C-91/74

In Case 91/74

Reference to the Court under Article 177 of the EEC Treaty by the Bundesfinanzhof (Federal Finance Court) for a preliminary ruling in the action pending before that court between

HAUPTZOLLAMT HAMBURG-ERICUS

and

HAMBURG IMPORT-KOMPANIE GMBH, Winsen/Luhe,

on the interpretation of tariff subheadings 20.07 B II (a) 1 and 20.07 B II (b) 1 (aa) of the Common Customs Tariff, together with the General Rules relating to the Common Customs Tariff, Section C, paragraphs 1 and 2 (b),

JUDGMENT

Issues of fact and of law

The facts of the case, the procedure and importation was DM 109-80 (30 u.a.) per the observations submitted under Article 100 kg. Fruit juice the value of which 20 of the Protocol on the Statute of the exceeded this amount fell under tariff Court of Justice of the EEC may be heading 20.07 B II (a) 1 and could be summarized as follows: imported without imposition of the levy. If the value of the fruit juice was lower than that limit, it was treated as a I — Facts and procedure product coming under tariff heading 20.07 B II (b) 1 (aa) and thus subject to On 16 June 1970, Hamburger the levy. Import-Kompanie submitted for customs clearance a consignment of 1 248 cartons On an examination of three bottles, the of concentrated orange juice with an customs authorities found a net average added sugar content exceeding 30 % by weight of 930 grammes per bottle. They weight and of a specific gravity of 1-33 or put this weight against the invoiced price less at 15 ° C. According to the of DM 11-80 per carton und thus declaration each carton contained twelve obtained a value of DM 105-73 per 100 bottles, each with a net content of 895 kg net weight, which caused them to grammes. The invoice price was stated to classify the goods under tariff subheading be DM 11-80 per carton, giving a book 20.07 B II (b) 1 (aa), the products of value of DM 109-89 per 100 kg of which are subject to the levy. The concentrated orange juice. amount of the levy to be paid was calculated at DM 3 985-48. According to the nomenclature in Annex B to Regulation (EEC) No 455/69 of the In its action against this decision the Council of 11 March 1969 (Official plaintiff pointed out that it had only Journal, Special Edition 1969 (I), p. 103), bought quantities of guaranteed content, repeated in the Common Customs Tariff, being 895 grammes per bottle. The in respect of the tariff classification for foreign supplier had exceeded the concentrated orange juice there is a limit minimum content in order to guarantee in value, which at the time of a weight of 895 grammes and to

The Finanzgericht Hamburg found in favour of the plaintiff on the ground that II — Written observations sub­ it was necessary to take into account not mitted to the Court the value per 100 kg actual net weight of the goods but only the weight taken by The plaintiff in 'the main action points the parties to the contract as the basis for out that the question put by the determining the invoiced price, which is Bundesfinanzhof in fact contains two decisive for establishing the value for questions. The first concerns whether, for customs purposes. the purpose of classification of tariff headings 20.07 B II (a) 1 and 20.07 B II Following an appeal on a point of law by (b) 1 (aa) of the Common Customs Tariff the defendant, the main action is now read in conjunction with the General pending before the Bundesfinanzhof, Rules on the Common Customs Tariff, which by order of 23 October 1974 has Section C, paragraphs 1 and 2 (b), it is suspended proceedings and referred to necessary to take as the basis the actual the Court of Justice of the European net weight in accordance with Section C, Communities under Article 177 of the paragraph 2 (b), or the net weight EEC Treaty for a preliminary ruling on calculated according to the provisions the following question: relating to the value for customs purposes in accordance with Section C, For the purpose of classification under paragraph 1. tariff subheading 20.07 B II (a) 1 or 20.07 B II (b) 1 (aa) of the Common In order to interpret the criterion of tariff Customs Tariff read in conjunction with classification 'of a value exceeding 30 u.a. the General Rules on the Common per 100 kg net weight' one may only Customs Tariff, Section C, paragraphs 1 take into account Section C, paragraph 1, and 2 (b), in a case where the invoice of those rules. In support of this price is adopted as the basis of valuation, argument, the plaintiff makes the is the determining factor the actual net following points: weight of the imported goods or the -Regulation (EEC) No 455/69 of the minimum weight per unit agreed in the Council of 11 March 1969 (OJ, contract of purchase, where, under such a Special Edition 1969 (I), p. 103) is contract, it is customary in the trade to intended to introduce a uniform supply an additional quantity without criterion for classification of certain further charge? tariff headings, based on value.

