C-38/75

JUDGMENT OF 19. 11. 1975 — CASE 38/75

is concerned, the Community has 5. The "classification opinions expressed replaced the Member States, the by the Customs Cooperation Council mandatory effect, in law, of these do not bind the Contracting Parties commitments must be determined by but they have a bearing on reference to the relevant provisions in interpretation which is all the more the Community legal system and not decisive they emanate from an to those which gave them their authority entrusted by the Contracting previous force under the national legal Parties with ensuring uniformity in systems. the interpretation and application of 4. The Community has replaced the the nomenclature. When such an Member States in commitments interpretation reflects the general arising from the Convention of 15 practice followed by the Contracting December 1950 on Nomenclature for States, it can be set aside only if it the Classification of Goods in appears incompatible with the Customs Tariffs and from the wording of the heading concerned or Convention of the same date goes manifestly beyond the discretion establishing a Customs Cooperation conferred on the Customs Cooper­ Council. ation Council.

In Case 38/75

Reference to the Court under Article 177 of the EEC Treaty by the Tariefcommissie (Tariff Commission) for a preliminary ruling in the action pending before it between

DOUANEAGENT DER NV NEDERLANDSE SPOORWEGEN (Customs Agent of the Netherlands Railways), Venlo (The Netherlands)

and

NEDERLANDSE SPOORWEGEN v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN

JUDGMENT

Facts

The decision making the reference and As the duty applicable to goods under written observations submitted under heading 84.54 B had, in the course of the Article 20 of the Statute of the Court of multilateral negotiations under GATT Justice of the EEC may be summarized (Kennedy Round) been reduced to 7.2 %, as follows: the importer believed that the Additional Note in Regulation No 1/71 contravened Article II of GATT in 'transferring' the I — Facts and procedure goods in question from a heading bound at 7.2 % to a heading attracting a duty of On 28 April 1971, the applicant in the 14 %. When his objection was dismissed, main action imported, from a third he brought an action before the country, a xerographic duplicator for the Tariefcommissie which has decided, reproduction of documents. before giving a ruling, to stay the proceedings and to refer to the Court of The Netherlands customs authorities Justice for a preliminary ruling the classified this apparatus under heading following three questions: 90.07 A (Photographic cameras) of the 1. In the light of inter alia the Common Customs Tariff (CCT) and aforementioned considerations is it charged duty at 14 % thereon. This permissible for apparatus such as that classification is in accordance with an in question in these proceedings — Additional Note inserted in Chapter 90 which in the opinion of the Tariff of the CCT by Regulation (EEC) No Commission does not come within 1/71 of the Council of 17 December the description of heading 90.07 but 1970 which, with effect from 1 January which does in fact completely comply 1971, amended the Common Customs with the literal description of another Tariff in the following terms 'Apparatus heading, that is to say heading 84.54, for the automatic reproduction of so as to render Note 1 (1) of documents by means of static electricity, Classification XVI as it stood at the

international law have legally binding force after they have come into The order of 11 June 1974 making the existence in the prescribed manner reference was not communicated to the and have been published, further in parties until 15 April 1975 and entered at the light of the fact that the GATT the Court Registry on 16 April 1975. Treaty, to which the Netherlands are a party, constitutes such an agreement Upon hearing the report of the and finally in the light of the fact that Judge-Rapporteur and the views of the Advocate-General, the Court decided that the aforementioned heading 84.54 together with the duty attaching there was no need for any preparatory thereto, was bound on the occasion of inquiry. the so-called Kennedy Round within Written observations were submitted by the framework of GATT, is it the Commission and the Council of the permissible contrary to the afore­ European Communities pursuant to mentioned binding and without any Article 20 of the Protocol on the Statute provision being made in relation to of the Court of Justice of the EEC. the Netherlands, for a higher duty to be charged in respect of the goods failing within this heading by II — Observations submitted classifying this product under another under Article 20 of the chapter and another heading by Statute of the Court of means of a regulation of the Council Justice of the EEC of the EEC? In the light of the priority of the 1. Observations of the Commission Treaty obligations of the Community over acts of its organs and — First question independently of the question whether a GATT provision is or is not The Commission notes that the first suited to create rights in relation to question concerns the validity, under the citizen upon which he can rely Community law, of the note inserted in before a court — is not a Netherlands Chapter 90 of the CCT (Common court bound in cases which are Customs Tariff), although the national submitted to it to apply GATT court has not specified which provision it provisions which are suitable for considers has been infringed. direct application even though it may thereby come into conflict with According to the Commission, the Community law? Community legislature is, under Articles 3. Does not the Council by the making 28 and 113 of the Treaty, alone of an additional note such as is competent to determine or amend the involved in this case come into CCT and its nomenclature. The insertion conflict with the opligations assumed of the disputed note does not conflict by Member States within the with either of these two articles. framework of the Convention of 15 December 1950 in the matter of The Commission denies that the transfer nomenclature for the classification of one item of goods from one tariff

