1 This request for a preliminary ruling concerns the interpretation of subheadings 2401 10 35 and 2403 10 90 of the Combined Nomenclature (‘CN’) 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 (EU) No 861/2010 of 5 October 2010 (OJ 2010 L 284, p. 1) (‘Regulation No 2658/87’), and Article 2(b), Article 4(6) and (8) and Article 38 of Council Directive 2008/118/EC of 16 December 2008 concerning the general arrangements for excise duty and repealing Directive 92/12/EEC (OJ 2009 L 9, p. 12).
2 The request has been made in proceedings between Schenker Nemzetközi Szállítmányozási és Logisztikai Kft. (‘Schenker’) and the Nemzeti Adó-és Vámhivatal Észak-alföldi Regionális Vám- és Pénzügyőri Főigazgatósága (Regional Customs and Tax Directorate of Észak-Alföld, forming part of the National Treasury and Customs Authority, Hungary) (the ‘Customs Directorate’) concerning the tariff classification of light air cured tobacco in the CN and whether it is subject to excise duty.
3 The Customs Cooperation Council, now the World Customs Organisation (WCO), was established by the convention establishing that body, concluded in Brussels on 15 December 1950. The Harmonised Commodity Description and Coding System (‘the HS’) was drawn up by the WCO and established by the International Convention on the Harmonised Commodity Description and Coding System (‘the HS Convention’) concluded in Brussels on 14 June 1983 and approved, with its amending protocol of 24 June 1986, on behalf of the European Economic Community by Council Decision 87/369/EEC of 7 April 1987 (OJ 1987 L 198, p. 1).
4 Under Article 3(1) of the HS Convention, each Contracting Party undertakes to ensure that its customs tariff and statistical nomenclatures are in conformity with the HS, to use all the headings and subheadings of the HS without addition or modification together with their related codes, and to follow the numerical sequence of that system. Each Contracting Party also undertakes to apply the General Rules for the interpretation of the HS and all the section, chapter and subheading notes of the HS, and not to modify their scope.
5 The WCO is to approve, under the conditions laid down in Article 8 of the HS Convention, the Explanatory Notes and Classification Opinions adopted by the HS Committee.
6 The Explanatory Notes concerning heading 2401 of the CN state as follows: ‘2401 - Unmanufactured tobacco; Tobacco refuse. 2401.10 - Tobacco, not stemmed/stripped 2401.20 - Tobacco, partly or wholly stemmed/stripped 2401.30 - Tobacco refuse This heading covers: (1) Unmanufactured tobacco in the form of whole plants or leaves in the natural state or as cured or fermented leaves, whole or stemmed/stripped, trimmed or untrimmed, broken or cut (including pieces cut to shape, but not tobacco ready for smoking). Tobacco leaves, blended, stemmed/stripped and “cased” (“sauced” or “liquored”) with a liquid of appropriate composition mainly in order to prevent mould and drying and also to preserve the flavour are also covered in this heading. (2) Tobacco refuse, e.g., waste resulting from the manipulation of tobacco leaves, or from the manufacture of tobacco products (stalks, stems, midribs, trimmings, dust, etc. …’
7 The HS Explanatory Notes on heading 2403 of the CN state: ‘2403 - Other manufactured tobacco and manufactured tobacco substitutes; “Homogenised” or “reconstituted” tobacco extracts and essences: 24.03.10 - Smoking tobacco, whether or not containing tobacco substitutes in any proportion - Other: 2403.91 - - “Homogenised” or “reconstituted” tobacco 2403.99 - - Other This function includes: (1) Smoking tobacco, whether or not containing tobacco substitutes in any proportion, for example, manufactured tobacco for use in pipes or for making cigarettes. …’
8 The customs classification of goods imported into the European Union is governed by the CN.
9 By virtue of Article 12(1) of Regulation No 2658/87, the European Commission is to adopt each year a regulation reproducing the complete version of the CN, together with the rates of duty, as resulting from measures adopted by the Council or the Commission. They shall apply from 1 January of the following calendar year.
10 The version of the CN applicable to the facts at issue in the main proceedings, which occurred in 2011, is that resulting from Regulation No 861/2010.
11 The general rules for the interpretation of the CN, which are set out in Part One, Section I, A, provide: ‘Classification of goods in the [CN] shall be governed by the following principles. 1. 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. … 2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled. (b) Any reference in a heading to a material or substance shall be taken to include a reference to mixtures or combinations of that material or substance with other materials or substances. Any reference to goods of a given material or substance shall be taken to include a reference to goods consisting wholly or partly of such material or substance. The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3. 3. When, by application of rule 2(b) or for any other reason, goods are prima facie classifiable under two or more headings, classification shall be effected as follows: (a) the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods; (b) mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable; (c) when goods cannot be classified by reference to 3(a) or (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. 4. Goods which cannot be classified in accordance with the above rules shall be classified under the heading appropriate to the goods to which they are most akin. … 6. 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 requires otherwise.’
