C-36/71

2. Common Customs Tariff — Description of goods — Classification of a product under tariff headings 11.01 and 11.02 — Criteria

3. Common Customs Tariff — Description of goods — Classification of a product under tariff heading 23.07 — Criteria

1. In the interest of legal certainty and of proportions approximating to those of administration the characteristics and the product in its natural state. objective properties of products gen­ erally supply the decisive criterion for 3. Heading 23.07 refers to products which their classification in the Common have been finally processed or are the Customs Tariff. result of a mixture of different sub­ stances and which are only suitable for feeding animals and not to agglomer­ 2. Products processed from maize and ated products the basic materials or sorghum may be classified under tariff materials of which come, as such, under headings 11.01 and 11.02 if after a specific heading, even if they contain processing they still contain the essen­ a binder not generally exceeding 3 % by tial constituents of the basic product in weight.

In Case 36/71

Reference to the Court under Article 177 of the EEC Treaty by the Finanzgericht Hamburg (Fifth Chamber) for a preliminary ruling in the action pending before that court between

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

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

Advocate-General: K. Roemer

Registrar : A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

— 11.02 'Cereal groats, cereal meal ; ratory were based on samples which had worked cereal grains, pearled, crushed, been tampered with; furthermore, the flattened (including flakes) except reports on the composition of the goods husked, glazed, polished or broken rice; which were drawn up by the producer germ of cereals, including flours undertaking confirm the accuracy of the thereof, tariff classification in dispute which also corresponds to the analysis data supplied — 23.07 'Animal food preparations in by a customer of the plaintiff with regard cluding sweetened forage; other pre

It is impossible to during the period when the imports were resolve the question on the sole basis of effected. The criteria to be borne in mind the figures resulting from the analyses. for the calculation of the levy had been The Explanatory Notes to the Brussels laid down by Regulation No 141/64/EEC Nomenclature are of no assistance since (OJ No 169 of 27.10.1964, p. 2666) with they do not specify the dividing line be regard to products which come under tween headings 23.03 and 23.04 which are headings 11.01 and 11.02 and by Regula exempt from the levy and the headings tion No 166/64/EEC (OJ No 173 of adopted by the defendant.

(EEC) No 823/68 of the Council of 28 ment; this was dismissed by the defendant June 1968 (OJ, English Special Edition, in the main action by a decision of 24 1968 (1), p. 199) and Regulation (EEC) November 1967 on the ground that in No 1216/68 of the Commission of 9 August Belgium the products in question had been 1968 (OJ, English Special Edition, 1968 declared as mixed forage (tariff heading (II), p. 421) which may be relevant with 23.07) or as maize groats (tariff heading regard to the interpretation of tariff 11.02). heading 23.07. In its application to the Finanzgericht On the basis of those considerations the Hamburg the plaintiff maintained that Finanzgericht Hamburg, by an order of the figures resulting from the analyses 3 June 1971, which was received in the carried out by the laboratory of the Court Registry on 30 June 1971, requested Ministry for Economic Affairs and Energy the Court of Justice to give a preliminary in Brussels did not relate to the imports at ruling on the following questions: issue in the case and that the figures which should be accepted were rather those which '1. May a product be classified under resulted from the certificates furnished by heading 23.07 of the Common Customs the Oleotest Laboratory, Antwerp.

JUDGMENT OF 23.3.1972 — CASE 36/71

April 1962 (OJ No 30, p. 933) (see General, the Court decided to open the Article 1 of Regulation No 19/62 in oral procedure without a preparatory conjunction with the annex to that inquiry. regulation) on the sole basis of objec­ The parties in the main action and the tive characteristics, that is, without Commission presented oral argument at regard to the manner in which it is the hearing on 23 November 1971. produced or obtained and in particular The Henck undertaking was represented by irrespective of whether or not it is an Mr Modest and Mr Roll of the Hamburg intentional mixture? Bar, the Government of the Federal Republic of Germany by Mr R. Morawitz, 2. To what factual criteria must the com­ Mr H. Lauberau and Mr H. Karbe, position of the product conform and in Advisers at the Federal Ministry for particular what must be its content in Economic Affairs and Finance and the constituents such as, for example, Commission of the European Communities starch, proteins, fats, etc. (see was presented by its Legal Adviser, P. schedules annexed) in order that it may Kalbe. The Advocate-General delivered be classified : his opinion at the hearing of 8 March 1972. (a) under heading 11.01 of the Com­ mon Customs Tariff, II — Observations submitted pur­ (b) under heading 11.02 of the Com­ suant to Article 20 of the mon Customs Tariff, Protocol on the Statute of the Court of Justice (c) under heading 23.07 of the Com­ mon Customs Tariff? The observations submitted pursuant to 3. Does a mixture, intentionally produced, Article 20 of the Protocol on the Statute come under heading 23.07 of the Com­ on the Court of Justice may be sum­ mon Customs Tariff if it is composed: marized as follows :