heading to another simply by means of a Produktschap voor Groenten en Fruit, note, without any adaptation of the text Rec. 1972, p. 1219) and of 24 October of the new tariff heading, is, as the 1973 (Case 9/73, Schlüter v Haupt Tariefcommissie appears to think, zollamt Lörrach [1973] ECR 1135). contrary to the principles of good

within the meaning of Article 113 of the fabrieken v Hoofdproduktschap voor EEC Treaty, the Community has, with Akkerbouwprodukten [1973] ECR 651). the agreement of the other contracting The binding force of these notes is, parties, progressively assumed the rights moreover, clearly explained in the 'Rules and obligations arising therefrom and, for the interpretation of the even though the position has not yet nomenclature of the Common Customs been regularized by the Community's Tariff (under A of the first part of joining GATT as repesentative of the Section I of the CCT).

Whether or not the not the case, it does not follow that the scale of tariffs based on the note validity of the contested note can be complies with the Netherlands scale has, challenged in proceedings under Article therefore, little bearing on the validity of 177 of the Treaty. The provisions of the note. GATT, in particular Article II, governing the binding of customs duties, cannot in Moreover, the national schedules of fact entitle those subject to Community tariffs binding the Member States were law to avail themselves of those replaced by a Community schedule, provisions in the courts. In support of based on the Common Customs Tariff this, the Commission cites the judgments and by adjustments, agreed in the court of the Court of 12 December 1972 of re-negotiations under Article XXIV (6) (Joined Cases 21 to 24/72, International of GATT, to cover cases where Fruit Company and Others v substitution of national tariffs by the

The Commission first addresses itself to Nomenclature which the Community the question whether the Convention of uses in its independent system of import 15 December 1950 on Nomenclature for and export duties. Similarly, amend­ ments of the Brussels Nomenclature the Classification of Goods in Customs Tariffs can be relied upon when a which are recommended by the Customs preliminary ruling is being sought Cooperation Council and are accepted by concerning the validity of a Community the contracting parties are embodied in enactment. As a result of the precedent the CCT nomenclature by means of established by the Court in its judgment regulations of the [EEC] Council. of 12 December 1972, the first question In conclusion, the Commission points to be determined is whether the out that, even if it were necessary Convention binds the Community and, to recognize the Convention on consequently, whether its provisions are Nomenclature as having direct effect, the capable of entitling those subject to Community legislature has in any case Community law to avail themselves of it acted in accordance with it. The before the courts. The Commission takes contested note in fact accords with the the view that, since the nine Member classification opinion expressed by the States are party both to the Convention Customs Cooperation Council in 1965. on Nomenclature and to that setting up Obviously, the classification opinions of the Customs Cooperation Council and the Customs Cooperation Council do not have established the Common Customs have the binding force of a legal rule but Tariff in accordance with the Brussels they nevertheless represent a means Nomenclature, the Community, which whereby, in the absence of any relevant alone has competence in the tariff field, Community provisions, tariff headings assumed all the rights and obligations of can be interpreted. the Member States on the basis of the Convention and is, in consequence, The 1965 classification opinion was, as a bound by it. There can, however, be general rule, followed within the Com­ no question of the Convention on munity and outside it. The Netherlands Nomenclature entitling subjects of the authorities themselves classified the Community to avail themselves thereof apparatus in question under tariff head­ in the courts. Both its wording which, ing 90.07 A until the Tarifcommissie's inter alia, provides that disputes decision of 2 February 1970, as a result of the contracting parties concerning the which it was classified under heading interpretation or application of the 84.54 B. With effect from 1 January Convention shall be settled by 1971, the authorities went back to clas­ negotiations (between the parties sification under tariff heading 90.07 A.