12 The second part of the CN includes Section IV, concerning ‘prepared foodstuffs; beverages, spirits and vinegar; tobacco and manufactured tobacco substitutes’. That section includes, inter alia, Chapter 24, entitled ‘Tobacco and manufactured tobacco substitutes’. That chapter contains the following tariff headings: ‘1. This chapter does not cover medicinal cigarettes (Chapter 30). CN code Description of goods Conventional rate of duty (%) Supplementary unit 1 2 3 4 2401 Unmanufactured tobacco; Tobacco refuse : 2401 10 - Tobacco, not stemmed/stripped: 2401 10 35 - - Light air-cured tobacco 11.2 MIN [EUR] 22 MAX 56 [EUR]/100 kg/net 2401 10 60 - - Sun-cured Oriental type tobacco 11.2 MIN [EUR] 22 MAX [EUR] 56/100 kg/net -- 2401 10 70 - - Dark air-cured tobacco 11.2 MIN [EUR] 22 MAX [EUR] 56/100 kg/net -- 2401 10 85 - - Flue-cured tobacco 11.2 MIN [EUR] 22 MAX [EUR] 56/100 kg/net -- 2401 10 95 - - Other 10 MIN [EUR] 22 MAX [EUR] 56/100 kg/net -- 2401 20 Tobacco, partly or wholly stemmed/stripped 2401 20 35 - - Light air-cured tobacco 11.2 MIN [EUR] 22 MAX [EUR] 56/100 kg/net -- 2401 20 60 - - Sun-cured Oriental type tobacco 11.2 MIN [EUR] 22 MAX [EUR] 56/100 kg/net -- 2401 20 70 - - Dark air-cured tobacco 11.2 MIN [EUR] 22 MAX [EUR] 56/100 kg/net -- 2401 10 85 - - Flue-cured tobacco 11.2 MIN [EUR] 22 MAX [EUR] 56/100 kg/net -- 2401 10 95 - - Other 11.2 MIN [EUR] 22 MAX [EUR] 56/100 kg/net -- 2401 30 00 - Tobacco refuse 11.2 MIN [EUR] 22 MAX [EUR] 56/100 kg/net -- 2402 Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes; 2402 10 00 Cigars, cheroots and cigarillos, containing tobacco 26 1 000 p/st 2402 20 Cigarettes containing tobacco 2402 20 10 - - Containing cloves 10 1 000 p/st 2402 20 90 - - Other 57.6 1 000 p/st 2402 90 00 Other 57.6 -- 2403 Other manufactured tobacco and manufactured tobacco substitutes; “Homogenised” or “reconstituted” tobacco tobacco extracts and essences: 2403 10 - Smoking tobacco, whether or not containing tobacco substitutes in any proportion 2403 10 10 - - In immediate packings of a net content not exceeding 500 g 74.9 -- 2403 10 90 - - Other 74.9 -- - Other 2403 91 00 - - “Homogenised” or “reconstituted” tobacco 16.6 -- 2403 99 - - Other 2403 99 10 - - - Chewing tobacco and snuff 41.6 -- 2403 99 90 - - - Other 16.6 --’
13 The Explanatory Notes to the Combined Nomenclature drawn up by the European Commission (OJ 2008 C 133, p. 1), in their version applicable at the material time in the main proceedings, are worded as follows as regards heading 2401 of the CN: ‘2401 Unmanufactured tobacco; tobacco refuse As regards tobacco in the natural or unmanufactured state, see the HS Explanatory Notes to heading 2401, paragraph 1. It is to be noted that: … (b) “light air-cured” Burley type tobacco (including Burley hybrids) means tobacco which has been cured under natural atmospheric conditions and does not carry the odour of smoke or fumes if supplemental heat or air circulation has been applied; the leaves normally range from light tan to reddish colour. Other colours and combinations of colours frequently result from variations in maturity or cultural and curing techniques; (c) “light air-cured” Maryland type tobacco means tobacco which has been cured under natural atmospheric conditions and does not carry the odour of smoke or fumes if supplemental heat or air circulation has been applied; the leaves normally range from a light-yellow to deep cherry red colour. Other colours and combinations of colours frequently result from variations in maturity or cultural and curing techniques; …’
14 According to the explanatory notes of the CN concerning subheading 24 03 10 90 of the CN: ‘Smoking tobacco, whether or not containing tobacco substitutes in any proportion Smoking tobacco is tobacco which has been cut or otherwise split, twisted or pressed into blocks which can be smoked without further industrial processing. Tobacco refuse which is capable of being smoked and which is put up for retail sale is smoking tobacco if it does not meet the description of cigars, cigarillos or cigarettes (see the Explanatory Notes to subheadings 2402 10 00, 2402 20 10 and 2402 20 90 [of the CN]). Products consisting in whole or in part of substances other than tobacco are also classified in these subheadings provided that they correspond to the definition given above, the exception being products consisting wholly of substances other than tobacco and intended for medicinal use (Chapter 30). These subheadings include cut cigarette rag which is the finished mixture of tobacco for the manufacture of cigarettes.’
15 Article 4(19) of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (OJ 1992 L 302, p. 1), as amended by Regulation (EC) No 955/1999 of the European Parliament and of the Council of 13 April 1999 amending Council Regulation (EEC) No 2913/92 with regard to the external transit procedure and Regulation (EC) No 648/2005 of the European Parliament and of the Council of 13 April 2005 (OJ 2005 L 117, p. 13), (‘the Customs Code’) provides: ‘For the purposes of this Code, the following definitions shall apply: … (19) “Presentation of goods to customs” means the notification to the customs authorities, in the manner laid down, of the arrival of goods at the customs office or at any other place designated or approved by the customs authorities.’
16 Article 37 of the Customs Code provides: ‘1. Goods brought into the customs territory of the Community shall, from the time of their entry, be subject to customs supervision. They may be subject to customs controls in accordance with the provisions in force. 2. They shall remain under such supervision for as long as necessary to determine their customs status, if appropriate, and in the case of non-Community goods and without prejudice to Article 82(1), until their customs status is changed, they enter a free zone or free warehouse or they are re-exported or destroyed in accordance with Article 182.’
17 Article 38(1) of the Customs Code provides: ‘Goods brought into the customs territory of the Community shall be conveyed by the person bringing them into the Community without delay, by the route specified by the customs authorities and in accordance with their instructions, if any: (a) to the customs office designated by the customs authorities or to any other place designated or approved by those authorities; or, (b) to a free zone, if the goods are to be brought into that free zone direct: - by sea or air, or - by land without passing through another part of the customs territory of the Community, where the free zone adjoins the land frontier between a Member State and a third country.’
18 Article 40 of the Customs Code provides: ‘Goods entering the customs territory of the Community shall be presented to customs by the person who brings them into that territory or, if appropriate, by the person who assumes responsibility for carriage of the goods following such entry, with the exception of goods carried on means of transport only passing through the territorial waters or the airspace of the customs territory of the Community without a stop within this territory. The person presenting the goods shall make a reference to the summary declaration or customs declaration previously lodged in respect of the goods.’
19 In accordance with Article 79 of the Customs Code: ‘Release for free circulation shall confer on non-Community goods the customs status of Community goods. It shall entail application of commercial policy measures, completion of the other formalities laid down in respect of the importation of goods and the charging of any duties legally due.’
