C-49/73

The milkfat content of goods covered by even if their sugar content must be subheading 17.04-D-II of the Common increased during processing into the Customs Tariff must not be such as to finished product, are covered by effect the character of those products as subheading 17.04-D-II, provided that sugar confectionery. their composition specifically and definitely designates them for use in the Products in bulk form intended for use making of a certain category of sugar in the making of sugar confectionery, confectionery.

In Case 49/73

Reference to the Court of Justice of the European Communities under Article 177 of the EEC Treaty by the Hamburg Finanzgericht for a preliminary ruling in the action pending before that Court between

Herbert Fleischer, Import-Export, Berlin, plaintiff, and

Hauptzollamt Flensburg, defendant,

on the interpretation of headings 17.04-D-II and 21.07-F-VII of the Common Customs Tariff as established by EEC Regulation No 950/68 of the Council dated 28 June 1968 (OJ L 172,1968) and amended by EEC Regulation No 2451 of the Council dated 8 December 1969 (OJ L 311/1),

JUDGMENT

Issues of fact and of law

I — Facts and procedure clearance subsequently showed that the following raw materials were used in the The facts and procedure may be manufacture of the imported product summarized as follows: (the proportions are approximate): — 50 % butter or butterfat, In February 1970 Firma Herbert — 20 % sugar, Fleischer imported from Denmark a — 20 % glucose, product which was described in the vendor's invoice as 'bulk caramel' and in — 5 % milk powder, the customs declaration form as 'bulk' — Aromatic and flavouring material. caramel confectionery (containing more This analysis was performed by the than 70 % by weight of sucrose and Customs Technical Examination and more than 1.5 % by weight of milkfat, Training Centre (Zolltechnische otherwise containing only aromatic and Prüfungs- und Lehranstalt) of Hamburg- flavouring material)'. The customs office Altona, which at first considered that first assigned the goods to tariff heading the product should be classified under 17.04-D-II (c) of the Common Customs heading 17.04-D-II (a); subsequently, Tariff (CCT). 1 however, it was decided that the product Analysis by the customs technical service was equivalent to a 'sweetfat food of specimins taken at the customs preparation' and as such should be classified under heading 21.07-F-VII (b), 1 — 17.04 Sugar confectionery, not containing cocoa. (1). 2 In conformity with this finding the D. Other:

I — Containing no milkfats or containing 2 — 21.07 Food preparations not elsewhere specified or included: less than 1.5 % by weight of such fats: F. Other:

the interpretation to be put upon Article 20 of the Statute may be summarized as follows: subheading 17.04-D-II of the Common Customs Tariff is of decisive importance to the outcome of the main action and. Firma Fleischer, plaintiff in the main accordingly, by Order dated 22 February action, stated that the decisive question 1973, it stayed proceedings and referred was whether the product at issue must the following questions to the Court: be classified under tariff heading 17.04 or 21.07 of the Common Customs '1. Is the milkfat content in goods Tariff. within tariff heading 17.04-D-II The Explanatory Notes to the Brussels subject to any, and if so what, Nomenclature give the only valid limitation? indication of the correct interpretation to 2. Can half-finished products, in the be put upon tariff heading 17.04, since finishing of which sugar must be when the product was imported the added, be included in the sugar Nomenclature Committee had provided confectionery in this tariff heading? no explanation or drawn up any more precise provisions as to the scope of this 3. If Question 2 is answered in the affirmative: in this case does it tariff heading. The text of the Explanatory Notes to the Brussels depend upon the general opinion Nomenclature which applies here is as obtaining in the confectionery trade, follows: or on something else, and if so, what?' 'This heading covers most of the sugar This Order was registered at the Court preparations which are marketed in a on 15 March 1973. solid or semi-solid form, generally Firma Fleischer, represented by Jurgen suitable for immediate consumption and Hesse, of the Hamburg Bar, and the commonly referred to as sweetmeats or Commission of the European Communi­ confectionery. It includes inter alia: ties, represented by its legal adviser, boiled sweets, (including those contain­ Dieter Oldekop, submitted written ing malt extract); caramels, cachous, observations in accordance with Article candies, nougat, fondants, sugared 20 of the Statute of the Court of Justice almonds, Turkish delight; gums of the EEC. (including sweetened chewing-gum and the like). After hearing the report of the Judge-Rapporteur and the opinion of the The heading also covers pastes Advocate-General, the Court decided to containing sugar used for making open the oral procedure without any fondants, marzipan, nougat, etc preparatory inquiry. In the opinion of the plaintiff in the The plaintiff in the main action and the main action the Explanatory Notes make Commission made their oral observa­ it clear that goods included under tariff tions at the hearing on 26 September heading 17.04 have the following 1973. characteristics:

goods do indeed contain sugar. Question 2: since it is in the nature of pastes that other ingredients must be 2. The requirement that the goods have added to them in creating a finished a solid or semi-solid conistency presents product, it is clear that the addition of no problem here. sugar to pastes during the preparation of finished products is permitted. 3. The requirement that the product be suitable, in general, for immediate Question 3: the only feasible solution is consumption cannot be interpreted to refer to concepts current in the strictly in the case of 'pastes' for the confectionery trade, as suggested by the manufacture of sweetmeats. For such terms employed in the Common products the suitability for immediate Customs Tariff and the Explanatory Notes to the Brussels Nomenclature. consumption cannot be assessed by the same criteria as those applicable to The plaintiff's observations were finished products. Thus the term 'in summarized as follows: general' no doubt refers to pastes. 'A paste may not be classified under 4. To determine whether the product tariff heading 17.04 of the Common may be commonly referred to by the Customs Tariff if, owing to the names 'sweetmeat' or 'confectionery' and proportion of milkfat contained in the classified under tariff heading 17.04 it product, the latter loses the flavour may be necessary to examine it for taste. characteristic of a paste for the manufacture of sweetmeats. It is for the The product at issue here should have national court to decide whether or not the taste of a caramelized sweetmeat this is the case.' although it may not necessarily have precisely the taste of a particular finished The Commission prefaced its observa­ product, provided that the typically tions with the statement that the characteristic taste of the sweetmeat is outcome of the main action depended present. primarily upon the interpretation to be

put upon heading 17.04, since heading goods. In view of the large number of 21.07, in view of its subject-matter, is of recipes for the preparation of sweetmeats a subsidiary character. The tariff rating a maximum limit of general application of the goods in question is not for milkfat content could not be fixed. specifically laid down in any Community However, the following remarks suggest provision, nor in tariff provisions made that the milkfat content must in general under EEC Regulation No 97/69 of the be fairly small. Council of 16 January 1969 (OJ 1969, L 14/1), nor in in the form of explanatory (a) The trade arrangements laid down notes to the Common Customs Tariff. by Regulation (EEC) No 1059/69 of the Council of 28 May 1969 (OJ Referring to heading 17.04, as it stood 1969, L 141/1) applicable to certain when the import was made, the goods resulting from the processing Commission showed that a content of of agricultural products which do more than 1.5 % by weight of milkfat not appear on the list provided for does not, in theory, exclude a product by Article 38 of the EEC Treaty and from this heading. A comparison of which forms Annex II to that subheading I ('Containing no milkfats or Treaty, as supplemented by containing less than 1.5 % by weight of Regulation (EEC) No 1060/69 of the such fats') with subheading II Council of 28 May 1969 (OJ L 141/7, ('Other.

nery. It includes, inter alia: boiled sweets (including ingredient of goods covered by those containing malt extract); caramels, cachous, candies, nougat, fondants, sugared almonds, Turkish heading 17.04, the authors of the delight; gums (including sweetened chewing-gum Regulation would have had to take and the like); it into account. This heading also covers pastes containing sugar used for making fondants, marzipan, nougat etc. (b) The subdivisions of heading 17.04 themselves provide sufficient confir The heading does not cover: mation that in general products classified under this heading contain Sweetened food preparations such as fruit, fruit peel etc., preserved by sugar, and jams, fruit jellies, etc' only a small proportion of milkfat.

If the point of departure adopted by semi-finished products intended for the the authors of the Regulation had making of a certain type of sweetmeat, been that the milkfat content of and which, in general, display the sweetmeats could exceed 1.5 % by essential characteristics of the finished an appreciable margin, it is product. This interpretation must be inconceivable that they should not adopted, firstly, because the pastes have provided a larger number of mentioned in the Brussels Explanatory subheadings, graded according to Notes necessarily form part of the milkfat content, in order to allow concept of 'sugar confectionery' as used the variable component of the levy at heading 17.04 in the Common to play its protective role.

Finally, lower levy applied to maize, sugar or the general scheme of the Common whole milk powder (which, according to Customs Tariff itself is an indication; if Regulation (EEC) No 1060/69, are the non-specific compounds intended for the basic products for the sweetmeats under making of sugar confectionery could heading 17.04). also be classified under heading 17.04, the distinction to be made between this To conclude, the Commission's reply to heading and various headings in the first question would be as follows: Chapters 19, 20 and 21, in particular the The milkfat content for goods covered collective heading 21.07, would present by heading 17.04-D-II is limited in difficulties. so far as it must not alter their The differences between a paste intended character as sugar confectionery. The for the making of sugar confectionery assessment of such a maximum limit within the meaning of heading 17.04 and cannot be conducted within the the finished product, if the paste is to procedure laid down by Article 177, remain within the ambit of that heading, which applies only to interpretation of are thus of necessity limited.

