adopted, classifying a machine with the same four functions as the Hewlett Packard Group's machines under heading 8517 21 00 (facsimile machines), which had a rate of customs duty of 3.8%.3. Although the Binding Tariff Information relating to its products issued by the French customs authorities had not been amended or revoked, the Hewlett Packard Group decided to seek a fresh binding tariff information for its range of multi-function machines, in order to confirm their classification as printers.4. Having received that application, and in the light of Regulation No 2184/97, the customs authorities issued a binding tariff information on 2 April 1998 classifying the machine at issue under heading 8517 21 00 (facsimile machines).5. Hewlett Packard then lodged an appeal against this binding tariff information to the tribunal d'instance (District Court) Paris 7, (France).6. That court considered, contrary to the arguments advanced by Hewlett Packard, that Regulation No 2184/97 did cover the HP Office Jet machines, so that it was correct to classify them under heading 8517 21 00, but it was doubtful about the validity of the regulation, which led it to decide in its judgment of 30 March 1999 to refer the following question for a preliminary ruling:Under the Common Customs Tariff, facsimile machines and printers do not fall under the same tariff heading. When a single machine is designed to perform several functions, the tariff heading is determined according to the principal function.In point 3 of Regulation No 2184/97 was the Commission therefore entitled to decide that all multi-function facsimile machines essentially consisting of:- a modem- a scanner- a printing deviceand operating either in autonomous form or in conjunction with a computer, fall under tariff heading 8517 21 00 (facsimile machines), thus excluding the possibility of determining the dominant function of each machine on a case-by-case basis and laying down the principle that the printing device is of secondary importance, whatever the machine, provided that it falls within the category described?7. Before considering the reply to this question, I set out the relevant Community legislation.The Combined Nomenclature8. The Combined Nomenclature in Annex 1 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 Regulation (EEC) No 2086/97 of 4 November 1997, contains inter alia the following headings:8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included:...8471 60 - Input or output units, whether or not containing storage units in the same housing:...- - Other:8471 60 40 - - - Printers...8471 60 90 - - Otherand,8517 Electrical apparatus for line telephony or line telegraphy, including line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones:8517 21 00 Facsimile machinesRegulation No 2184/979. Article 1 of Regulation No 2184/97 provides that:The goods described in column 1 of the annexed table are now classified within the Combined Nomenclature under the appropriate CN codes indicated in column 2 of the said table.10. Point 3 of the annex to the regulation is as follows:>lt>0General rules for the interpretation of the Combined Nomenclature11. General rules 1 and 6 for the interpretation of the Combined Nomenclature provide:The titles of sections, chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the following provisions.For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and mutatis mutandis to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule the relative section and chapter notes also apply, unless the context otherwise requires.12. According to note 3 of Section XVI of the Combined Nomenclature, [u]nless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.13. From reading the order for reference, it appears that the national court has interpreted Regulation No 2184/97 as requiring classification under heading 8517 21 00 of all machines which could fall within the Description in the left hand column of the annex.14. The national court has, it appears, taken the Reason contained in the right hand column, namely that [t]he telecommunication (facsimile) function is the principal function of this item of equipment, to mean that for all multi-function machines matching the description in the left hand column the Community legislature has decided that the principal function can only be that of a facsimile machine.15. From this reading of the regulation, the national court has drawn the conclusion that it was not open to it to take the specific characteristics of the HP Office Jet into account and classify it under a different heading.16. It is the confusion of the national court, faced with an apparently absolute prohibition on conducting an assessment of the facts, which led it to doubt the validity of the regulation and to have recourse to the procedure under Article 234 EC.17. I will say at the outset that if Regulation No 2184/97 were intended to preclude the actual characteristics of any given multi-function machine from being taken into account, I could not but share the national court's confusion.18. We would have, indeed, a regulation which, while appearing to have applied note 3 of Section XVI of the Combined Nomenclature, would be claiming to establish a rule that multi-function machines combining a facsimile, a