C-51/70

JUDGMENT OF THE COURT 3 MARCH 19711

Alfons Lütticke GmbH

v Hauptzollamt Passau2 (Reference for a preliminary ruling by the Finanzgericht München)

'Chocolate'

Case 51/70

Summary

HAUPTZOLLAMT PASSAU,

ion the interpretation of the term 'chocolate in bulk' in Article 1 of Regula­ tion No 755/67 of the Council of the EEC of 26 October 1967 (Official Journal, 1967, No 260),

THE COURT

composed of: R. Lecourt, President, A. M. Donner and A. Trabucchi, Presidents of Chambers, R. Monaco (Rapporteur), J. Mertens de Wilmars, P. Pescatore and H. Kutscher, Judges.

1 — Language of the Case : German. 2 — CMLR.

JUDGMENT OF 3. 3. 1971 — CASE 51/70

I — Summary of the facts indent of that article and that the and procedure term "chocolates" is used in Annexes I and II to Regulation No 752/67/­ In November 1967 and in January and EEC of the Council of 24 October June 1968 Alfons Lütticke GmbH 1967, to be interpreted as including: [hereinafter referred to as Lütticke] re­ (a) only unfilled chocolate, ready for quested customs clearance at thе customs consumption, including choco­ office of Simbach-Innbrücke for three late in the form of granules or, consignments of goods coming from if this question is answered in the Austria which the company declared as negative, 'chocolate in bulk'. The customs office however took the (b) only intermediate or semi-finish­ view that the goods were not 'chocolate ed products of the chocolate in bulk'. industry? In the view of Lütticke, the description 2. If Question 1 (b) is answered in the 'chocolate in bulk' means intermediate affirmative, what minimum conditions or semi-finished products at least in so must a preparation fulfil in order to far as they possess the essential proper­ be regarded as "chocolate in bulk" ties of a chocolate preparation, without within the meaning of Article 1 of necessarily having all the properties of Regulation No 755/67/EEC of the chocolate ready for consumption. Council: The Hauptzollamt (Principal Customs Office), on the other hand, regards the (a) in respect of its composition? description 'chocolate in bulk' as apply­ (aa) Must the preparation al­ ing only to chocolate ready for con­ ready include the ingredients sumption. of the end-product, whether Faced with this problem, the Finanz­ chocolate or milk chocolate? gericht (Finance Court) München, by (bb) If the answer to Question an order dated 3 August 1970, stayed (aa) is in the affirmative, proceedings and referred two questions must certain minimum and to the Court of Justice for preliminary maximum limits be observ­ ruling pursuant to Article 177 of the EEC Treaty: ed for the proportions of cocoa, milk and sugar con­ '1. Is the term "chocolate in bulk" stituting the ingredients, ("Schokoladenmasse") in the first in­ although there are no rele­ dent of Article 1 of Regulation No vant regulations on food at 755/67/EEC of the Council of 26 Community level and al­ October 1967, especially having though the national food regard to the facts that the word law provisions diverge from "chocolate" is used in the fourth one another in this respect?

are used), the fine-reduction, intimate compound has been conching and crystallization produced either of cocoa of the mixture, right down and milk alone or of cocoa, to the moulding? milk and part of the sugar?' The order for reference was received at (bb) If the answer to Question (aa) is in the negative, does the Court Registry on 18 August 1970. Lütticke and the Commission of the the mere mixing of the in­ gredients suffice or must European Communities submitted writ­ ten observations in accordance with there be a further stage of Article 20 of the Protocol on the Statute processing? of the Court of Justice on 10 and 12 (c) with regard to the method of November 1970 respectively. manufacture? On hearing the report of the Judge- (aa) Must a specific technical pro­ Rapporteur and the views of the Ad­ cess have been used at the vocate-General, the Court decided not particular processing stage to hold any preparatory inquiry and set or stages, which the prepara­ the date for the opening of the oral tion must in any event have procedure. undergone in the processes Lütticke, represented by Mr Wendt and mentioned in Question (b), Mr Heyn, and the Commission, repre-