20 Article 84(1) of the Customs Code provides: ‘In Articles 85 to 90: (a) where the term “procedure” is used, it is understood as applying, in the case of non-Community goods, to the following arrangements: - external transit; - customs warehousing; - inward processing in the form of a system of suspension - processing under customs control; and - temporary importation; …’
21 Article 91 of the Customs Code provides: ‘1. The external transit procedure shall allow the movement from one point to another within the customs territory of the Community of: (a) non-Community goods, without such goods being subject to import duties and other charges or to commercial policy measures; (b) Community goods, in cases and on conditions determined in accordance with the committee procedure, in order to prevent products covered by or benefiting from export measures from either evading or benefiting unjustifiably from such measures. …’
22 Article 202 of the Customs Code provides: ‘1. A customs debt on importation shall be incurred through: (a) the unlawful introduction into the customs territory of the Community of goods liable to import duties, or (b) the unlawful introduction into another part of that territory of such goods located in a free zone or free warehouse. For the purpose of this Article, unlawful introduction means any introduction in violation of the provisions of Articles 38 to 41 and the second indent of Article 177. 2. The customs debt shall be incurred at the moment when the goods are unlawfully introduced. …’
23 Under Article 204(1) of the Customs Code: ‘A customs debt on importation shall be incurred through: (a) non-fulfilment of one of the obligations arising, in respect of goods liable to import duties, from their temporary storage or from the use of the customs procedure under which they are placed, or (b) non-compliance with a condition governing the placing of the goods under that procedure or the granting of a reduced or zero rate of import duty by virtue of the end-use of the goods, in cases other than those referred to in Article 203 unless it is established that those failures have no significant effect on the correct operation of the temporary storage or customs procedure in question.’
24 [As rectified by order of 6 October 2016] Article 186(1), first paragraph, of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Regulation No 2913/92 establishing the Community Customs Code (OJ 1993 L 253, p. 1), as amended by Commission Regulation (EC) No 312/2009 of 16 April 2009 (OJ 2009 L 98, p.3) states: ‘Non-Community goods presented to customs shall be covered by a summary declaration for temporary storage as specified by the customs authorities.’
25 [As rectified by order of 6 October 2016] Article 859 of Regulation No 2454/93, as amended by Commission Regulation (EC) No 444/2002 of 11 March 2002 (OJ 2002 L 212, p. 18), states: ‘The following failures shall be considered to have no significant effect on the correct operation of the temporary storage or customs procedure in question within the meaning of Article 204(1) of the [Customs] Code, provided: - they do not constitute an attempt to remove the goods unlawfully from customs supervision, - they do not imply obvious negligence on the part of the person concerned, and - all the formalities necessary to regularise the situation of the goods are subsequently carried out: … (2) in the case of goods placed under a transit procedure, failure to fulfil one of the obligations entailed by the use of that procedure, where the following conditions are fulfilled: (a) the goods entered for the procedure were actually presented intact at the office of destination; (b) the office of destination has been able to ensure that the goods were assigned a customs-approved treatment or use or were placed in temporary storage at the end of the transit operation; and (c) where the time limit set under Article 356 has not been complied with and paragraph 3 of that Article does not apply, the goods have nevertheless been presented at the office of destination within a reasonable time; …’
26 According to recital 7 of Directive 2008/118: ‘Since suspensive procedures under … the … Customs Code provide for adequate monitoring whilst excise goods are subject to the provisions of that Regulation, there is no need for the separate application of an excise monitoring system for the time that the excise goods are subject to a Community customs suspensive procedure or arrangement.’
27 Article 1(1)(c) of that directive provides: ‘This Directive lays down general arrangements in relation to excise duty which is levied directly or indirectly on the consumption of the following goods (hereinafter “excise goods”): … (c) manufactured tobacco covered by Directives 95/59/EC, 92/79/EEC and 92/80/EEC.’
28 Article 2 of Directive 2008/118 provides: ‘Excise goods shall be subject to excise duty at the time of: (a) their production, including, where applicable, their extraction, within the territory of the Community; (b) their importation into the territory of the Community.’
29 Article 3(4) of that directive provides: ‘Chapters III and IV shall not apply to excise goods covered by a customs suspensive procedure or arrangement.’
30 Article 4(6) and (8) of the directive provides: ‘For the purpose of this Directive as well as its implementing provisions, the following definitions shall apply: … (6) “customs suspensive procedure or arrangement” means any one of the special procedures as provided for under Regulation (EEC) No 2913/92 relating to the customs supervision to which non-Community goods are subjected upon their entry into the Community customs territory, temporary storage, free zones or free warehouses, as well as any of the arrangements referred to in Article 84(1)(a) of that Regulation; … (8) ‘importation of excise goods’ means the entry into the territory of the Community of excise goods unless the goods upon their entry into the Community are placed under a customs suspensive procedure or arrangement, as well as their release from a customs suspensive procedure or arrangement.’
31 Under Article 7(2) of the same directive: ‘For the purposes of this Directive, “release for consumption” shall mean any of the following: (a) the departure of excise goods, including irregular departure, from a duty suspension arrangement; … (d) the importation of excise goods, including irregular importation, unless the excise goods are placed, immediately upon importation, under a duty suspension arrangement.’
32 According to Article 33(1) of Directive 2008/118: ‘Without prejudice to Article 36(1), where excise goods which have already been released for consumption in one Member State are held for commercial purposes in another Member State in order to be delivered or used there, they shall be subject to excise duty and excise duty shall become chargeable in that other Member State. …’
33 Article 38 of Directive 2008/118 provides: ‘1. Where an irregularity has occurred during a movement of excise goods under Article 33(1) or Article 36(1), in a Member State other than the Member State in which they were released for consumption, they shall be subject to excise duty and excise duty shall be chargeable in the Member State where the irregularity occurred. 2. Where an irregularity has been detected during a movement of excise goods under Article 33(1) or Article 36(1), in a Member State other than the Member State in which they were released for consumption, and it is not possible to determine where the irregularity occurred, the irregularity shall be deemed to have occurred and the excise duty shall be chargeable in the Member State where the irregularity was detected. However, if, before the expiry of a period of three years from the date on which the excise goods were acquired, it is ascertained in which Member State the irregularity actually occurred, the provisions of paragraph 1 shall apply. … 4. For the purposes of this Article, “irregularity” shall mean a situation occurring during a movement of excise goods under Article 33(1) or Article 36(1), not covered by Article 37 due to which a movement, or a part of a movement, of excise goods has not duly ended.’