printer, a scanner and a photocopier, and fitting the description in the left hand column of the Annex, necessarily have the facsimile function as their principal function.19. I am persuaded, however, that this is not the correct reading of Regulation No 2184/97, and all the more so since the Commission, the author of it, proposes a quite different interpretation in its observations, in terms which are particularly clear and convincing.20. It should be borne in mind that a classification regulation is adopted, as the Commission points out, on the advice of the Customs Code Committee when the classification of a particular product is such as to give rise to difficulty or to be a matter for dispute.21. It is thus not an abstract classification, since the purpose is to resolve the problem to which a particular product gives rise. But, as the Commission points out, the classification regulation has general implications, in so far as it does not apply to a given undertaking or to a particular transaction, but, in general, to products which are the same as that examined by the Customs Code Committee.22. The classification regulation constitutes the application of a general rule to a particular case, and thus contains guidance on the interpretation of the rule which can be applied by the authority responsible for the classification of an identical or similar product.23. The Commission justifies this dialectical approach, which is designed to bring together both the individual case and the general rule, by reference to three arguments:- It is essential to maintain a consistent interpretation of the Combined Nomenclature, and reasoning by analogy contributes to this consistency.- It is desirable to maintain equality of treatment between undertakings, which would be lost if similar situations were not dealt with in the same way.- Finally, if reasoning by analogy did not extend to goods such as those contemplated by the Commission regulation, it would encourage undertakings to circumvent that classification by making marginal modifications to the characteristics of their products for the purpose only of escaping the consequences of an economically unfavourable classification.24. But these considerations, which are entirely legitimate, do not (as the Commission points out) imply at all that the approach adopted by a classification regulation for a particular product may unhesitatingly and automatically be adopted in the case of a similar product. On the contrary, as always, where reasoning by analogy is employed great care is called for.25. It does not therefore follow that the classification adopted in Regulation No 2184/97 is valid for every multi-function machine which has the same functions, regardless of its particular characteristics.26. It must also be noted that what appears in the right hand column of the Annex as the Reason has to be read in its context. It is provided that [c]lassification is determined by the provisions of general rules 1 and 6 for the interpretation of the Combined Nomenclature, note 3 to Section XVI and by the wording of CN codes 8517 and 8517 21 00.27. The classification under heading 8517 21 00 is thus made by applying, inter alia, note 3 of Section XVI which requires the identification of the principal function of the machine.28. There is therefore no reason to doubt the Commission's assertion, that it was because it had been established in the particular case that the facsimile was the principal function, that heading 8517 21 00 had been selected, even though it may not be clear from the regulation why the Commission reached that conclusion. In any event, the regulation does not state in any way that the fact that facsimile is one of the functions of a multi-function machine necessarily calls for the conclusion that that function is the most important and determines the classification.29. Moreover, if that were the case, the regulation would contain an internal contradiction since, while claiming to apply note 3 of Section XVI, it would deprive the examination which that rule requires of any purpose.30. Finally, it may be noted that a later regulation, Commission Regulation No 517/1999 of 9 March 1999 concerning the classification of certain goods in the Combined Nomenclature, to which both Hewlett Packard and the Commission draw attention, would confirm, were there any need, that Regulation No 2184/97 never intended to provide in every case that the facsimile function in multi-function machines combining a scanner, printer, facsimile and photocopier should be regarded as the most important one.31. Point 2 of the Annex to this regulation is as follows:>lt>132. As the Commission points out, this regulation exists alongside Regulation No 2184/97 and obviously leads to a classification different from that adopted in Regulation No 2184/97 for a multi-function machine which appears to resemble that classified in that regulation and the equipment in the HP Office Jet range because actual examination revealed that the product in question was not identical to that classified in 1997. It is a case therefore of similarity but not of identity where the similarity is not sufficient to justify classification by analogy with the earlier regulation.33. Moreover, and notwithstanding the opinion