JUDGMENT OF 3. 3. 1971 — CASE 51/70

tion indicates generally an 'unshaped late. mass' that is a mass which has to be — Moreover from the distinction made improved and worked to become an between the expressions 'chocolate in object of a particular type and form. bulk' and 'chocolates, whether or not Descriptions containing this expres­ sion used in connexion with food­ filled' in Annexes I and II to Regula­ stuffs mean intermediate or semi- tion No 752/67/EEC (subheading 18.06-B-1) it may be deduced that finished products which already have since chocolates whether or not filled the essential qualities of the finished product. Thus the expression 'choco­ are chocolates ready for consumption, late in bulk' means an intermediate the expression 'chocolate in bulk' re­ fers to an intermediate or semi­ or semi-finished product for the pro­ duction of chocolate which already finished product, that is to say, a has the essential qualities of choco­ product which has reached a stage of late. production less advanced than that of unfilled chocolates. The fact that these — As to the commercial concept, to two descriptions are placed together which the description of goods con­ under the same subheading shows tained in a customs tariff must cor­ that the word 'chocolate' has a very respond, it must be stated that the wide meaning, including both pro­ essential nature of goods 'in bulk' is ducts ready for consumption and in­ that they are intended for further termediate or semi-finished products. processing and for the manufacture of a finished product. Thus the ex­ — As to the mention in brackets of pression 'chocolate in bulk' refers to certain products ('blocks, bars, sticks products which are the result of as etc.') relating to 'chocolate in bulk' homogeneous as possible a mixture of in Article 1 of Regulation No 755/67, the ingredients of chocolate which are it could perhaps be deduced that,

since in the chocolate industry choco In addition Regulation No 755/67 was late in bulk is formed into 'blocks' no longer in force at the time when the if it has to be stored for a long time imports in question were made. before going through the next stage Lütticke examined the second question of processing, the description 'choco with detailed analysis and decided that late in bulk' also applies to products the two questions should be answered ready for consumption. as follows: After pointing out that the rules for the interpretation of the nomenclature of the 1. The description 'chocolate in bulk' in Common Customs Tariff and in particu the first indent of Article 1 of Regu lar those contained in paragraphs 3 (a) lation No 755/67 also includes inter and (b) and 5 of the 'Explanatory Notes' mediate or semi-finished products in to this nomenclature lead to the same tended for the production of choco

national laws. are ready for consumption. There are The description 'chocolate en masse' in no minimum or maximum limits for the former French tariff is unknown in the proportion of ingredients of the customs tariffs of the other Member 'chocolate in bulk'. States. Finally the subdivisions of heading 3. For the production of 'chocolate in 18.06-B made by Regulations Nos 752/ bulk' it is enough that the ingredients 67 and 755/67 do not correspond to the of chocolate or of milk chocolate have subdivisions of this heading in the for

It is only necessary corresponded to the letter and the sense that an intimate compound of the of Regulation No 755/67, this regula ingredients for chocolate shall have tion was void and Article 16 of Regula been obtained, without their having tion No 160/66 would be applicable in had to be dissolved in the mass or this case. refined.

B — Observations submitted by the proves that this description refers Commission of the European Com solely to chocolate ready for con munities sumption, in commercial form. This The Commission first described the list also permits of the conclusion that system established by Regulation No the expression 'in bulk' does not con 160/66 and summarized the background note shapeless matter, but rather a to the development of tariff heading homogeneous product'. Chocolate 18.06 through the various regulations products in the form of granules or covering this heading and then went powder would also come within the on to make the following observations: concept of 'in bulk' and therefore within the concept of 'chocolate in — The Explanatory Notes to the Brus bulk'.

This interpretation cor 752/67 and 755/67) and 'chocolates' (in responds to the concept in the former Regulations Nos 752/67 and 735/68 French customs tariff of 'chocolate all refer, apart from certain differences en masse' and was most probably the in detail, to chocolate ready for con source of the description in question sumption. under Community law. In conclusion, it argues that the first — In addition the list of products in question should be answered to the brackets in Regulation No 755/67 (as effect that intermediate products or semi- well as in the French customs tariff) finished products for the chocolate in-

2 In the first question the Court is asked to rule whether the term 'chocolate in bulk' in Article 1 of Regulation No 755/67/EEC is to be interpreted to the effect that it only covers chocolate ready for consumption or only inter­ mediate or semi-finished products of the chocolate industry.

3 This question relates to the tariff classification of certain food preparations for the manufacture of chocolate which were imported into the Community in November 1967 and January and June 1968. It emerges from the order of the court making the reference, the customs declarations and the written observations submitted by the Commission and by the plaintiff in the main action under Article 20 (2) of the Protocol on the Statute of the Court of Justice that these are preparations containing 0 to 20 % sugar, 10 to 26 % cocoa or cocoa in bulk and 64 to 74 % milk.