tions of the agricultural markets by ten mixtures the production of which neces years and that it is applied by many other sitates manufacturing techniques or which States in addition to the countries of the are composed of products coming under Community and states that the tendency the same tariff heading do not constitute appearing in the said judgments of the intentional mixtures in the sense of heading Court may well destroy the consistent 23.07. principles based on practice which have Bearing in mind the meaning currently become established with regard to the placed upon forage 'preparations' in the essential aspects of the interpretation and relevant circles in the countries of the application of the descriptions of goods Community, the Henck undertaking con appearing in the tariff headings. This siders that heading 23.07 refers to feed method of interpretation upsets the rela stuffs made up for animals, prepared from tionship between the customs tariff and products appearing under various tariff the organization of the market and is headings by a process specifically designed incompatible with the principle of legal to achieve a certain nutritional result certainty, in particular since it retro through the various constituents of which actively affects a legal position acquired they are made up and which, owing to by a citizen who considered in good faith their individual effectiveness as feedstuff's, that a description of goods in the Com represent a new product distinct from their mon Customs Tariff would only be inter constituents. To this definition there must preted in accordance with the Brussels be added the information which emerges Convention on the Nomenclature for the from Article 1(d) of Regulation No 19/62 Classification of Goods in the Customs and which, in conjunction with the annex

final product. For the purpose of deciding tions concerning heading 23.02. The Henck what must be considered as 'essential' undertaking sets out those considerations constituents of a specific product and as and draws the conclusion therefrom that a normal fluctuation in its natural content

in those constituents, the sole factors sequently suggests that the answer to which may be taken into account are the question 1 should be as follows: Common Customs Tariff and the concepts generally accepted in connexion with the 'Tariff heading 23.07 encompasses animal latter. In those circumstances the ruling food preparations which contain products of the Court that the classification of a subject to a common organization of the product under a certain tariff heading is market and manufactured from products 'principally' on the basis of the structure coming under different tariff headings and use of that product cannot preclude through an operation intended to obtain a the method of manufacture from likewise specific nutritional result on the basis of being of a varying degree of importance in their various constituents, and which con

Furthermore, whilst it is true that the removal of a very small part of certain The Government of the Federal Republic of constituents from a product is incapable of Germany observes that the animal or altering in any way its classification under vegetable substances used as animal feed a specific heading, it follows that the stuffs come under a large number of reverse is also true; consequently, prepared headings of the Common Customs Tariff, animal fodder may not be classified under such as, for example, headings 11.05, heading 23.07 if the quantities of an 12.09, 12.10, 23.02, 23.03 and 23.04 with

In that case they constitute its structure and method of use, it is 'animal food preparations' within the necessary to modify the principle provi meaning of heading 23.07. This generally sionally put forward above to the effect applies when a mixture is made from that heading 23.07 also encompasses forage substances which, individually con mixtures fortuitously obtained where their sidered, come under different headings of composition is similar to that ascribed by the Common Customs Tariff. On the

HENCK ν HAUPTZOLLAMT EMDEN

stuff. As a matter of principle the method of The second question obtaining the mixture is not essential because the Common Customs Tariff The plaintiff in the main action considers relates to the product in its form at the that the second question is certainly time of importation into the new economic admissible as regards paragraph (c) there territory. It must be possible to make an of ; on the other hand, paragraphs (a) and assessment of this product from the point (b) are only admissible to the extent to of view of the duty to be levied in the form which the reply to be given to them relates in which it presents itself as competing to the maize and sorghum products with comparable domestic products. For referred to in headings 11.01 and 11.02: this reason the essential factors are the in fact this reply is only decisive for the objective characteristics when the goods outcome of the dispute to the extent to are classified for tariff purposes and not which it refers to those products. the method of production. It is unim With regard to question 2(b) the Henck portant whether the mixture was obtained undertaking maintains that in connexion intentionally or by chance. Within the with the structure of the products coming framework of the market in cereals and under tariff heading 11.02, both the word in order to protect the Community proces ing of that heading and the Explanatory sing industry, Regulation No 19/62 de Notes to the Brussels Nomenclature show liberately adopted as the sole criterion for that it includes maize groats and meal and the imposition of the levy the objective hulled, pearled, kibbled or rolled maize characteristics of the product and not the and sorghum (including flakes) and germ of method of production or of obtaining the cereals, whole, rolled, flaked or ground. processed products. This criterion is also With regard to the content of such pro in accordance with the opinion of the ducts in constituents such as starch, Customs Cooperation Council, Brussels. proteins, fats, crude fibres, and ash, tariff In conclusion, the German Government heading 11.02 did not expressly prescribe considers that the reply to the first question any restriction in that respect at the date should be that only the objective charac relevant to the present case.