Realizing that the classification suggested Annex to Regulation No 1/71 and it in 1965 was not entirely satisfactory, the therefore forms part of the provision Customs Cooperation Council re­ made by the regulation. The binding commended that a solution be found force of Additional Notes is clear from which would enable all photo-copying the judgment of the Court of 20 June apparatus to be classified under the same 1973 (Case 80/72, Koninklijke Lassie­ heading, whether it was based on an fabrieken v Hoofdproduktschap voor optical system, or was of the contact or Akkerbouwprodukten [1973] ECR 635). thermo-copying type. Moreover, the classification of goods without amending the nomenclature is This object was achieved by Regulation current practice, to which there is a (EEC) No 1/72 of the Council of 20 reference in Regulation (EEC) No 97/69 December 1971 (OJ L 1 of 1.1. 1972) of 16 January 1969 on measures to be which amended tariff heading 90.10 in taken for uniform application of the the manner suggested and cancelled the nomenclature of the Common Customs Additional Note. Tariff (OJ, English Special Edition 1969 (I), p. 12). In conclusion, the Commission is of the opinion that there is nothing in the The interpretation placed by a national questions referred which discloses any court on the nomenclature of the factor which might affect the validity of Customs Tariff cannot affect the power the note inserted in Chapter 90 of the of the Community institutions to lay CCT with effect from 1 January 1971 by down an interpretation of their own Regulation No 1/71 of the Council. which, in the present case, accords with the classification opinion of the Customs 2. Observations of the Council Cooperation Council. According to the judgment delivered by the Court on 8 The Council considers that the questions December 1970 (Case 14/70, Deutsche referred are the outcome of a legally Bakels GmbH v Oberfinanzdirektion incorrect description of the insertion in München [1970] ECR 1001), these the Common Customs Tariff of the opinions are a great help in interpreting contested note. The latter must be the CCT. regarded as an authentic interpretation which does not alter the existing position Second question in law. Under Articles 28 and 113 of the Treaty, the Council is competent to The second question is without purpose, dertemine the classification of goods in since the Council did not classify the the CCT and also to clarify it and give it apparatus in question under a tariff a binding interpretation. Contrary to the heading other than that to which it impression created by the wording of the previously belonged and, consequently, questions referred by the Tarief­ there has been no increase in duties. The commissie, the insertion of the contested argument based on a binding within note did not change the nomenclature, subheading 84.54 B under GATT is the duty to be applied or the scope of irrelevant since the apparatus in question tariff heading 90.07. was never, since the CCT came into force, within the subheading. The First question Council would nevertheless like to

international law, the country has entered with the obligations of the into. The Council states that the Community under the Geneva discharge of international commitments Agreements of 30 June 1967; arising from a binding under GATT has, — since the nature of the Additional since the Common Customs Tariff came Note was riot such as to change the into force or, at least, since the end of the scope of heading 90.07, there cannot transitional period, no longer been be any conflict between its insertion within the competence of Member States. and the obligations which may arise Only the Community can validly enter from the Convention on Nomen into such commitments and only the clature for the Classification of Goods Community is entitled to discharge in Customs Tariffs.

national authorities. obligation set forth in Article II of the Brussels Convention on Nomenclature If a national court holds that a provision which the Council in any case considers of Community law conflicts with itself under an obligation to observe. obligations under international law it can and, if it is the final court of appeal, must refer any question touching its validity to The Council suggests that the following the Court of Justice. replies should be given to the questions referred by the Tariefcommissie: — the Additional Note inserted in The Council considers that the second question calls for the following reply: Chapter 90 pursuant to Regulation — the Additional Note inserted in No 1/71 did not result in any increase in the customs duties Chapter 90 pursuant to Regulation No 1/71, under which 'Apparatus applicable to xerographic photo for the automatic reproduction of copying apparatus and this in itself documents by means of static leaves without purpose the question electricity, equipped with an optical whether or not the alleged increase is

field under international law. CCT was established; there has been no consequential increase in the duty to be applied and there is therefore The Council, represented by its Agent, no reason for considering whether or Mr Peeters and the Commission, not this enactment is compatible represented by its Agent, Mr Fischer,

