C-128/73
ECLI:EU:C:1973:126
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JUDGMENT OF THE COURT OF 22 NOVEMBER 1973 1
Past & Co. KG
v Hauptzollamt Freiburg (preliminary ruling requested by the Finanzgericht Baden-Württemberg)
'Chrome-tanned skins'
Case 128/73
Summary
Common Customs Tariff — Description of goods — Sheep and lamb skin leather — Tanning — Fat — Addition — Classification under tariff heading 41.03 B I
The addition of fat does not alter the insofar as it constitutes a process inherent classification of sheep and lamb skin in tanning aimed at preserving the leather leather under subheading 41.03 B I without making it ready for use.
In Case 128/73
Reference to the Court under Article 177 of the EEC Treaty, by the Baden- "Württemberg Finanzgericht for a preliminary ruling in the action pending be fore that court between
Past & Co . KG, and
Hauptzollamt Freiburg,
on the interpretation of subheadings I and II of tariff heading 41.03-B of the Common Customs Tariff,
THE COURT
composed of: R. Lecourt, President, A. M. Donner and M. Sørensen,
1 — Language of the Case: German.
JUDGMENT OF 22. 11. 1973 — CASE 128/73
Presidents of Chambers, R. Monaco, J. Mertens de Wilmars, P. Pescatore and A. J. Mackenzie Stuart (Rapporteur), Judges,
Advocate-General: A. Trabucchi Registrar: A. Van Houtte
gives the following
JUDGMENT
Issues of fact and of law
The facts, claims and issues have given The Explanatory Notes of the Brussels rise to the following report for the Nomenclature on heading 41.02 (the hearing: notes on heading 41.03 refer to the previous heading) give the following details: I — Facts and procedure 'These processes render the hides and 1. The issue in the main action is the skins resistant to decay, and increase classification to be given to sheep and their physical strength and impermeabil lamb skin leather imported from Spain ity to water. Before undergoing tanning into the Federal Republic of Germany on proper, hides and skins are first 20 August 1971. The matter concerns subjected to a series of preparatory chrome-tanned skins to which a certain processes, which consist in soaking them quantity of fat had been added. in alkaline solutions (to soften them and remove the salt), dehairing and fleshing, 2. Sheep and lamb skin leather comes then removing the lime and other under tariff heading 41.03 of the substances used in dehairing, and finally Common Customs Tariff which is rinsing. sub-divided as follows:
41.03 They are then either 'vegetable tanned' (in baths containing certain woods, A. Of Indian cross-bred sheep and barks, leaves, etc., or their extracts), goats, not further prepared than 'mineral tanned' (with mineral salts, e.g., vegetable tanned, whether or not chrome salts, iron salts, or alums) or having undergone further preserva 'chemically tanned' (with formaldehyde tive treatment with oil, but obviously or certain synthetic chemicals). unsuitable for immediate use in the Sometimes combinations of these manufacture of leather articles. processes are used. Tanning of heavy B. Other: leather by a mixture of alum and salt is known as Hungarian dressing, while in I. Not further prepared than tanned tawing a mixture of salt, alum, egg yolk II. Other and flour is used. Tawed hides and skins
PAST v HAUPTZOLLAMT FREIBURG
are used mainly for glove-making and in Freiburg, classified them under the manufacture of high quality subheading 41.03 B II. footwear. According to the plaintiff in the main It is to be noted that the heading action the classification of the skins excludes all skins which have been under subheading B I is in accordance oil-tanned (chamois-dressed), or which with the Common Customs Tariff and have been parchment-dressed (headings the Explanatory Notes of the Brussels 41.06 and 41.07 respectively).
