C-92/71

on the interpretation of the words 'added sugar' appearing in No 2 of the Addi­ tional Notes to Chapter 20 of the Common Customs Tariff,

THE COURT

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

Advocate-General: K. Roemer

Registrar : A. Van Houtte

gives the following

and on the scope of the said additional Interfood GmbH, represented by Dietrich note. Ehle, the Government of the Federal After the Finanzgericht Hamburg had been Republic of Germany, represented by requested to give a ruling on the dismissal Rudolf Morowitz, assisted by Ernst H. of the complaint it decided, by an order of Cludius and Harry Schäpe, and the Com­ 15 October 1971 to stay the proceedings mission of the European Communities, and to request the Court to give a pre­ represented by its Legal Adviser, Peter liminary ruling on the following questions: Gilsdorf, acting as Agent, submitted observations in accordance with Article 'Question I 20 of the Protocol on the Statute of the Court. Must subheading 20.06 B II(a) 6(bb) of Upon hearing the report of the Judge- the Common Customs Tariff read together Rapporteur and the views of the Advocate- with Additional Note No 2 to Chapter 20 General the Court decided to open the be interpreted to mean that, when fruit oral procedure without any preparatory (other than pineapples and grapes) referred inquiry. to under heading 20.06 of the tariff has a Interfood GmbH, the Government of the sugar content which, determined in ac­ Federal Republic of Germany and the cordance with Additional Note No 1 to Commission of the European Communities Chapter 20, exceeds 9% by weight but is presented oral argument at the hearing on less than 13%, it is liable to customs duty 24 February 1972. at the high rate prescribed for fruit con­ The Advocate-General delivered his taining added sugar (regardless of whether opinion at the hearing on 21 March 1972. sugar has been added), despite the fact that fruit prepared without added sugar in packings of a net capacity of 4.5 kg or II — Written observations sub­ more is specifically referred to under sub­ mitted under Article 20 of the heading 20.06 B II(c) of the Common Protocol on the Statute of the Customs Tariff which fixes the rate of Court duty for apricots at 17 %?

Common Customs Tariff the distinction The first conclusion to be drawn from between the two subheadings in dispute this is that Additional Note No 2 does not presented no problem since the tariff constitute a legal definition even as classification of the products was decided regards the classification of products in solely on the basis of the sugar actually the customs tariff. It is merely a rule of added. Following the introduction of the interpretation facilitating the classification additional notes the practice regarding of products in this tariff. The principles laid tariff classification underwent a modifica down by the Court in its judgment in Case

The word Chapter 20. They could constitute 'gelten' appearing in this note and in Article 2(3) of Regulation No 865/68 does — either a non-exclusive rule of inter not imply that each time the legislature pretation intended to facilitate the used this word it intended to establish tariff classification of a product; an irrebuttable presumption regarding certain factual elements for, as the judg — or a legal definition binding the customs ment in Case 3/71 shows, this word may, authorities. taking account of the objectives and of the overall plan of the rules, constitute a In its judgment in Case 3/71 the Court simple presumption.

the levy. However this view must of customs duties provided for by the Com necessity prevail also with regard to the mon Customs Tariff. It is precisely the customs tariff. amount of such duties which indicates Additional Note No 2 cannot be inter whether or not sugar has been added to preted differently in the Common Customs the product during processing. Tariff, a fortiori in the same chapter, according as it relates to the classification (c) Interfood adds that in any event the of a product for the purposes of imposing interpretation of the disputed Note 2 as a the levy or imposing customs duties. legal definition based on a fiction amounts It is clear from Article 9(2) of Regulation to ignoring the fact that the Finanzgericht No 865/68 (second half) that a tariff Hamburg has already pointed out in its nomenclature constitutes an entity appli order of reference that one and the same cable for the purposes both of the liability concept (the addition of sugar) must not of a product to the levy and of its classifica be differently interpreted in the same tion in the customs tariff: the rules of chapter, in one place as a simple presump interpretation also constitute an entity. tion and in another as an irrebuttable pre In the first half of this provision there is no sumption according as the liability of a reference to the additional notes: the latter product to the levy or its classification in follow solely from Article 2 of Regulation the Common Customs Tariff is concerned.