According to the terms of the recitals customs purposes and that in principle it in the preamble to this regulation, is necessary to determine the normal that objective (that is to say, here, the price — as provided for in Article 4 (1) of exemption from the levy of fruit the regulation on the valuation of goods juices having a high concentration of for customs purposes — by presuming natural sugar) may be achieved to a that the sale turns on the quantity of the large extent 'by excluding juices with goods to be valued. The plaintiff also a value in excess of a given amount'. alleges that there is, however, a series of — The formulae used in the Common cases in which the quantity bought and Customs Tariff also show the value as the quantities to be valued are in fact the decisive criterion of tariff different; in such cases the sole classification whilst the net weight determining factor is the whether has merely a subsidiary function. 'corrections in weight' have altered the — Section C, paragraph 2 (b), of the invoiced price and whether they conform General Rules on the Common to trade usage. Customs Tariff only refers to the case in which the weight is the sole In the present case the sole interest of criterion for classification of certain the plaintiff as an importer consists in tariff headings. the observance of a certain minimum weight for reasons arising from the The question put by the Bundes­ provisions relating to foodstuffs, and that finanzhof also concerns whether — in minimum weight is also the only factor the case of acceptance of the invoiced in the determination of the price. The price as the basis of assessment — additional quantity had the effect of reference must be made to the actual net reducing or excluding the risk inherent weight of the imported goods or the in bottling. minimum weight per unit agreed upon in the contract of sale, where in the context of such an agreement an For the purpose of classification of additional content free of charge is in tariff headings 20.07 B II (a) 1 and conformity with trade usage. Finally, the 20.07 B II (b) 1 (aa) of the Common question put by the Bundesfinanzhof Customs Tariff, the provisions relating to relates to the interpretation of Article 4 the value for customs purposes must be (1) of the regulation on the valuation of applied in accordance with the General goods for customs purposes (Regulation Rules on the Common Customs Tariff, (EEC) No 803/68 of the Council of 27 Section C, paragraph 1. June 1968, OJ, Special Edition 1968 (I), p. 170), in relation to the case in The value for customs purposes may only question. relate to the quantity which has been made the subject-matter of the contract The plaintiff maintains that Article 4 of of sale to the extent to which, in this that regulation must be interpreted in the case, the additional quantity has had no context of the provision of principle, that influence on the price. is to say, the concept of the normal price in Article 1 of the said regulation. It The Commission refers to the General

correctly to interpret these two concepts amount of the levy on 100 kg of the one must start from the necessity to have product in question in relation to the uniform criteria of assessment. Such a actual weight of the consignment which necessity is emphasized in the General is imported. Rules applicable both to nomenclature and to duties (Common Customs Tariff, With regard to the calculation of the Section I, General Rules, Section C, value for customs purposes, the paragraphs 1 and 2) which provide that: Commission refers to the provisions of — 'Unless provided otherwise, the Regulation (EEC) No 803/68 of the provisions relating to value for Council (OJ, Special Edition 1968 (I), customs purposes shall be applied to p. 170).

In so far as it — The dutiable weight, in the case of fulfils the conditions which the normal goods chargeable by weight, and the price must meet, the 'invoiced price' weight by reference to which the actually paid or to be paid by the scope of certain headings or purchaser may be accepted as the value subheadings is defined, shall be taken for customs purposes (Article 9 of the to be . . . in the case of a reference to regulation). In the case in particular in "net weight" or simply to "weight" which individual conditions of payment without qualification, the weight of and discounts have had an influence on the goods themselves without the invoiced price, it must be determined packing of any kind.' whether that price may be accepted without adjustment as the value for According to the Commission, the customs purposes. According to Article 4

Common Customs Tariff. Above all, the but only the quantity actually imported, objective of this provision, like the to be assessed and to be cleared through objective of the Common Customs Tariff customs when determining the value for itself, shows that these expressions do not customs purposes. In addition, the refer to some hypothetical weight abovementioned provision lays down that appearing in contracts or invoices but the value for customs purposes must be solely to the actual weight of imported fixed for all the quantities of goods

JUDGMENT OF 10. 6. 1975 —CASE 91/74

acceptance of the invoiced price as the basis of valuation the decisive factor is The Advocate-General delivered his the actual net weight of the imported opinion on 15 May 1975.