Nomenclature. Chrome-tanned skin After tanning, the 'crust' leather requires cannot be, in principle, other than skin further treatment ('currying') to remove tanned by using fat. The use of fat would irregularities of the surface and render it only result in an 'other' skin when ready for use by making it more supple, employed in preparation after tanning. waterproof, etc. These processes consist According to the plaintiff this follows of further working by softening, from the Explanatory Notes of the stretching, thinning, beating, rolling to Brussels Nomenclature and in particular harden the surface, and feeding the words 'after tanning'. ('stuffing') with oils.' According to the customs office feeding
3. For subheading 41.03 B I the is a preparatory operation which goes Explanatory Notes of the Common beyond simple tanning. The words 'after Customs Tariff provide: tanning' do not indicate anything to the contrary. 'Skins and leather not further prepared than tanned are mainly recognizable by It is moreover impossible to determine the fairly large number of fibres of whether foreign matter has been subcutaneous origin on their inner incorporated into the skins during or surface, particularly at the edges. after tanning. Because of this the inner surface is 5. The Committee on Nomenclature of
fibrous and rough. Partly tanned skins the Common Customs Tariff has given and leathers (pretanned) are treated as the following opinion during the session not further prepared than tanned. of 18/22 September 1972: Processes (e.g. washing, mangling, 'The Committee considers that leathers pressing, drying and stretching) intended to which fat has been added, no matter to finish tanning properly so called, at what stage, can no longer be during which products used in tanning considered as 'not further prepared than are removed, as is also any water which tanned' within the meaning of may still be there, do not alter the subheadings 41.03 B I, 41.04 B I, and classification of the skins and leathers. 41.05 B I. This applies also to mere splitting of The Committee instructs the 'Explana skins and leathers not further prepared tory Notes of the CCT' working party than tanned'.
to prepare a draft explanatory note Subheading 41.03 B II provides: defining this position. 'Tanned skins and leathers which have The 'Explanatory Notes of the CCT' been subjected to other preparations are working party must however take into included under this subheading. As to account the technological evolution with the nature of these preparations, it regard to tanning liquids. The German suffices to refer to the Explanatory delegation agrees to draw up a Notes of the Brussels Nomenclature preliminary draft which it will forward 41.02 paragraphs 5 and 6'. to the Commission as soon as possible.'
4. The plaintiff declared the goods as 6. The Finanzgericht Baden-Württem 'not further prepared than tanned' berg, which was called upon to ad (41.03 B I), whereas the Customs Office judicate on the plaintiff's appeal against
JUDGMENT OF 22. 11. 1973 — CASE 128/73
the defendant's decision, decided by could have easily have been done by the Order dated 28 March 1973 to stay the addition of the word 'during', so that the proceedings and to refer the following fifth paragraph of said notes would question to the Court for a preliminary begin as follows: 'During and after ruling: tanning ...' 'Must subheading I and II of tariff The Committee on Nomenclature at the heading 41.03 B of the Common Commission (in the opinion already Customs Tariff (CCT) be interpreted as cited) has at least admitted that the meaning that a chrome-tanned skin is no Explanatory Notes are ambiguous in longer a skin not further prepared than their current form. tanned when fat has been added in Nevertheless, since it considers the said tanning, notes are explicit, the plaintiff considers or that the opinion of the Committee that chrome-tanned skin is still a skin not constitutes a modification of the further prepared than tanned when fat is Explanatory Notes. added in tanning or before the first In reply to the fear of the customs office drying solely with the object of of no longer being able to distinguish a improving tanning and when, moreover, leather fed during tanning from a leather it neither eliminates nor replaces other fed after tanning, it considers that operations in its preparation?' chrome-tanned leathers should be
7. The Order of reference was classified under the heading 'not further prepared than tanned', insofar as these registered at the Court on 20 April 1973. leathers are not manifestly greasy to the 8. On the report of the Judge-Rappor touch, which would be easy to establish. teur, after hearing the Advocate-General, The Commission observes that it the Court decided to proceed without appears clearly from the expression 'nur any preparatory inquiry. gegerbt' that a leather 'nur gegerbt' 9. The plaintiff and the Commission of denotes a product which has been subjected to all the operations inherent the European Communities have submitted written observations'. in tanning whatever the degree of completion of this process, provided that in this latter case, operations are not II — Observations submit included which go beyond tanning. The ted under Article 20 of leather may be only, and not more than, the Protocol on the tanned. This interpretation is confirmed Statute of the Court of by the Dutch, English, and Danish texts, whereas the French and Italian texts Justice of the EEC ('simplement tannés' and 'semplicemente The plaintiff in the main action observes conciati') are ambiguous. They could be that with regard to chrome-tanned skin interpreted to mean tanned without the specialist would include in the complication, by a more or less description of a skin as 'not further rudimentary process. But they ought prepared than tanned' only a skin which clearly to be understood in the sense of has been fed during tanning. 'only', which 'simplement' also means in French. In its opinion the Explanatory Notes of the Nomenclature confirm this technical The distinction between 'lamb skin principle. They are very explicit as leather which has not been further regards the feeding of leathers. If there prepared than tanned' and 'other' had been the intention in the notes of conforms, in conjunction with the stating that feeding in the course of different tariff treatment governing the tanning constituted a preparation it products according to as they come
