C-14/71

JUDGMENT OF 14. 7. 1971 — CASE 14/71

5. The phrase 'kibbled millet grain' ing sizes formed by the agglutination used in Article 1 (d) of Regulation of particles of milo. This product No 19/62 and mentioned under tariff comes under the abovementioned heading ex 11.02 A III (b) in the tariff heading where some of its con­ annex to that regulation must be in­ stituent elements have been removed terpreted as including products if it still contains the essential con­ chiefly consisting in unworked frag­ stituents of milo in such proportions ments of grain, similar to those of that the quantity of those constituents kibbled milo grain which may in addi­ is not smaller than the normal values tion include numerous lumps of vary­ of the natural contents of milo.

In Case 14/71

Reference to the Court under Article 177 of the EEC Treaty by the Bundes- finanzhof, Seventh Chamber, for a preliminary ruling in the action pending before that court between

Gunther Henck, Hamburg-Altona, and

Hauptzollamt Emmerich

Issues of fact and of law

I — Summary of the facts clearance for the release to the market and procedure of two consignments of a commodity described in the customs declaration as The facts which form the basis of this 'An English product consisting in dry case may be summarized as follows: sorghum pulp, a residue of starch manu­ 1. On 4 March 1964, the Gunther facture'. In accordance with the customs Henck undertaking obtained customs declaration, the customs office classified

HENCK v HAUPTZOLLAMT EMMERICH

'Must the expression "kibbled millet of the Protocol on the grain" referred to in Article 1 (d) of Statute of the Court Regulation No 19/62 of the Council of Justice of the EEC in conjunction with the annex to that regulation (No 11.02 ex The observations submitted under A ex HI (b) of the Common Customs Article 20 of the Protocol on the Statute tariff) be interpreted as meaning that of the Court may be summarized as it covers a product which consists follows: chiefly in unworked fragments of grains which are similar to those of Admissibility kibbled sorghum ("millococo" or A — According to the Henck undertak "Miloschrot") and which in addition ing, the Bundesfinanzhof is not seeking include many lumps of varying sizes the interpretation of the expression 'kib formed by the agglutination of par bled millet grain' but rather the appli ticles of sorghum, given that in addi cation of Article 1 (d) of Regulation No tion, even where some of their con 19/62 in this case.

Treaty. required in addition to reach certain Moreover, the court making the refer maximum or minimum levels?' ence, in wording its question, failed to 2. The order for reference was received take into consideration that Regulation at the Registry of the Court of Justice No 19/62 was replaced from 1 July on 19 March 1971. 1967 by Regulation No 120/67. Since The Günther Henck undertaking ana the law applicable to the imports in the Commission of the European Com question was that in force when the munities submitted written observations goods were imported, that is in 1964,

Henck undertaking, a problem which ap­ changed their mind about the classifi­ pears insignificant but which is in fact cation of this product after the latter very important; that of an interpretation had been marketed: given by a court almost ten years after — tne Henck undertaking nad not been the dispute arose and which attributes able to protect itself against the to the applicable law a meaning which amendments made a posteriori to the the parties could not have taken into tariff classification by the German consideration when the dispute emerged. customs authorities by applying in The Henck undertaking points out in particular to the latter for a binding particular that because of the length of tariff assessment in accordance with the national proceedings and the rela­ Paragraph 23 of the German Cus­ tively short duration of Community toms Law, since such assessments rules, which are often replaced and are, according to the case-law of the amended, the German courts are no Court, of no effect in the Community longer able to follow the developments sphere; in Community legislation and case-law —in spite of tne ract that at tne time and are therefore no longer even in a when the goods were imported the position to ensure the certainty of the German customs authorities agreed law in cases to come. Having made these with the plaintiff in the main action remarks as to the meaning and signific­ in classifying the goods in question ance in this respect of the judgments of under tariff heading 23.03 and in the Court in Cases 72/69 and 74/69, spite of the fact that it could not be it deals with the problem of 'the retro­ foreseen that there would be a dispute active effect of decisions made by courts' with the customs authorities on this which, although it does not arise as often point, the plaintiff has now, after as that of the retroactive effects of the seven years, to accept a decision to law, is however not new. It puts forward be made on the classification which many arguments on this subject based was applicable at that time; both on national practice and Commun­ — for these reasons, the Henck under­ ity practice with regard to regulations taking is of the opinion that the in­ and it claims that it follows from those terpretation of Article 1 (d) of Regu­ that the retroactive effect of legal pro­ lation No 19/62 must now be sought visions represents a quite exceptional exclusively on the basis of the sources and limited phenomenon. It concludes of information and the means of in­ by recalling the need to avoid the ap­ terpretation at the disposal of the plication of the law in general and of parties and the German customs Community law in particular injuring authorities at the beginning of 1964. the legal protection of those subject to In other words, the interpretation of