JUDGMENT OF 23.3.1972 — CASE 36/71

tariff. According to the findings of scientific the latter had a starch content exceeding studies on the subject not only the starch 50% and an ash content not exceeding content but the ash content, that is to 2%'. say, the content in mineral substances, assumes decisive importance in determining As to question 2(a) the plaintiff in the the nature and use of a cereal product. main action observes that goods which Consequently, according to the Henck come under tariff headings 11.02 and 11.01 undertaking, the starch and the ash con only differ in their structure; otherwise, the tents constitute the sufficient requirement definitions set out above are applicable to for the correct appraisal of the degree of them. Although at the relevant time Com the processing and, consequently, of the munity law did not provide any express nature and use of cereal products. As definition of the concept of flour, it must Regulation No 5/63 of the Council of be recalled that the Explanatory Notes to 28 January 1963 (OJ, 1963, p. 189) and the the Brussels Nomenclature on tariff preamble to Regulation No 20/63 of the headings 11.02 and 11.01 define flour as Commission of 27 February 1963 (OJ, the 'pulverized' form of cereals.

sets out the scientific facts accepted at the relevant time to the proceedings and those 'During the years 1965 and 1966 tariff are the facts which must be considered in heading 11.01 referred to pulverized drawing up the definitions to be borne in products obtained inter alia by the milling mind in the present case. of maize and sorghum where those pro With regard to the question of the maxi ducts had a starch content in excess of 50 % mum or minimum starch or ash content and an ash content not exceeding 2 %'. necessary at the relevant time for a product to be classified under heading With regard to question 2(c) the Henck 11.02, the Henck undertaking states that, undertaking declares that tariff heading according to accepted scientific knowledge 23.07 serves as a 'catch-all' for forage at that time the content of maize in preparations, regardless of the starch or nitrogen-free substances fluctuated accord

HENCK ν HAUPT ZOLLAMT EMDEN

In addition the German Government refers The German Government observes that to the considerations which it set out re since only the classification of maize bran garding the first question. or flour is at issue in the present case it is The Commission of the European Com sufficient to take only those products into munities, referring first to the products of consideration. the milling industry mentioned under It recalls that, within the framework of a headings 11.01 and 11.02, observes that general distinction between headings 11.01 those products, which are obtained from and 11.02 and heading 23.02 of the the milling of various kinds of cereals, ex nomenclature, the Customs Cooperation hibit the composition of the cereal to be Council, Brussels, decided with regard to processed and having regard to the relevant the classification of products of the milling processing operations.

sumption. True residues of the extraction products coming under headings 11.01 of starch from maize have a starch content and 11.02 and the products referred to in not exceeding 20% when the various con heading 23.04, the Commission considers stituents of maize grain are separated by a that, by analogy with the criterion appli less advanced method. Processed maize cable to residues from the manufacture of products having a higher starch content starch established by the Court in respect more closely resemble products of the of heading 23.03, this must be based on milling industry with the same starch con their oil content which, according to tent with which they are, moreover, in specialist works, should not generally competition in the Community. exceed 8 % in the case of maize residues. Since modern methods for manufacturing Although such criteria are valid in dis starch from maize are based on breaking tinguishing the relevant products in their down the grain into its constituents as far pure state, more numerous and complex as possible and on separating it in the problems nevertheless arise regarding the course of several processes it is incon tariff classification of mixtures containing ceivable from an economic point of view very widely differing residues and other that a starch manufacturer would process processed cereal-based products.

Case 74/69 on the curacy of the tariff classification of a

product of this nature, despite the existence The Commission recalls that according to of very detailed tariff classifications. Having point IIC of the Explanatory Notes to the said that, the Commission, however, Brussels Nomenclature the following shall endeavours to lay down some theoretical not be considered as forage preparations: criteria for their assessment. When, be cause the residues have been mixed, it is 'Pellets made from a single material, or virtually impossible to determine a from a mixture of several materials which posteriori whether this is a product which is classified as such in one specific heading, originally came under Chapter 11 or even with an added binder (molara, whether it constitutes a mixed residue, the starchy substances, etc.) in a proportion purpose of the common organization of generally not exceeding 3% by weight the markets requires that products of (headings 07.06, 12.10, 23.01, etc.)'. identical or similar composition, value and possible uses should be subject to the same The Commission emphasizes that the levy the aim of which is to equalize prices. tariff classification of forage preparations The Commission supplies technical infor obtained by a simple mixture of various mation on the possible production and basic products gives rise to certain dif composition of by-products of the extrac