PAST v HAUPTZOLLAMT FREIBURG
under subheading 41.03 B I or under processes which go beyond the purpose subheading 41.03 B II, to the objective and effect of tanning come under pursued by the Community legislature: if subheading 41.03 B II. importers tan and work leather for Nevertheless, there is a danger of obvious economic reasons in third twilight areas existing between the countries, the latter must pay higher processes of tanning and currying. An customs duties provided for under examination of the file in the present subheading 41.03 B II. case may allow the general problem of The Explanatory Notes of the tariff delimitation between the two subhead heading 41.03 of the Common Customs ings in question to be seen more clearly. Tariff made by the Commission of the In the present case it is a question of the European Communities and partly import of greased and dried chrome- referring to the explanatory Notes of the tanned sheep and lamb skin. Brussels Nomenclature provide only Grease is added in the normal way as general indications with regard to part of the process of feeding leather, tanning and its limits.
They allow which takes place after tanning, to the various ties to continue; for example extent that this goes beyond the whether the addition of fat at the time of preservation of the leather and gives tanning goes beyond simply tanning. tanned leather the properties of softness, The Commission considers that the mechanical resistance, greater or lesser distinction between sheep and lamb skin elasticity according to the intended use. leather 'not further prepared than The question comes back to ascertaining tanned' and leather which has received whether this addition is or is not part of treatment going beyond tanning must be the process of tanning itself.
The made having regard in particular to the question is raised in an acute form in the objective characteristics and properties case where the greased chrome-tanned of the products. leather has been imported 'dry', as has The fundamental criterion distinguishing happened more and more for some ten between the two subheadings in question years for economic reasons and in depends, in the absence of other express particular transport. provision in the tariff itself, on an It appears from the Explanatory Notes examination of the objective characteris of the Common Customs Tariff that tics and properties of tanning. drying is part of the process of finishing The Explanatory Notes of the Brussels the tanning of leather and this does not Nomenclature expressly state that after change the classification of the leathers: tanning the processes of currying have this means that dried leathers normally the effect of rendering the tanned skins remain classified under subheading 41.03 and leathers ready for use.
Sheep and B I. lamb skin leather, insofar as it is not In view of the hydrophobic properties of further prepared than tanned, cannot chrome salt, chrome tanned leather risks therefore be used for making leather having its fibres destroyed or seriously articles. damaged if it is dried without certain The Commission arrives at the substances termed fat liquids having conclusion that leathers are included in been previously added to the tanning subheading 41.03 B I, which had been material. subjected to the processes inherent in In the light of these general criteria, tanning, that is to say those whose sheep and lamb skin leather, to which purpose is to preserve the leather and fat has been added in tanning, remains which do not render the tanned leather classified under subheading 41.03 B I ready for use for the manufacture of a provided that it is established that this leather article. On the other hand addition is necessary and indispensable leathers which have been subjected to in the process of tanning, that is to say
JUDGMENT OF 22. 11. 1973 — CASE 128/73
for the preservation of leather without tions: the expression 'not further the addition rendering the leather prepared than tanned' in subheading suitable for immediate use. 41.03 B I must be interpreted to mean The Commission considers that the time that it designates products which have when fat is added to the leather is not only been subjected to the treatment the decisive criterion in the classification: inherent in the process of tanning, the the decisive criterion is whether this purpose of which is to preserve the leather without making it suitable for addition is or is not part of the process immediate use. Consequently, treatment of tanning. such as the addition of fat does not The exclusion without exception of involve changing the tariff classification tanned sheep and lamb skin leather from of sheep and lamb skin leather 'not subheading 41.03 B I by reason of the further prepared than tanned', to the addition of fat would mean prejudicing extent that it is shown to be the answer to a technical problem which indispensable to tanning. can only be determined individually. Following the report for the hearing set It appears from the opinion expressed by out above, the parties made oral the Committee on Customs Nomencla observations on 23 October 1973. ture in September 1972 that it is, of The oral observations of the course, by reason of the role of fat Commission of the European Communi matter in the process of tanning that ties were made at the hearing on 23 sheep and lamb skin leather so treated October 1973. The Commission's legal are not a priori excluded from adviser Mr. Oldekop appeared for the subheading 41.03 B I. Commission.