Law

1 By order of 23 October 1974, received at the Registry on 11 December 1974, the Bundesfinanzhof has asked the Court, under Article 177 of the EEC Treaty, to rule whether, for the purpose of classification under tariff

HAUPTZOLLAMT HAMBURG-ERICUS v HAMBURGER IMPORT-KOMPANIE

subheadings 20.07 B II (a) 1 and 20.07 B II (b) 1 (aa) of the Common Customs Tariff, the determining factor is 'in a case where the invoice price is adopted as the basis of valuation, the actual net weight of the imported goods or the minimum weight per unit agreed in the contract of purchase, where, under such a contract, it is customary in the trade to supply an additional quantity without further charge'.

2 Regulation (EEC) No 455/69 of the Council of 11 March 1969 (OJ, Special Edition 1969 (I), p. 103), considering that 'the charging of a levy on fruit or vegetable juices falling within subheading No 20.07 B which have a high concentration of natural sugar should be avoided' and that 'that objective may be achieved to a large extent by excluding.juices with a value in excess of a given amount from the levy', introduced into the Common Customs Tariff a distinction between headings:

JUDGMENT OF 10.6. 1975 —CASE 91/74

the goods and not according to their declared net weight, classified the goods under heading 20.07 B II (b) 1 (aa) and required payment of a levy in respect of added sugar content of DM 3 985-48.

4 According to Section C, paragraph 1, of the General Rules on the Common Customs Tariff 'Unless provided otherwise, the provisions relating to value for customs purposes shall be applied to determine, in addition to the value for the assessment of ad valorem customs duties, the values by reference to which the scope of certain headings or subheadings is defined'.

5 According to the importer of the consignment in dispute, once it is common ground, as in this case, that the price paid must be accepted as the value for customs purposes, in accordance with Article 9 of Regulation (EEC) No 803/68 of the Council of 27 June 1968 on the valuation of goods for customs purposes, it follows that both the price and the net weight established by the invoice are to be taken into account as that price can only refer to that weight on a sale by weight of generic goods.

6 However, this reasoning takes insufficient account of the particular features of the question of interpretation put by the national court, which states that under the terms of the contract of sale 'a minimum weight per unit' is agreed.

This fact is confirmed moreover by the additional explanations put forward by the importer itself according to which the weight of 895 grammes per bottle was necessary for the goods to comply with requirements of German legislation relating to weights and measures.

Costs

8 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable.

As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the Bundesfinanzhof, costs are a matter for that court.

On those grounds,

THE COURT

in answer to the question referred to it by the Bundesfinanzhof by order of 23 October 1974, hereby rules:

A. Van Houtte R. Lecourt

Registrar President

OPINION OF MR ADVOCATE-GENERAL WARNER DELIVERED ON 15 MAY 1975

My Lords, the 'direct and substantial incidence' on the cost of certain of those products of This case comes to the Court by way of a prices for sugar, glucose and glucose reference for a preliminary ruling by the syrup. Bundesfinanzhof. The essential question that that Court has to decide is whether Article 2 of the Regulation accordingly provided that, in addition to the customs the Respondent before it, the Hamburger duty imposed under the Common Import-Kompanie GmbH, is liable, Customs Tariff, an import levy should be under Community legislation, to pay a charged on added sugars contained in, levy on an importation, which it effected among other products, 'fruit and in June 1970, of concentrated vegetable juices with an added sugar orange-juice from Israel. content exceeding 30 % by weight'. The amount of the levy was to be calculated, That question arises in this way. in accordance with a prescribed formula, from the levy already imposed on certain On 28 June 1968 the Council adopted products (mainly syrups) included in the Regulation (EEC) No 865/68 (JO L 153 common organization of the market in of 1.7.1968) on the common sugar. That organization, Your Lordships organization of the market in products remember, had been established by processed from fruit and vegetables. One Council Regulation No 1009/67/EEC of of the objects of that Regulation, was, as 18 December 1967. its preamble evinces, to bring the trading system for such products into line with It was soon found that in practice it was the trading system for sugar, in view of difficult to determine by analysis, at all