the abovementioned provisions of As for the correct identification of the Community law must be sought by imported product because of its composi the Court of Justice by referring to tion and nature and as to the application the time when the product in ques thereto of criteria established by the tion was imported. Court in connexion with that heading, subject to these observations, the Henck both come solely within the jurisdiction undertaking leaves it to the Court to of the national courts. determine the admissibility of the ques tion which has been referred. The substance of the case Moreover it observes that it rollows from A — The Henck undertaking considers the grounds of the order for reference that according to both Community law that the essential subject-matter of the and national law and the 'Explanatory dispute concerns the distinction between Notes to the Brussels Nomenclature', tariff heading 11.02 and tariff heading two criteria were decisive for the defini

quently. The Court of Justice therefore these constituent elements must not has no jurisdiction in the present case to interpret it, since the power of interpre be altered in any way; tation given it by Article 177 of the — from the point of view of its structure Treaty only exists in respect of tariff the product must consist in coarse headings which come within Community irregular fragments of kibbled grain. law. No other criteria have been established a — xne Commission of tne European since the beginning of 1964 either by Communities does not raise any objec Community law or by German law tions as to the admissibility of the ques either because of commercial practices

and that Article 5 of Regulation No out that the latter heading covers resi 55/62 provides for the application of a dues analogous to those derived from levy on (c) 'cereal groats and cereal the working of cereals and is thus similar meal' and on (g) 'kibbled sorghum'. On the other hand, 'residues of starch manu to heading 23.02. Because of this re semblance, the criteria which enable the facture' within the meaning of tariff heading 23.03 were not subject to Com distinction between heading 11.02 and munity regulations at the time when heading 23.02 to be made must apply the goods in question were imported. by analogy to the products covered by since tne question which nas been re tariff heading 23.03; ferred relates to a product which is pre (a; witn regard to tne distinction be- cisely described as to its composition and tween flour' and 'bran', the ash con nature it is not at all necessary to define tent is deterrninative: the higher the the whole extent of the field of applica ash content, the lower the quality of tion of that heading in this case. the flour;

(b) with regard to the food value of the (d) It emerges from the distinction worked cereals, the starch content is between 'flour' and 'kibbled grain' determinative: but this content is re-enacted in Community law that not the only decisive criterion for the structure of the product was also the classification of a product under significant for its classification under tariff heading 11.02 or 23.02. tariff heading 11.02. In the absence

This attitude on the part of the which is based on the structure of legislature cannot be evaded by inter the product. preting the phrase 'kibbled grain' in a completely unjustified way so as to in At the end of these considerations, clude therein farinaceous residues of the Henck undertaking concludes as follows: starch manufacture. This would be open ing the door to arbitrary decisions. (a) The pnrase Kibbled miller gram The Henck undertaking summarizes its within the meaning of Article 1(d) attitude to the matter thus: of Regulation No 19/62 in conjunc tion with the annex to that same (a) According to the feedstuff industry and commercial practice the phrase regulation must be interpreted to the 'kibbled grain' has for a long time effect that from January to March 1964 it included products derived described the product derived from from the grinding of millet grains a method of grinding during which which had been coarsely kibbled and it was prohibited under paragraph 19 displayed the natural characteristics of the regulation of 21 July 1927 of those grains to which ingredients implementing the Law on Feedstuffs should not have been added or from to alter the natural state of the pro

Its tariff heading 23.02. The same ap use as a foodstuff is very limited in plies as regards products to be classi Europe; on the other hand, it is widely fied under tariff heading 23.03. There used for feedstuffs and starch manu did not exist any provision of Com facture. As in the case of maize, kibbled munity law or provisions of national grain, groats, meal, flour and flakes may law or, finally, any directives laying be obtained as primary products through down a maximum starch content for dry-milling of the sorghum.

HENCK v HAUPTZOLLAMT EMMERICH

technological nature. the presence of fragments of unworked With regard to the tarift, the Com sorghum is no bar to that classification; mission recalls that residues of starch on the other, the existence of lumps manufacture within the meaning of formed by the agglutination of particles heading 23.03 were not subject to the of sorghum does not make that same Common Customs Tariff when the classification impossible. It may occur goods in question were imported and that such a commodity no longer cor points out that, as in the case of maize, responds to the definition of 'kibbled experience shows in the case of sorghum, grain' accepted by German law on feed too, that of the various secondary pro ducts which are the result of starch stuffs; but the specific definition of kibbled grain laid down by the law of a manufacture, products which are rich in starch and have a relatively high value single Member State is not necessarily are often declared as 'residues' within the suitable for re-enactment in the sphere meaning of tariff heading 23.03 when concerning the whole of the Com they are imported. It deduces from this munity. Moreover, the agglutination of that tariff heading 11.02 applies not the natural kibbled fragments may be only to what are properly speaking explained by the action of moisture primary products which are obtained because of ineffective processing or from the dry milling of the cereals (in storage. Such agglutination may also be this case sorghum) but also to products caused by the disintegration of oil in the which are added to residues within the product which has been superficially meaning of heading 23.03 and are, as degermed and which is therefore rich in regards their value, their composition fats. It claims that in none of these cases and their use, similar to genuine products is there a process whereby residues of which are the result of sorghum starch manufacture are produced within