The Commission is of the opinion that The Advocate-General delivered his the reply to the question posed could be opinion at the hearing on 8 November determined by the following considera- 1973.
Grounds of judgment
1 By order dated 28 March 1973, filed at the Registry on 20 April 1973, the Finanzgericht of Baden-Württemberg referred to the Court for a preliminary ruling the interpretation of subheadings 41.03 B I, 'sheep and lamb skin leather not further prepared than tanned', and 41.03 B II, 'other', of the Common Customs Tariff.
2 More precisely the question is whether 'chrome-tanned skin is no longer a skin" not further prepared than tanned" when fat has been added in tanning'.
3 The decisive criterion for the customs classification of goods must generally be looked for in the objective characteristics and properties of products.
According to the Explanatory Notes of the Brussels Nomenclature relating to tariff heading 41.02, and applicable likewise to tariff heading 41.03,
PAST v HAUPTZOLLAMT FREIBURG
tanning renders hides and skins resistant to decay and increases their physical strength and impermeability to water.
4 The Notes specify that hides and skins which have had further treatment going beyond tanning, aimed at rendering them ready for use by, in particular, making them more supple, come under subheading 41.03 B II.
According to the Explanatory Notes of the Common Customs Tariff, processes intended to complete the tanning, e.g. drying the skins, do not alter their classification as hides and skins 'not further prepared than tanned'.
5 "Whilst, according to the Notes, the addition of fat normally comes within the framework of processes which follow tanning, it is conceivable that, for technical reasons, in particular to avoid deterioration of the fibres resulting from a dried skin, the addition of fat to the tanning liquids is indispensable in order to proceed to the second phase of the treatment in the importing country.
This interpretation is not invalidated by the opinion given by the Committee on Customs Nomenclature at its 67th meeting in September 1972, which, while accepting that the addition of fat generally went beyond tanning, considers that the working party charged with defining this position in an explanatory note, should take into account the technological evolution in tanning liquids.
6 Consequently while the fact that a hide or skin has received an addition of fat will normally involve its classification under subheading 41.03 B II, the competent national authorities must judge whether the addition in question constitutes an essential process in tanning by reason of its function of preserving the leather without rendering it ready for use.
Costs
7 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable, and as these proceedings are, insofar as the parties to the main action are concerned, a step in the action pending before a national court, the decision on costs is a matter for that court.
JUDGMENT OF 22. 11. 1973 — CASE 128/73
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 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 relating to 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 question referred to it by the Finanzgericht Baden-Württem berg by order of that court dated 28 March 1973, hereby rules:
the addition of fat does not alter the classification of sheep and lamb skin leather under subheading 41.03 B I insofar as it constitutes a pro cess inherent in tanning by reason of its function of preserving the lea ther without making it ready for use.
Lecourt Donner Sørensen
Monaco Mertens de Wilmars Pescatore Mackenzie Stuart
Delivered in open court in Luxembourg on 22 November 1973.
A. Van Houtte R. Lecourt
Registrar President