34 The a jövedéki adóról és a jövedéki termékek forgalmazásának különös szabályairól szóló 2003. évi CXXVII. törvény (Law CXXVII of 2003 on Excise Duties and Special Regulations on the Distribution of Excise Goods) (‘Law on excise duties’), provides in Paragraph 1(1) and (2). ‘1. All excise goods manufactured within the country and all excise goods imported shall be subject to excise duties. 2. In the interest of compliance and control of tax liability, the following requirements shall be enforced: (a) excise goods shall only be produced in tax warehouses, except if produced under customs supervision; (b) excise goods imported without payment of the excise duty not including excise goods under customs supervision or imported on behalf of registered traders, shall be deposited in a tax warehouse or the plant or warehouse of an exempt user; and (c) excise goods on which no taxes have been paid - with the exception of those under customs supervision - may only be deposited and stored in a tax warehouse or the plant or warehouse of an exempt user.’
35 Paragraph 3(1) of the Law on excise duties, states: ‘The provisions of this Law shall apply to taxes charged on excise goods, the value added tax on tobacco products, the production and distribution of excise goods and to excise-related matters.’
36 Pursuant to Paragraph 3(2)(g) of the Law on excise duties, tobacco products are subject to excise duty.
37 Paragraph 7 of that law lays down the following definitions: ‘(2) “importation of excise goods” shall mean the entry of those goods into the domestic territory directly from a third country or through the territory of other Member States; if the excise goods are admitted to the domestic territory under customs formalities, importation shall be effected on completion of the customs procedure for release of the excise goods for free circulation; (7/I) “irregular departure from a tax suspension arrangement” shall mean an act or a circumstance which does not give rise to the exemption for excise goods transported under Community suspension arrangements from tax assessment obligation and tax liability under Paragraph 21(1) or Paragraph 26/B(3); (22) “release for free circulation” shall mean dispatch of excise goods from a tax warehouse, a Community tax warehouse or from the warehouse of an exempt user - not including when such goods are sent to a tax warehouse, Community tax warehouse, to a registered trader established in another Member State, to a third country or on behalf of an exempt user; receipt of excise goods by a registered trader; dispatch of grape wine from a tax warehouse for the purpose of sale in measured quantities; and clearance through customs and release for free circulation or admission under some official action by the customs authority of excise goods imported from a third country, as a result of which excise goods are treated as released for free circulation, if the excise goods are not deposited into a tax warehouse or with an exempt user following the said customs formalities or official actions, or if they are not dispatched by a registered consignor to a place of destination specified in Paragraph 18(1) as referred to in Paragraph 18(2).’
38 Paragraph 8(1) of that law states: ‘Unless otherwise prescribed in this Law, tax liability commences upon: (a) production of excise goods in the domestic territory; (b) importation of excise goods.’
39 Paragraph 15(2) of the Law on excise duties provides: ‘Tax liability shall commence: (a) on unlawful production of excise goods in a place other than a tax warehouse; (b) where excise goods unlawfully produced in a place other than a tax warehouse or unlawfully imported or obtained from a third country or any Member State are received, held, transported, used or marketed, save where it is proven by a natural person who is not engaged in business activities involving excise goods that the given circumstances led him to presume the legitimacy of receiving such excise goods.’
40 Under Paragraph 48(1) of that law: ‘The provisions of customs regulations shall be applied, in conjunction with the applicable provisions contained in this Law, to excise goods imported from third countries, or from the territories mentioned in Paragraph 7(3)(a)(ab) in respect of carrying out the formalities prescribed by customs regulations, and untaxed excise goods exported from the domestic territory to third countries, until their non-Community status as excise goods is established.’
41 Pursuant to Paragraph 114(1) of the Law on excise duties, natural persons, other than private entrepreneurs conducting business activities with excise goods, are to be liable to pay an excise penalty according to the quantity of excise goods, if ‘holding, transporting, selling or using excise goods that were not produced in a tax warehouse or, in respect of imported excise goods, that did not clear customs’.
42 Paragraph 114(2) of the Law on excise duties provides that the following also fall within the scope of subparagraph 1: ‘excise goods whose owner, supplier, seller or user is unable to present an invoice, simplified invoice, accompanying document, wine accompanying document, simplified accompanying document or customs document, or cannot in any other credible manner prove whether or not the tax has been paid for the product, or that it is transported under tax suspension arrangements.’
43 Paragraph 114(4) of the Law on excise duties provides that economic operators, other than private entrepreneurs who do not carry out an economic activity involving excise goods, if involved in the activities described in subparagraph (1)(a) and (b) or in connection with commercial quantities, are to be liable to pay double or five times the penalty base described in subparagraph (3), respectively, as an excise penalty.
44 Schenker is a commercial company established in Hungary which is engaged in the supply of customs and logistical services. On 21 January 2011 it was tasked by the Nyíregyháza Logisztik Centrum Kft., a commercial company registered in Hungary, to place two consignments of tobacco in ‘temporary storage’ because of lack of space. Subsequently, it also put two other consignments of tobacco in ‘temporary storage’.
45 The consignments of tobacco entered the territory of the European Union in Slovenia and their destination was Ukraine. According to the accompanying documents, the four consignments arrived in Hungary under the ‘T1’ external transit procedure laid down by the Customs Code.
46 The ‘T1’ documents indicated heading CN 2401 10 35 (Tobacco not stemmed/stripped - Light air-cured tobacco) which are not excise goods).
47 After the goods concerned were unloaded, Schenker stored the consignments of tobacco under the ‘temporary storage’ arrangements.
48 On 1 February 2011, one of the containers was forwarded to Nyíregyháza Logisztik Centrum and, on 8 March 2011, the applicant placed the remaining three containers in storage in a public customs warehouse which it ran in Debrecen (Hungary) with ‘type A’ authorisation.
49 On 20 April 2011 the Nemzeti Adó- és Vámhivatal Hajdú-Bihar Megyei Vám- és Pénzügyőri Igazgatósága (Regional Customs and Tax Directorate of Hajdú-Bihar, forming part of the National Treasury and Customs Authority, ‘the first instance tax authority’) carried out an on-the-spot inspection of the three containers.
50 The inspectors of the first instance tax authority selected three boxes sealed with rigid tape and adhesive tape at random from among the non-Community goods subject to a physical inspection in the customs warehouse and, after opening them, found that the boxes contained not the ‘tobacco not stemmed/stripped’ indicated by their documentation, that is customs goods under heading CN 2401 10 35, but cut tobacco.