of the French government to the contrary, I do not consider that point 1 of Regulation No 517/1999 supports the view that any machine with a facsimile function should automatically be considered to have that as its principal function. In that case, there was in fact a machine capable of performing, in addition to the functions of a facsimile, scanner, printer and photocopier, the functions of line telephony and telephone answering. It would thus have been inconceivable for it to be classified under heading 8471 - Automatic data processing machines and units thereof .... This machine could only fall within heading 8517 - Electrical apparatus for line telephony or line telegraphy ....34. There is therefore no doubt that, where machines are not identical, it is the examination of the actual characteristics of each one which determines its classification, and not one of its functions which is arbitrarily accorded pre-eminence a priori.35. In the case of machines in the HP Office Jet range, the national court does not, as Hewlett Packard had suggested, ask under what heading the goods should be classified, and it does not seem appropriate that the Court should undertake that task.36. It is true that, in its submissions, Hewlett Packard draws attention to many factors which appear to it to be relevant to classification, and the French Government likewise gives a number of reasons why, even without Regulation No 2184/97, these products fall within heading 8517 21 00.37. By contrast, the Commission does not really deal with the question, contenting itself with the observation that machines in the HP Office Jet range have essential differences, which it lists very briefly, from the machine which was the subject of the classification in Regulation No 2184/97. That caution is entirely understandable, given that the order for reference alone does not provide sufficient details of the characteristics of these machines.38. It should be noted also that the uncertainty of the national court, as it appears in the order for reference, does not relate to the way in which the classification of the products in the HP Office Jet range should be undertaken; on the contrary, the national court's reasoning demonstrates that it is well aware of the procedure to be followed, but is uncertain whether it should be embarked upon in the light of Regulation No 2184/97.39. That is why I have no doubt that, once the judgment of the Court has made it clear that the obstacle which the national court believed the regulation to be does not exist, the classification of these products can proceed without great difficulty.40. It will be appropriate to determine the principal function of the machines at issue by examining carefully what they provide in terms of performance of the various functions which they can carry out, and comparing such performance with that of machines which are specifically designed for those different functions, having regard to their degree of independence from the computer to which they are designed to be connected and to the significance or otherwise of the absence of a fax card at the time of importation.41. Certain factors highlighted by Hewlett Packard, which form no part of the classification criteria in the Combined Nomenclature, should, on the other hand, be disregarded, such as the usual business of this company.42. Although it is thus not necessary to classify the machines in the HP Office Jet range, I must nonetheless suggest a reply to the question about validity posed by the national court. In view of what seems to me to be the correct interpretation of Regulation No 2184/97, the reply is self-evident. This regulation - in so far as it classifies under heading 8517 21 00 multi-function machines whose principal function is in fact the facsimile function, and was not intended to lay down that all machines combining the functions of printer, photocopier, facsimile and scanner, should in principle be classified as facsimile machines - is perfectly valid.43. Certainly, there could be some reservations about the way in which the reasons for the classification made by this regulation are expressed, since, as the order for reference illustrates, they do not entirely preclude the risk of a mistaken interpretation. It would be very much preferable if the reasons for regarding the facsimile function as pre-eminent were more explicit, which would have demonstrated that that pre-eminence had become clear following an actual examination. But the fact that the reasoning in this case is not all it might be, is not, in my opinion, sufficient to affect the validity of the regulation at issue, all the more so since, as I believe I have shown, a careful reading of the reason in the right hand column of the annex makes it clear, by the reference to note 3 of Section XVI, that the classification is the result of an actual examination.Conclusion44. In view of all the considerations discussed above, I propose that the Court should reply to the tribunal d'instance, Paris 7, that examination of the question it has referred has disclosed no ground for questioning the validity of point 3 of the annex to Commission Regulation (EC) No 2184/97 of 3 November 1997 concerning the classification of certain goods in the Combined Nomenclature.