4 The plaintiff in the main action contests the decision of the authorities on the ground that the product in question ought to have been classified under sub-heading 84.54 B (Other office machines) and to have been charged to the 7.2 % duty under the General Agreement on Tariffs and Trade (GATT).

5 The plaintiff relies mainly on the decisions of the Tariefcommissie of 2 February 1970 concerning goods imported into the Netherlands before the entry into force on 1 July 1968 of the CCT, which, interpreting the Benelux Customs Tariff previously in force in the Netherlands, classified the type of apparatus in question under subheading 84.54 B.

6 As a result of these decisions and despite the entry into force meanwhile of the CCT, the Netherlands customs authorities, in view of the identical

JUDGMENT OF 19. 11. 1975 — CASE 38/75

wording of the headings concerned in the CCT and in the Benelux Tariff, continued to classify these goods under subheading 84.54 B and to charge duty at 7-2 % until the entry into force on 1 January 1971 of Regulation No 1/71 of the Council amending the CCT and containing the Additional Note in question, as a result of which they applied heading 90.07 A and duty at 14 %.

First question

NEDERLANDSE SPOORWEGEN v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN

Second question

13 The second question is as follows:

In the light of the fact that on the basis of Articles 60 and 65 of the Constitution of the Kingdom of the Netherlands agreements with other powers and with organizations in international law have legally binding force after they have come into existence in the prescribed manner and have been published, further in the light of the fact that the GATT Treaty, to which the Netherlands are a party, constitutes such an agreement and finally in the light of the fact that the aforementioned heading 84.54 together with the duty attaching thereto, was bound on the occasion of the so-called Kennedy Round within the framework of GATT, is it permissible contrary to the aforementioned binding and without any provision being made in relation to the Netherlands, for a higher duty to be charged in respect of the goods falling within this heading by classifying this product under another chapter and another heading by means of a regulation of the Council of the EEC?

In the light of the priority of the Treaty obligations of the Community over acts of its organs and — independently of the question whether a GATT provision is or is not suited to create rights in relation to the citizen upon which he can rely before a court — is not a Netherlands court bound in cases which are submitted to it to apply GATT provisions which are suitable for direct application even though it may thereby come into conflict with Community law?

14 With effect from 1 July 1968 and, moreover, in accordance with Article XXIV of GATT, the CCT replaced the national customs tariffs of the Member States and, subject to review by the courts responsible for applying and interpreting Community law, in particular on questions raised under Article 177 of the Treaty, the Community authorities alone have jurisdiction to interpret and determine the legal effect of the headings which it comprises.

Third question

20 The third question asks whether the Additional Note infringes the obligations arising from the Convention of 15 December 1950 on Nomenclature for the Classification of Goods in Customs Tariffs, in particular Article II (b) (ii), containing a provision prohibiting the amendment of the notes to the chapters and sections in such a way as to change the purport of the chapters, sections and headings in the Nomenclature.

21 Just as, in the case of commitments arising from GATT, the Community has replaced the Member States in commitments arising from the Convention of 15 December 1950 on Nomenclature for the Classification of Goods in

Customs Tariffs and from the Convention of the same date establishing a Customs Cooperation Council, and is bound by the said commitments.

NEDERLANDSE SPOORWEGEN v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN

22 Among the commitments embodied in the first of these Conventions is to be found, under Article II (b) (ii) the obligation of each Contracting Party that 'it will make no changes in the chapter or section notes in a manner modifying the scopte of the chapters, sections and headings as laid down in the Nomenclature'.

JUDGMENT OF 19. 11. 1975 — CASE 38/75

Costs

28 The costs incurred by the Council and the Commission of the European Communities, which submitted observations to the Court, are not recoverable.

29 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 national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT

Registrar President