Moreover this heading, but also sweetmeats in the any possibility of an alternative use for form of semi-finished products. This such a product would contravene the view is supported by the German term requirement stating that it must be a 'Rohmasse' (which is wider than the specific semi-finished product. terms 'pâtes' and 'pastes' in the French The Commission suggested that and English versions) and by the phrase Questions 2 and 3 should be answered 'used for making.

FLEISCHER v HAUPTZOLLAMT FLENSBURG

sugar confectionery are deemed to be product, the the extent that such pastes sugar confectionery even if their sugar already amount to specific semi-finished content must be increased for the products to be used in the making of a purpose of processing into the finished definite category of sugar confectionery.

Grounds of judgment

1 By order dated 22 February 1973, filed at the Court of Justice on 15 March 1973, the Hamburg Finanzgericht referred, under Article 177 of the EEC Treaty, three questions on the interpretation of subheading 17.04-D-II of the Common Customs Tariff.

It appears from the order that the questions refer to the tariff classification of a product imported into the Federal Republic from Denmark in February 1970, designated 'bulk caramel' and containing about 50 % butter or butterfat, about 20 % sugar, about 20% glucose, about 5 % milk powder and aromatic and flavouring material.

On the first question

Thus the fixing of this limit must be left to the discretion of the court charged with the application of the Common Customs Tariff in each case, having regard to the fact that the milkfat content of goods covered by subheading 17.04-D-II of the Common Customs Tariff must not be such as to alter the character of those products as sugar confectionery.

On the second and third questions

4 It is asked whether semi-finished products, in the finishing of which sugar must be added, can be included in 'sugar confectionery' within the meaning of subheading 17.04-D-II and, if so, whether such classification depends upon the general opinion obtaining in the confectionery trade.

5 The Explanatory Notes to the Brussels Nomenclature state with regard to heading 17.04 that the heading also covers 'pastes used for making fondants, marzipan, nougat etc'.

Therefore products in the form of semi-finished products are to be classified under this heading if they already display the specific and essential charac­ teristics of 'sugar confectionery'.

6 Whilst the product in its bulk form, not having attained its final composition in respect of its principal ingredients and requiring, for example, the addition of sugar, may, in some cases, show the characteristics of sugar confectionery within the meaning of heading 17.04, its composition must specifically and definitely designate it for use in the making of a certain category of sugar confectionery.

Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the observations of the plaintiff in the main action 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 Regulation No 950/68 EEC of the Council of 28 June 1968 establishing the Common Customs Tariff; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities;

THE COURT

in answer to the questions referred to it by the Hamburg Finanzgericht, by order of that Court dated 22 February 1973, hereby rules:

1. The milkfat content of goods covered by subheading 17.04-D-II of the Common Customs Tariff must not be such as to affect the character of those products as sugar confectionery;

2. Products in bulk form intended for use in the making of sugar confec­ tionery, even if their sugar content must be increased during pro­ cessing into the finished product, are covered by subheading 17.04-D-II, provided that their composition specifically and definitely designates

OPINION OF MR TRABUCCHI — CASE 49/73

OPINION OF MR ADVOCATE-GENERAL TRABUCCHI

DELIVERED ON 24 OCTOBER 1973 1

Mr President, product whose actual assignment is Members of the Court, being discussed by the national court. I will take as much care as possible to The dispute between the parties in the avoid doing so while at the same time case pending before the national court is bearing in mind the need to give the here concerned with whether a product national court a useful reply which will should be assigned to tariff heading clear up the matter. 17.04 ('Sugar confectionery, not We are here concerned with a product containing cocoa') of heading 21.07 imported in 1970 from Denmark and ('Food preparations not elsewhere which was described in the vendor's specified or included') of the Common invoice as 'bulk caramel' and in the Customs Tariff. It is for us to explain customs declaration form as 'bulk the meaning of the Customs Tariff in caramel confectionery' and appearing on this respect, so as to enable the national analysis to contain less than 50 % by court to apply it correctly to this case. weight of sucrose and 46.4 % of milkfat. As often happens in the interpretation of The relevant customs office, after having the Common Customs Tariff, although carried out an analysis of the product the national court took care to make its giving the results indicated above, questions appear abstract, nevertheless, decided to assign the product to tariff in attempting to give a useful reply there heading 21.07-F-VII-b-1. The German is the risk of letting oneself be dragged importer objected to that decision, into an examination of the facts and of maintaining that the product was considering specifically the particular covered by heading 17.04, for which the