51 Subsequently every one of the 1260 boxes contained in the consignment was examined and, as a result, the first instance tax authority found that every one of them contained cut tobacco of a total weight, according to the documentation, of 37800 kg.
52 On 22 April 2011, the 37800 kg of cut tobacco was therefore presented to the customs administration.
53 On 5 May 2011, samples were taken of the cut tobacco in accordance with the rules on sampling.
54 Following external sensory tests, the Nemzeti Adó és Vámhivatal Szakértői Intézete (the Committee of Experts of the Regional Customs and Tax Directorate, ‘the Committee of Experts’) found as follows: ‘The sample contains light and dark brown cut tobacco of differing dimensions, in small granules with the characteristic smell of tobacco. The sample mainly contains fine, but long strands. In addition, it also contains a large quantity of wider/larger granules, amongst which the remains of stalks are also to be found. Tobacco powder is also to be found at the bottom of the bag containing the sample.’
55 The record of the sampling contains the following information: ‘The presentation and form of the sample: - “contained in plastic-lined bags, in bulk, compacted”; - net weight of a box 30 kg.’
56 The Committee of Experts also analysed the width of the cut tobacco and found: ‘in the examined sample more than 25% by weight of the tobacco particles are less than 1 mm’.
57 After testing the examined sample, the Committee of Experts concluded that the sample concerned was ‘smoking tobacco’.
58 Following the opinion of the Committee of Experts, the first instance tax authority found that there was fine cut consumer tobacco in the container, which thus constituted excise goods.
59 In addition, the first instance tax authority found that, because a different CN heading appeared in the documents accompanying the excise goods from that corresponding to the classification of the product in the CN, those accompanying documents were not suitable for proving the origin of the goods as excise goods.
60 Consequently, by its Decision No 5214-9/2011 of 21 June 2011, the first instance administrative authority ordered Schenker to pay a penalty by way of excise duty of Hungarian florints (HUF) 1 485 540 000 (approximately EUR 4732052.83). According to the legal grounds of the decision, the applicant had committed an infringement of the Law on excise duties by possessing, storing and warehousing excise goods without having verified their origin and provenance and without having paid the relevant duty.
61 The Customs Directorate-General hearing Schenker’s appeal upheld the decision of the first instance tax authority by Decision No 2177-18/2012 of 28 March 2012.
62 Schenker sought judicial review of that decision before the Debreceni Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court, Debrecen, Hungary) submitting that the decision was unlawful for a number of reasons.
63 First of all, it submitted that the Customs Directorate-General had incorrectly classified the contested goods under subheading 2403 10 90 of Chapter 24 of the CN.
64 Next, Schenker denied that the goods at issue fell within the Law on excise duties because, in its view, the goods had not been released for consumption.
65 Finally, Schenker maintained that the goods at issue should be considered to be under a customs suspensive arrangement, regardless of whether or not the CN heading given in the accompanying documentation was the correct CN classification.
66 According to the expert opinion submitted by Schenker, tariff heading CN 2401 not only includes tobacco not stemmed/stripped, but also broken and cut tobacco, if it is subject to further processing. According to that opinion, the application of tariff heading CN 2401 is not unlawful, despite the fact that all the goods were cut, since they required further processing and, as tobacco requiring further processing, they could be classified under CN heading 2401 30 00.
67 The Customs Directorate-General sought the dismissal of the application based on its merits. It argues that it could not be considered that the product had been presented to customs, given that the transit documents for the goods indicated ‘tobacco, not stemmed/stripped’ under tariff heading CN 2401 10 3510, whereas the goods should have been classified as ‘smoking tobacco in immediate packings of a net content not exceeding 500 g’ under heading CN 2403 10 9000, that is to say, that the information in the accompanying documents for the goods at issue was incorrect.
68 According to the Customs Directorate-General, those accompanying documents were not suitable for certifying credibly the origin of the customs goods in Schenker’s possession.
69 In those circumstances, the Debreceni Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court, Debrecen) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling: ‘(1) Must the description of goods as “light air-cured tobacco” in accordance with heading CN 2401 10 35 of Chapter 24 (“Tobacco and manufactured tobacco substitutes”) in Regulation (EU) No 861/2010 be interpreted as meaning that it includes only air cured tobacco, not stemmed/stripped - which contains the whole leaves of the tobacco plant, - which is not cut, pressed or compacted, - which is not permitted, as light air cured tobacco not stemmed/stripped under heading CN 2401 10 35, to undergo any other form of processing (for example, removal of stems, cutting or compacting of leaves) apart from processing consisting in air curing, - which is not for smoking? (2) Must the concept of “customs suspensive procedure or arrangement” in Article 4(6) of Directive 2008/118 be interpreted as meaning that it also covers the case of customs goods (excise goods) in external transit, in temporary storage or in customs storage under accompanying documents in which the tariff heading is incorrectly stated (CN 2401 10 35 instead of CN 2403 10 9000), but the relevant chapter of the CN (Chapter 24 - Tobacco) and all the other data in those documents (container number, quantity, net weight) are correct and the seals are not broken? (In other words, it must be determined whether particular products can be under a customs suspensive procedure when the Chapter of the Common Customs Code is indicated correctly in its accompanying documents but the specific tariff heading is incorrect?) (3) Must the concept of “importation” in Article 2(b) of Directive 2008/118 and the concept of “importation of excise goods” in Article 4(8) of that directive be interpreted as meaning that they also cover the case where the tariff heading of the actual goods in external transit and the tariff heading stated in the accompanying documents is different, while, apart from that disparity, both the indication of the Chapter (in the present case, Chapter 24 - Tobacco) and the quantity and net weight of the actual goods correspond to the data given in the accompanying documents? (4) Do the irregularities referred to in Article 38 of Directive 2008/118 include a situation where goods are under a customs suspensive arrangement and there is an incorrect CN code under Annex I to Regulation No 2658/87 in the accompanying documents?’
70 As a preliminary point, it should be recalled, first of all, that, when the Court is requested to give a preliminary ruling on a matter of classification for customs purposes, its task is to provide the national court with guidance on the criteria which will enable the latter to classify the products at issue correctly in the CN, rather than to effect that classification itself, a fortiori since the Court does not necessarily have available to it all the information which is essential in that regard. In any event, the national court is in a better position to do so (judgments of 7 November 2002, Lohmann and Medi Bayreuth, C‑260/00 to C‑263/00, EU:C:2002:637, paragraph 26, and of 16 February 2006, Proxxon, C‑500/04, EU:C:2006:111, paragraph 23).