INTERFOOD ν HAUPTZOLLAMT HAMBURG

The importer may Furthermore it is clear from the wording of prove that the product in question only Article 18 of Regulation No 865/68 that it contains natural sugar. This ruling also must be applied in such a way that account applies to the tariff classification of apricots is taken of the objectives of Articles 39 with a sugar content exceeding 9%. and 110 of the Treaty. The importation of Nevertheless, despite this division of the apricots without added sugar does not burden of proof, it is in principle for the affect those objectives since Community customs administration to prove that the production in this sector does not meet classification applied by it is well founded. the needs of the Community. On the other Although in exceptional cases there is a hand the classification of apricots without presumption in favour of the customs added sugar under the subheading laid administration, with an opportunity for the down for apricots with added sugar importer to submit evidence to the con infringes the principle of liberalizing trary, such exceptions should however be customs and external trade as set out in strictly limited.

More over the principal customs offices were — from the level of the price of sugar instructed to draw up a report to that which is continually rising in Spain so Ministry for 1 September 1971 regarding that adding sugar would produce an the findings made in this respect. Interfood unacceptable increase in the price of the requests that the outcome of those reports product and would consequently dis should be communicated to the Court or courage purchasers; notified to the parties concerned. It considers that the reply to the first — from the fact that of itself the content

most cases of imports of apricot pulp it is certain Member States since the fifties a quite unnecessary to prove that no sugar distinction has been made within this head has been added to the product since such ing between products with added sugar and an addition would not make commercial products without added sugar. sense. Furthermore the customs admini This distinction was adopted by the deci stration would be less burdened with sion of the Council of 13 February 1960 work if it were to analyse apricot pulp approving part of the Common Customs exclusively by sample instead of analysing Tariff (JO 80 A, 1960) and providing at each batch to determine the tariff classifica Chapter 20 of the tariff for a provision tion of the goods. If in a specific case conforming to No 2 of the Additional serious doubts were to arise whether or not Notes to the Common Customs Tariff. sugar had been added to a product the From the initial entry into force of the importer should be entitled to submit Common Customs Tariff this provision evidence to the contrary. In principle it is has formed an integral part of the tariff. however for the importer to determine the It corresponds to the concessions agreed mode of proof to be employed. This in the course of the Dillon Round of GATT evidence might be constituted not only by a (1960 to 1961). With regard to all the declaration from the forwarding agent and consolidated duties under tariff headings production of an export certificate but also 20.06 B II and 20.07 B I to VII, List XL in by an expert's opinion indicating primarily Annexes A to the GATT Protocol, repeat the degrees of variation in the natural ing the results of the 1960 to 1961 Confer sugar content of the fruit in question in the ence, was clarified by an explanatory note course of the relevant year in the country indicating

particular case. mate doubts whether the product contains only natural sugar, the importer is justified The undertaking given by the Member in adducing contrary evidence by the States of the EEC under GATT with means at his disposal in order to prove that regard to heading 20.06 and the structure no sugar has been added to the product'. of the Common Customs Tariff are thus in accord. The interpretation of Additional B — Written observations submitted by the Note No 2 must be deduced from this Government of the Federal Republic relationship. of Germany On the other hand this interpretation had no connexion with the provisions adopted (a) The German Government refers of all in 1967 on the common organizations of to the historical background to heading the market. It was only with regard to its

INTERFOOD ν HAUPTZOLLAMT HAMBURG

Such an organiza pressed the view with regard to the meaning tion of the markets does not lay down the of the word 'gelten' appearing in No 2 of tariff classification of a product but merely the Additional Notes to the Common makes provision under certain conditions Customs Tariff (German version) that it for a levy on products which come under a may not be interpreted as a presumption certain tariff subheading Even if no levy capable of being rebutted by evidence to were imposed, for example because cal the contrary. culation of the sugar content did not reveal First of all against this interpretation there a quantity of sugar subject to the levy, must be set the fact that the subdivision such calculation would not in any way of tariff heading 20.06 was not effected in alter the classification connexion with the common organization of the market in sugar and the organization (c) By means of technical considerations, for processed fruit and vegetable products. supported by an expert opinion appended It is a purely tariff measure, that is to say, to its statement, the German Government one taken in international interests in also remarks that there is no technical order to classify products under a clear process which can determine the origin of