4 The plaintiff in the main action claims that the regulation for which the inter­ pretation is requested was no longer in force at the time of the imports in question. However, this regulation, according to the second paragraph of Article 2 thereof, 'shall apply up to the date of the decision of the Council concerning the conclusion of the negotiations opened in accordance with Article XXVIII of the General Agreement on Tariffs and Trade'. The pre­ amble to the said regulation shows that the negotiations referred to are those in which the Commission was authorized to participate by decision of the Council of 25 July 1967. No decision within the meaning of the second para­ graph of Article 2 abovementioned was made before the adoption of Regula­ tion No 2121/68 of the Council of 20 December 1968, Article 4 of which

6 Neither from the letter nor from the context can the term 'chocolate in bulk' as used in Regulations Nos 752/67 and 755/67 be so interpreted as to extend the scope of application to intermediate or semi-finished products necessary for the manufacture of chocolate. In particular, it must be con­ cluded from Annexes I and II to Regulation No 752/67 of the Council that the Customs Tariff, which amends Regulation No 83/67 on this point, classified 'chocolate in bulk' under the same tariff heading (18.06-B-I) as 'chocolate goods' and 'sugar confectionery' which are products ready for consumption. It cannot be deduced from letter (a) of this tariff heading, which relates to products 'containing no sucrose or containing less than 5% by weight of sucrose', that Regulation No 752/67 was intended, by the use of the term 'chocolate in bulk', also to cover intermediate or semi-finished products in chocolate manufacturing. Since only finished products come under tariff heading 18.06-B-I, the designation contained under letter (a) must refer not to 'chocolate in bulk' but to 'substitutes made from sugar substitutes'.

7 In common usage the term 'in bulk' describes a product that has no particular form or which is characterized by a homogeneous mixture of its constituents. The more detailed description 'blocks, bars, sticks ...' added in brackets to the first indent of Article 1 of Regulation No 755/67 indicates the various forms in which 'chocolate in bulk' may exist. 'Chocolate in bulk' may be regarded as 'ready for consumption' if it can be marketed as chocolate; this does not necessarily preclude it from undergoing a further production or packaging stage. Thus in the present case the term 'in bulk' means a homo­ geneous mass of chocolate, regardless of the form in which it is presented.

11 The costs incurred by the Commission of the European Communities which submitted observations to the Court are not recoverable. As these proceedings are, so far as the parties to the main action are concerned, a step in the action pending before the Finanzgericht München, the decision of costs is a matter for that court.

On those grounds,

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the observations of Lütticke and the Commission of the European Communities; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Article 177; Having regard to Regulations of the Council No 160/66 of 27 October 1966, No 83/67 of 18 April 1967, No 752/67 of 24 October 1967, No 755/67 of 26 October 1967, No 735/68 of 18 June 1968, No 1114/68 of 29 July 1968, No 2121/68 of 20 December 1968 and No 1/71 of 17 December 1970;

OPINION OF MR ROEMER — CASE 51/70

Having regard to the Decisions of the Council No 68/411/EEC of 27 November 1967 and No 68/421/EEC of 20 December 1968; Having regard to the Protocol on the Statute of the Court of Justice of the EEC, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities;

THE COURT

Registrar President

OPINION OF MR ADVOCATE-GENERAL ROEMER

DELIVERED ON 3 FEBRUARY 19711

Mr President, into force on 1 April 1967, in a number Members of the Court, of other cases. It created a special levy system for imports of such products Before consideration of the reference for from third countries in view of the a preliminary ruling from the Finanz­ higher prices prevailing within the gericht München the following obser­ Community for agricultural products vations must be made. (for example for milk and sugar, which We have already encountered Regula­ are both relevant in the present case) tion No 160/66 of the Council of 27 because of the existing market organiza­ October 1966 (Official Journal No 195 tions. The levy is composed of two of 28 October 1966, p. 3361), instituting elements: an ad valorem duty for the a system of trade in respect of certain protection of the food industry in the goods resulting from the processing of Community (fixed in Annex I to Regula­ agricultural products, which entered tion No 83/67 of the Council of 18

1 — Translated from the German.