71 Therefore, it is for the national court to classify the goods at issue in the main proceedings in the light of the answers given by the Court to the questions referred to it.
72 Second, it must be stated that, according to settled case-law, in the procedure laid down by Article 267 TFEU, providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the referring court with an answer which will be of use to it and enable it to determine the case before it. In that light, the Court may have to reformulate the questions referred to it (judgments of 17 July 1997, Krüger, C‑334/95, EU:C:1997:378, paragraphs 22 and 23, and of 4 October 2012, Byankov, C‑249/11, EU:C:2012:608 paragraph 57).
73 In the present case, it is clear from the order for reference that, by its first question, the referring court in fact inquires about the interpretation of headings 2401 and 2403 of the CN for the classification for customs purposes of goods with properties such as those of the goods at issue in the main proceedings.
74 Thus, it must be held that by that question the referring court asks essentially whether Regulation No 2658/87 must be interpreted as meaning that goods, such as those at issue in the main proceedings, are classified under heading 2401 of the CN, and more specifically subheadings 2401 10 35 or 2401 30 00 thereof, or heading 2403 of the CN and, in the present case, subheading 2403 10 90 thereof.
75 In order to answer that question it must be stated, first, that the general rules for the interpretation of the CN provide that the classification of goods is to be determined according to the terms of the headings and any section or chapter notes, the titles of sections, chapters and sub-chapters being provided for ease of reference only (judgment of 11 June 2015, Baby Dan, C‑272/14, EU:C:2015:388, paragraph 25).
76 Second, it must be recalled that, in the interests of legal certainty and ease of verification, the decisive criterion for the classification of goods for customs purposes is in general to be sought in their objective characteristics and properties as defined in the wording of the relevant heading of the CN and in the section or chapter notes (see, inter alia, judgments of 16 September 2004, DFDS, C‑396/02, EU:C:2004:536, paragraph 27; of 15 September 2005, Intermodal Transports, C‑495/03, EU:C:2005:552, paragraph 47, and of 15 February 2007, RUMA, C‑183/06, EU:C:2007:110, paragraph 27).
77 As regards the Explanatory Notes to the HS, it must be added that, in spite of the fact that they lack binding force, they are an important means of ensuring the uniform application of the Common Customs Tariff and, as such, may be regarded as useful aids to its interpretation (judgments of 18 June 2009, Kloosterboer Services, C‑173/08 EU:C:2009:382, paragraph 25, and of 20 June 2013, Agroferm, C‑568/11, EU:C:2013:407, paragraph 28). The same applies to the Explanatory Notes to the CN (see judgments of 16 June 1994, Develop Dr. Eisbein, C‑35/93, EU:C:1994:252, paragraph 21, and of 14 April 2011, British Sky Broadcasting Group and Pace, C‑288/09 and C‑289/09, EU:C:2011:248, paragraph 92).
78 Finally, for the purposes of classification under the appropriate heading, it should be recalled that the intended use of a product may constitute an objective criterion for classification if it is inherent to the product, and that inherent character must be capable of being assessed on the basis of the product’s objective characteristics and properties (see judgment of 4 March 2004, Krings, C‑130/02, EU:C:2004:122, paragraph 18).
79 It is clear from the order for reference that the contested goods consist of cut tobacco of various sizes, mainly composed of long thin strands and that they contain a rather large amount of granules with a relatively large and wide diameter, in which stem refuse was also present, and also tobacco in powder form. The order for reference also indicates that those goods are ‘smoking tobacco’.
80 As Schenker argues that the goods fall within heading 2401 of the CN, it is appropriate to set out the characteristics goods must satisfy to fall within that heading.
81 In that connection, according to its wording, heading 2401 of the CN includes ‘unmanufactured tobacco; tobacco refuse’.
82 As far as concerns ‘unmanufactured tobacco’, the Explanatory Notes to the CN relating to heading 2401 of the CN refer to point 1 of the Explanatory Notes to the HS on that heading which states that that heading includes tobacco in the form of whole plants or leaves in the natural state or as cured or fermented leaves, whole or stemmed/stripped, trimmed or untrimmed, broken or cut (including pieces cut to shape, but not tobacco ready for smoking.
83 As regards ‘tobacco refuse’, point 2 of the Explanatory Notes to the HS relating to heading 2401 of the CN states that that definition includes waste resulting from the manipulation of tobacco leaves, or from the manufacture of tobacco products.
84 Since it is apparent from the order for reference that the goods at issue in the main proceedings consist of components which may be classified as ‘tobacco waste’, but, at the same time, the product also constitutes ‘smoking tobacco’, it is necessary to identify, under the rule stated in point 3(b), from among the materials of which they are composed, the one which gives them their essential character. This may be done by determining whether the goods would retain their characteristic properties if one or other of their constituents were removed from them (judgment of 18 June 2009, Kloosterboer Services, C‑173/08, EU:C:2009:382, paragraph 31).
85 Similarly, as indicated by paragraph VIII of the Explanatory Note to the HS concerning point 3(b) of the general rules for interpreting the CN, the factor which determines the essential character of the goods may, depending on the type of goods, be determined for example by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.
86 In the present case, the order for reference states that the goods at issue do not consist of dried tobacco leaves in the natural state, but, taken as a whole, are tobacco ready for smoking. Therefore, if the referring court considers that the presence of tobacco waste does not prevent the product as a whole from constituting smoking tobacco, that product cannot be classified under heading 2401 of the CN.
87 In that connection, pursuant to the Explanatory Notes to the HS concerning heading 2403 of the CN, that heading includes smoking tobacco.
88 More specifically, the Explanatory Notes to the CN state, as far as concerns subheading 2403 10 90 of the CN, that smoking tobacco is cut tobacco which can be smoked without further industrial processing.
89 Thus, as the Advocate General observed, in point 60 of his Opinion, the dividing line between manufactured and unmanufactured tobacco depends on whether it is in a state in which it may be treated as ‘ready for smoking’.
90 Accordingly, as the Hungarian Government rightly observed, the decisive criterion for classifying goods under heading 2403 of the CN rather than heading 2401 thereof depends on whether the leaves have been subject to processing to such an extent that they constitute manufactured tobacco ready to be smoked without further industrial processing.