Only in this way can international agree The German Government adds that those ments make reference to specific products considerations are not intended to take and the uniform Community application of account of cases in which there are added a customs union be ensured. As a result to prepared fruit types of sugar which do the Common Customs Tariff does not not exist in the fruit in its natural state recognize simple presumptions because or which do so only in insignificant they frequently give rise to different clas quantities or which include additional sub sifications as the burden of proof on the stances which the fruit does not contain.

Nomenclature. By using indifferently the words 'gelten', 'gehören' or 'sind' in 'No 2 of the Additional Notes to Chapter several chapters the wording of the 20 of the Common Customs Tariff deter customs tariff indicates clearly that it mines the classification of products coming

under heading 20.06 solely in terms of content exceeds 7 % or 13 % it is subject their sugar content independently of to the system for fruit preserved in a whether sugar has in fact been added to sugar solution without its being neces such products'. sary to investigate the origin of the sugar in either case. It will be noted The second question and as an alternative that the French tariff has refrained from employing the term of 'added 'The question of the classification of sugar' or an equivalent concept products referred to in heading 20.06 of although the fixing of a higher rate of the Common Customs Tariff is a prelimin customs duties for preserves with a ary to that of the levy within the meaning of sugar content exceeding 7 % or 13 % Regulation No 865/68. was based on the consideration that in Classification of products which varies general sugar is added to such fruit. according to evidence is impossible'. The French system was adopted by the Common Customs Tariff from the C — Written observations submitted by the moment when it came into existence Commission of the European Com

How with the established practice of the Member ever, as is clear from the preparatory States since the entry into force of the work on the Common Customs Tariff Common Customs Tariff. there was no question of departing from the principle of the French tariff (a) In support of this view the Commission wherein it is intended that the fixed invokes the historical precedents for the percentages should constitute an ab relevant provisions of the Common Cus solute criterion for classification under toms Tariff. the heading carrying with it a higher or lower rate of customs duty. (i) It recalls first of all that the Common Customs Tariff was the outcome of a (ii) The Commission then recalls the Dillon regrouping and overlapping of the negotiations and their outcome.

INTERFOOD ν HAUPTZOLLAMT HAMBURG

by weight'. It is significant that the involves right to levy this additional duty (which subsequently was to become the — either, in the case of chemical proof, levy) did not depend in this reservation obliging the importer to submit an on the existence of 'added sugar' but 'impossible' proof to the contrary, on the simple fact that a certain percentage was exceeded. — or the admission of evidence other than chemical evidence. However there is no (b) These considerations are also confirmed other reliable proof which meets the by an approach based on logic and the requirements of a customs administra establishment of the concepts of the cus tion working quickly under practical

stration. tions are applied without admitting proof to the contrary. (d) Finally with regard to the effect of the judgment in Case 3/71 on the present (c) It is moreover impossible for technical proceedings the Commission raises the reasons to distinguish natural sugar from question whether such a judgment can be added sugar and for this reason the upheld in that it could not have taken