parations; tion is enormous and encompasses a large number of different products which, apart (b) not every product for the manufacture from the fact that they áre intended for of which a processed cereal product animal feeding, have only one common has been mixed with a substance which denominator, namely, that they constitute it does not generally contain necessarily preparations the composition and charac comes under heading 23.07. teristics of which may both vary to such a degree that they resist any uniform In general, classification under the heading definition on the basis of the maximum or in question presumes that the basic minimum percentages common to certain products have been mixed in a certain ingredients; for this reason the current proportion which renders each of them a edition of the Explanatory Notes to the decisive factor in the final preparation. Brussels Nomenclature does not define the relevant products in terms of the The third question proportions of their chemical constituents but on the basis of the nature and effect of According to the plaintiff in the main action, their chemical constituents and their question 3 is entirely inadmissible since it particular intended use. endeavours to obtain not an interpretation On the basis of such criteria the Com of Article 1 of Regulation No 19/62 but its

HENCK ν HAUPTZOLLAMT EMDEN

mixture produced intentionally and com­ contains, moreover, molasses, husks and posed of 78 % sorghum and 9 % sorghum maize bran it is impossible to determine gluten is already a mixture made up of whether that mixture is a new product. products coming under different tariff The German Government states that from headings and that 9% sorghum gluten the point of view of the customs tariff the mixed with 78 % sorghum results in a new two products referred to in this question product. come under tariff heading 23.07. Question 3(b) must be answered in the The Commission of the European Com­ negative since a mixture produced inten­ munities considers that the products men­ tionally and composed of 4.9% maize tioned in this question may be classified gluten and 80.08% sorghum gluten is a under heading 23.03 of the Common mixture made up of products coming Customs Tariff since the addition of under the same tariff heading and on the molasses indicates that this is a sweetened basis of the statement that the product forage preparation.

Grounds of judgment

1 By an order of 3 June 1971 which was received at the Court on 30 June 1971 the Finanzgericht Hamburg has referred to the Court of Justice, pursuant to Article 177 of the EEC Treaty, three questions on the interpretation of certain headings of the Common Customs Tariff.

2 First, the Court is asked to rule whether a product may be classified under heading 23.07 of the Common Customs Tariff and therefore made subject to the levy in application of Regulation (EEC) No 19/62 of the Council of 4 April 1962 on the sole basis of objective characteristics, that is, without regard to the manner in which it is produced or obtained and in particular irrespective of whether or not it is an intentional mixture.

6 The second question seeks to ascertain 'to what factual criteria must the composi­ tion of the product conform and in particular what must be its content in con­ stituents such as, for example, starch, proteins, fats etc. in order that it may be classified: (a) under heading 11.01 of the Common Customs Tariff, (b) under heading 11.02 of the Common Customs Tariff, (c) under heading 23.07 of the Common Customs Tariff'.

7 The third question seeks to ascertain whether 'a mixture intentionally produced comes under heading 23.07 of the Common Customs Tariff if it is composed either: (a) of 78% sorghum, 9% sorghum gluten and the remainder of molasses, maize husks and bran, or (b) of 4.9 % maize gluten, 80.08 % sorghum gluten and the remainder of molasses, maize husks and bran'.

8 It is desirable to answer both questions together.

9 Taking account of the problems brought before the German court those ques­ tions relate to processed maize and sorghum products and are designed to ascertain the distinction between those products and the residues referred to in headings 23.03 and 23.04 of the Common Customs Tariff. Heading 11.01 is accordingly worded 'Cereal flours' and heading 11.02 'Cereal groats, cereal meal; worked cereal grains, pearled, crushed, flattened (including flakes), except husked, glazed, polished or broken rice; germ of cereals, including flours thereof.

10 The classification of a product under one of those two headings cannot be affected by the fact that it has undergone processing if the processed product thereafter contains the essential constituents of the basic product in proportions which do not substantially differ from the content in those constituents which the relevant product exhibits in its natural state.

On those grounds,

Upon reading the pleadings ; Upon hearing the report of the Judge-Rapporteur; Upon hearing the observations of the plaintiff in the main action, the Government of the Federal Republic of Germany 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 ; Having regard to Regulation (EEC) No 19/62 of the Council of 4 April 1962; 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,

1 99

JUDGMENT OF 23.3.1972 — CASE 36/71

THE COURT

in answer to the questions referred to it by the Finanzgericht Hamburg (Fifth Chamber) in accordance with the order of that court of 3 June 1971, hereby rules:

A. Van Houtte R. Lecourt

Registrar President

OPINION OF MR ADVOCATE-GENERAL ROEMER DELIVERED ON 8 MARCH 1972<apnote>1</apnote>

Mr President, certain questions to this Court under Members of the Court, Article 177 of the EEC Treaty, imported into the Federal Republic of Germany During the period from April 1965 to under various descriptions processed cereal January 1966 the Henck undertaking, the products from Belgium. In the course of plaintiff before the court which has referred customs clearance, in accordance with the

1 — Translated from the French version.