91 In those circumstances, as is clear from paragraph 78 of the present judgment, since the referring court indicated that the goods at issue in the main proceedings consist of tobacco ready for smoking, packed in bulk, compacted in plastic-lined bags having a net weight 30 kg per box, they are to be classified under subheading 2403 10 90 of the CN.
92 Subheading 2403 10 10 of the CN concerns goods contained ‘in immediate packings of a net content not exceeding 500 g’.
93 Therefore, the answer to the first question referred is that Regulation No 2658/87 must be interpreted as meaning that goods such as those at issue in the main proceedings, consisting in smoking tobacco, irrespective of the presence of tobacco waste, since the latter does not prevent the intended use of the product concerned, are not to be included under heading 2401 of the CN. However, such goods may be classified under heading 2403 of the CN, in particular subheading 2403 10 90 thereof, if they are packed in bulk and compacted in plastic-lined bags having a net weight 30 kg per box.
94 By its second and third questions, which it is appropriate to answer together, the referring court asks essentially whether the concept of ‘customs suspensive procedure or arrangement’, laid down in Article 4(6) of Directive 2008/118, must be interpreted as meaning that the submission of specific goods to the customs suspensive procedure or arrangement may be challenged if the chapter of the Common Customs Tariff under which the goods are classified is correctly mentioned in their accompanying documents, but the specific subheading is incorrectly indicated, and whether Article 2(b) and Article 4(8) of Directive 2008/118 must be interpreted as meaning that, in such a case, there has been an importation of those goods.
95 As a preliminary point, it must be recalled that, by virtue of Article 2(b) of Directive 2008/118, excise goods are to be subject to excise duty at the time of their importation into the territory of the European Union.
96 It must be determined, first, whether goods such as those at issue in the main proceedings were the subject of an ‘importation’ within the meaning of Article 2(b) of Directive 2008/118.
97 Under Article 4(8) of Directive 2008/118 ‘importation of excise goods’ means the entry into the territory of the Union of excise goods unless the goods upon their entry into the Union are placed under a customs suspensive procedure or arrangement, as well as their release from a customs suspensive procedure or arrangement.
98 Furthermore, under Article 4(6) of Directive 2008/118, ‘customs suspensive procedure or arrangement’ means any one of the special procedures as provided for under the Customs Code relating to the customs supervision to which non-Community goods are subjected upon their entry into the Union customs territory, temporary storage, free zones or free warehouses, as well as any of the arrangements referred to in Article 84(1)(a) of that code.
99 It is apparent from the order for reference that the goods at issue in the main proceedings were presented to the customs in Slovenia when they were introduced into the customs territory of the European Union and that they arrived in Hungary under the external transit procedure where they were placed under the ‘temporary storage’ arrangement and then in a customs warehouse.
100 Consequently, from their entry into the customs territory of the European Union, those goods were placed under a ‘customs suspensive procedure or arrangement’ within the meaning of Article 4(6) of Directive 2008/118, which refers to Article 84(1)(a) of the Customs Code.
101 In the present case, it must be examined whether the indication of an incorrect tariff heading in a summary declaration for temporary storage leads to the release of those goods from the customs suspensive procedure or arrangement concerned, giving rise, where appropriate, to customs debts under Articles 202 and 204 of the Customs Code and the chargeability of excise duty.
102 As far as concerns Article 202 of the Customs Code, it defines ‘unlawful introduction’ as any introduction, in violation of the provisions of Articles 38 to 41 and the second indent of the first paragraph of Article 177 of that code, of goods liable to import duties, either into the customs territory of the European Union, or into another part of that territory, if they are located in a free zone or free warehouse (judgment of 3 March 2005, Papsimedov and Others, C‑195/03, EU:C:2005:131, paragraph 25).
103 Thus, an importation of goods constitutes an unlawful introduction if it does not comply with the following stages laid down by the Customs Code. First, under Article 38(1) of that code, goods brought into the customs territory of the European Union must be conveyed without delay to the designated customs office or to a free zone. Secondly, under Article 40, when the goods arrive at the customs office they must be presented to customs. Presentation of goods to customs is defined in Article 4(19) of that code as the notification to the customs authorities, in the manner laid down, of the arrival of goods at that customs office or at any other place designated or approved (judgment of 3 March 2005, Papsimedov and Others, C‑195/03, EU:C:2005:131, paragraph 26).
104 Interpreting Articles 40 and 43 to 45 of the Customs Code, the Court held that the presentation of goods to customs comprised, in effect, a collateral obligation to lodge without delay a summary declaration or to comply without delay with the formalities to assign the goods concerned a customs destination, that is to say, if it was requested that they be placed under a customs regime, to complete a customs declaration. In particular, it was clear from the wording of the second paragraph of Article 43 of that code that both operations were carried out, as a general rule, simultaneously, because the period which the customs authorities could allow for that lodgement was not to extend beyond the first working day following the day on which the goods were presented to customs. In addition, under Article 44(1) of that code, the summary declaration had to contain the particulars necessary for identification of the goods (see, to that effect, judgment of 3 March 2005, Papsimedov and Others, C‑195/03, EU:C:2005:131, paragraph 30).
105 [As rectified by order of 6 October 2016] It is true that Articles 43 to 45 of the Customs Code have been removed by Regulation No 648/2005. However, as the Advocate General noted in paragraph 122 of her Opinion, the relationship between the presentation to customs under Article 40 of the Customs Code and the summary declaration is henceforth expressly provided for in Article 186(1), first paragraph, of Regulation No 2454/93, as amended by Regulation No 312/2009.
106 [As rectified by order of 6 October 2016] In those circumstances, it must be held that, when the presentation of goods to customs required by Article 40 of the Customs Code is accompanied by the lodging of a summary declaration of temporary storage under Article 186 of Regulation No 2454/93, as amended by Regulation No 312/2009, which gives a description of the type of goods which bears no relation to reality, the notification to the customs authorities of the arrival of the goods, within the meaning of Article 4(19) of that code, is lacking. Where those statements make no mention of the presence of a significant part of the goods presented to customs, those goods must be regarded as having been introduced unlawfully (see, by analogy, judgment of 3 March 2005, Papsimedov and Others, C‑195/03, EU:C:2005:131, paragraph 31).