account of a fact—that chemical analysis attached to the letter L shown against cannot distinguish added sugar in preserved certain tariff subheadings. fruit from natural sugar—which the Court did not know or at any rate did not know The second question with the same accuracy and certainty as it does today. If the Court were however to The Commission observes that if, despite think reconsideration unnecessary or, its view, the Court felt obliged to give a after reconsideration, were to uphold that negative reply to the first question this judgment, the decision to be taken in the would of necessity involve an affirmative present case would in no way be pre­ reply to the second question and thus an judiced. interpretation of Additional Note No 2 In that judgment the Court interpreted as a simple presumption for classification Article 2 of Regulation No 865/68 on the in general. basis of the declared objective of the system According to the judgment in Case 3/71 of levies, that is to say, the protection of the burden of proof that the product does the organization of the markets against not contain added sugar rests on the added sugar. Similar reasons cannot importer. It must nevertheles be made prevail in fixing the rate of customs duty clear that this proof to the contrary does as the Community legislature is generally not relate to the sugar content in general free in this matter. It could have made a but only to the question whether sugar has higher rate of customs duty depend upon been added. If the importer is unable to a higher sugar content without its being of prove that no sugar has been added to the the slightest importance from the point of product it is impossible for him to prove view of the ratio legis to ascertain whether that the natural sugar content exceeds the this content derives from added sugar. rates in the legal fiction (9 % in the case of In Case 3/71 the Court also found that the apricots). The Commission requests that system of the organization of the market is the judgment should provide a complete in principle independent of tariff law. clarification of this point which is of The opposite is also true in that the tariff considerable practical importance and provisions must in principle receive an expresses the wish that the Court should interpretation independent of the provi­ indicate the manner in which the contrary sions of the organization of the markets. proof required of the importer must be The Commission subsequently expounds adduced in practice. its argument by recalling that Additional The Commission recalls that it has sug­ Note No 2 relates exclusively to the tariff gested an affirmative reply to the first classification of a product and emphasizes question which would render superfluous the purely indicative value which must be consideration of the second question.

4 The plaintiff in the main action maintains that this note merely establishes a presumption as to the classification which may be rebutted by evidence to the contrary.

It maintains in particular that since this was the solution adopted by the Court in its judgment of 17 June 1971 in Case 3/71 for the purpose of the application of the levy, the same solution must prevail for the purpose of the customs tariff.

The applicant considers it inadmissible that within the same tariff and the same chapter a classification provision may be interpreted differently according as it relates to the classification of the product for the purpose of imposing the levy or for the purpose of customs duties.

5 Such an argument fails to observe the independent nature of the provisions of the common organization of the agricultural markets.

Although, in accordance with Article 9(2) of Regulation No 865/68 of the Council of 28 June 1968 (OJ L 153, 1968, English Special Edition 1968(I), p. 225), the implementing provisions of the Common Customs Tariff apply to the classification of products coming under the common organization of the agricultural markets established by this regulation, such classification is conclusive regarding the im­ position of customs duties but is merely a guide regarding any levy chargeable.

JUDGMENT OF 26.4.1973 — CASE 92/71

7 The absolute nature of this criterion emerges yet more clearly from the conditions relating to the right of the Community to make limited exceptions to the principle of consolidation of customs duties.

According to the express wording of Note (2) to List XL of the Protocol to the General Agreement on Tariffs and Trade repeating the results of the Tariff Conference of 1960 to 1961 consent was granted to the reservation in favour of the application by the Community, over and above the consolidated customs duty, of an additional duty on sugar not because the product contained added sugar but because the quantity of sugar it contained in excess of a content which for the products under heading 20.06 was 9 % and 13 % by weight.

If it was possible to justify the imposition of an additional duty it was, in the express words of this reservation, not because sugar had been added but because per­ centages of sugar had been exceeded.

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8 This conclusion is confirmed with particular regard to the Community by the section of the Common Customs Tariff approved by the Decision of the Council of 13 February 1960 (JO 80 A 1960) and referring inter alia to the products under heading 20.06.

The structure of this heading, which classified products without added sugar and those with added sugar under the same subheadings, shows clearly that those who drew up the tariff did not intend that the origin of the sugar contained in such products should be a conclusive criterion for tariff classification.

11 The costs incurred by the Government of the Federal Republic of Germany and by the Commission of the European Communities which submitted observations to the Court are not recoverable and since these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pend­ ing 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;

JUDGMENT OF 26.4.1972 — CASE 92/71

Upon hearing the oral observations of the undertaking Interfood GmbH, 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, especially Article 177; Having regard to the Decision of the Council of 13 February 1960 (JO. 80A, 1960); Having regard to the Regulations of Council No 865/68 of 28 June 1968 (OJ L 153, English Special Edition 1968 (I), p. 225) and No 2451/69 of 8 December 1969 (JO, L 311, 1961); 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