indicated must be considered as result of the rough grinding of the sorghum and which have the basic com "kibbled millet grain" which comes position of that product. under tariff heading 11.02 and must The Commission illustrates tne average therefore be subjected to the levy laid composition of sorghum in contrast to down in Article 5 (1) (g) of Regula other kinds of millet and maintains that tion No 55. This product is described the various starch, protein and fat con sufficiently by the information sup tents pointed out by the Bundesfinanzhof plied by the Bundesfinanzhof.

JUDGMENT OF 14. 7. 1971 — CASE 14/71

maximum or minimum content in other between the products in tariff heading constituents is not necessary in this 11.02 and residues within the meaning case for the purposes of the distinction of tariff heading 23.03.'

Grounds of judgment By order of 12 January 1971 received at the Court Registry on 19 March 1971, the Bundesfinanzhof of the Federal Republic of Germany referred under Article 177 of the Treaty establishing the EEC, a question on the interpretation of Article 1 (d) of Regulation No 19 of the Council of 4 April 1962 (OJ 1962, No 30).

The jurisdiction of the Court

Whilst requesting the Court to define the scope of Article 1 (d) of Regulation No 19/62 with regard to certain products, the Bundesfinanzhof gives details as to the composition of this product. The Gunther Henck undertaking main­ tains that because of these details, the question which has been referred does not in fact request the Court to define the meaning and the scope of the abovementioned provision but to apply that same provision to the case in question.

Although Article 177 of the Treaty does not allow the Court to give a ruling on a specific case when it is called upon to interpret Community law, the need, however, to reach a helpful interpretation of the provisions in question justifies the statement by the national court of the legal context into which the interpretation sought must be placed. The details contained in the ques­ tion which has been referred enable the category of products which may come within the provision in question to be ascertained in a general and abstract way.

7 Neither Regulation No 19/62 nor Regulation No 55/62 define 'kibbled millet grain' within the meaning of the abovementioned tariff heading ex 11.02. In the absence of provisions of Community law on the subject, the Explanatory Notes and Classification Opinions laid down by the Convention on the Nomenclature for the Classification of Goods in Customs Tariffs are authoritative as a valid means of interpreting headings in the Common Customs Tariff. It appears from those notes concerning the headings in Chapter 11 of the Tariff that fragments or floury kernels obtained by the rough grinding of milo which have the essential characteristics of the original product with regard to their composition must be considered, also taking into consideration the practice in the milling of milo and in the milo trade, as 'kibbled millet grain' within the meaning of tariff heading ex 11.02. Since any agglutination of this grain into numerous lumps of varying sizes does not involve an alteration in its natural composition, it is not the factor which determines its exclusion from the above defined category of 'kibbled grain'.

8 The national court asks whether the fact that this product has undergone starch extraction can affect its classification in the category of kibbled millet grain within the meaning of tariff heading ex 11.02.

9 The interpretation of a tariff heading must in doubtful cases take into con­ sideration both the function of the customs tariff in view of the needs of the system or organization of the markets and of its purely customs function. Although Regulation No 19/62 includes kibbled millet grain within the meaning of heading ex 11.02 in the system of the common organization of the market in cereals and made it liable to the levy system by Regulation No 55/62, this was mainly because of its structure and use and not because of the treatment which it underwent. It follows that kibbled millet grain which has undergone processing enabling certain constituents to be extracted there­ from continues to come under tariff heading ex 11.02 if it still contains the essential constituents of milo in quantities corresponding to normal variations in the natural content of those constituents in the original product.

Costs

12 The costs incurred by the Commission of the European Communities which has submitted observations to the Court are not recoverable and since these

proceedings are so far as the parties to the main action are concerned a step in the action pending before the national court, the decision on 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 oral observations of the Günther Henck undertaking and the Commission of the European Communities; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Com­ munity, especially Articles 39, 40 and 177;

HENCK v HAUPTZOLLAMT EMMERICH

Delivered in open court in Luxembourg on 14 July 1971.

R. Lecourt A. Van Houtte President Registrar

OPINION OF MR. ADVOCATE-GENERAL ROEMER

(See Case 12/71, p. 754)