107 In that connection, it follows from the order for reference that, in the case in the main proceedings, unlike the facts examined in the judgment of 3 March 2005, Papsimedov and Others (C‑195/03, EU:C:2005:131), the summary declaration contained the information necessary for the identification of the goods. According to the referring court, the goods were correctly designated, only the tariff subheading being incorrect, and the goods were correctly identified as to their type, quantity and its packing.
108 In those circumstances, the goods at issue in the main proceedings cannot be regarded as having entered the customs territory of the European Union unlawfully within the meaning of Article 202 of the Customs Code. Therefore, when they entered into Slovenia, they could validly be placed under a ‘customs suspensive procedure or arrangement’ within the meaning of Article 4(6) of Directive 2008/118, since there was no importation within the meaning of Article 2(b) of that directive, and no excise became chargeable.
109 As far as concerns Article 204 of the Customs Code, it must be determined whether the goods at issue in the main proceedings were subsequently correctly placed under the external transit procedure and, in Hungary, under the customs warehousing arrangement in order to determine whether or not excise became chargeable in accordance with Article 4(8) of Directive 2008/118.
110 Under Article 59(1) of the Customs Code, ‘all goods intended to be placed under a customs procedure shall be covered by a declaration for that customs procedure’.
111 In that connection, the Court, in the course of its examination of the nature and scope of the customs declaration, held, in paragraph 40 of the judgment of 15 September 2011, DP grup (C‑138/10, EU:C:2011:587), that the obligation on the declarant to provide accurate information also extends to the determination of the correct subheading at the time of the tariff classification of the goods, the declarant being able, if there is any doubt, to request in advance from the customs authorities a binding tariff information, pursuant to Article 12 of the Customs Code.
112 Thus, it is conceivable that a customs debt may arise on the basis of Article 204 of the Customs Code.
113 Under Article 204(1)(a) of the Customs Code, a customs debt on importation arises through the non-fulfilment of one of the obligations arising from the use of the customs procedure under which the goods liable to import duties have been placed, unless it is established that those failures have no significant effect on the correct operation of the customs procedure in question.
114 In the situation at issue in the main proceedings, the goods were classified under the correct chapter of the CN, but under an incorrect subheading thereof.
115 [As rectified by order of 6 October 2016] In that respect, it should be pointed out that Article 859 of Regulation No 2454/93, as amended by Regulation No 444/2002, contains a validly constituted and exhaustive set of rules on failures, within the meaning of Article 204 of the Customs Code, which ‘have no significant effect on the correct operation of the temporary storage or customs procedure in question’ (judgment of 6 September 2012, Eurogate Distribution, C‑28/11, EU:C:2012:533, paragraph 34).
116 [As rectified by order of 6 October 2016] In that connection, it must be stated that Article 859 of Regulation No 2454/93, as amended by Regulation No 444/2002, supports the finding that the failure to perform one of the obligations contingent on the use of the transit procedure has no significant effect on the correct operation of that procedure if the three conditions listed in point 2 of Article 859 are fulfilled and provided that the three conditions set out in the first indent of Article 859 are satisfied.
117 It is for the referring court to ascertain whether all of those conditions are satisfied with respect to the dispute in the main proceedings.
118 If the answer is affirmative, the error in classifying the goods may therefore be regarded as having no significant effect on the correct operation of the consecutive customs procedures.
119 It is only after the checks referred to in paragraph 114 have been made that it is possible for the referring court to establish whether the goods at issue in the main proceedings have been placed under a ‘customs suspensive procedure or arrangement’ within the meaning of Article 4(6) of Directive 2008/118 since their entry into the territory of the European Union.
120 Having regard to all of the foregoing considerations, the answer to the second and third questions is that the concept of ‘customs suspensive procedure or arrangement’, laid down in Article 4(6) of Directive 2008/118, must be interpreted as meaning that the placement of specific goods under a customs suspensive procedure or arrangement cannot be challenged if the chapter of the Common Customs Tariff which covers those goods is correctly mentioned in their accompanying documents, but the specific subheading is incorrectly indicated. In such a case, Article 2(b) and Article 4(8) of Directive 2008/118 must be interpreted as meaning that there has been no importation of those goods, and that they are not excise goods.
121 By its fourth question, the referring court asks essentially whether, in a situation such as that at issue in the main proceedings, the concept of ‘irregularity’ within the meaning of Article 38 of Directive 2008/118 must be interpreted as meaning that it covers goods placed under a ‘customs suspensive procedure or arrangement’, within the meaning of Article 4(6) thereof, which are accompanied by a document mentioning an incorrect tariff heading.
122 Article 38(1) of Directive 2008/118 states that where an irregularity has occurred during a movement of excise goods in a Member State other than the Member State in which they were released for consumption, they are to be subject to excise duty and excise duty is chargeable in the Member State where the irregularity occurred.
123 According to Article 38(2) of that directive, where an irregularity has been detected during the movement of excise goods and it is not possible to determine the place where that irregularity occurred, the irregularity is deemed to have occurred and the excise duty is chargeable in the Member State where it was detected.
124 Article 38(1) of Directive 2008/118 refers to ‘irregularities’ which are defined in Article 38(4). Article 38(4) provides that ‘irregularity’ means a situation occurring during a movement of excise goods under, in particular, Article 33(1) due to which a movement, or a part of a movement, of excise goods has not duly ended.
125 Thus, there is a movement of excise goods within the meaning of Article 33(1) of that directive where the excise goods have already been released for consumption in a Member State and are held for commercial purposes in another Member State in order to be delivered or used there.
126 In a situation such as that giving rise to the dispute in the main proceedings, it must be held that the conditions of Article 38(4) of Directive 2008/118, read together with Article 33(1) thereof, have not been met.
127 First, the goods at issue in the main proceedings were not released for consumption in Slovenia, as they were placed under a ‘customs suspensive procedure or arrangement’ within the meaning of Article 4(6) of Directive 2008/118 and, second, they were not held for commercial purposes in Hungary in order to be delivered or used there, but were intended to be re-exported to Ukraine.
128 Having regard to the foregoing, the answer to the fourth question is that, in a situation such as that at issue in the main proceedings, the concept of ‘irregularity’ within the meaning of Article 38 of Directive 2008/118 must be interpreted as meaning that it does not cover goods placed under a customs suspensive procedure or arrangement which are accompanied by a document mentioning an incorrect tariff classification.
129 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. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.