C-38/76

HAUPTZOLLAMT DUISBURG (Principal Customs Office, Duisburg),

on the interpretation of heading 73.02 G read in conjuntion with Note 1 (c) (No 73.02) of the Common Customs Tariff

THE COURT (Second Chamber)

composed of: P. Pescatore, President of Chamber, Lord Mackenzie Stuart and

A. Touffait, Judges,

Advocate-General: F. Capotorti Registrar: A. Van Houtte

Protocol on the Statute of the Court of Germany waste and scrap metal of iron Justice EEC may be coming from the United Kingdom. The of'

the summarized

as follows: materials are re-melted in the United

Kingdom, cast and transported in the

form of notched plates kown as 'lumps'. I — Facts and written procedure The proportions of their metal content

vary with the quality and composition of Industriemetall LUMA GmbH, a limited the basic materials; they are

goods, which had a tungsten content of conditions laid down in Note 1 (c) to 30 to 33 %, also had a cobalt content of Chapter 73 of the Common Customs more than 10 %. On the opinion of the Tariff were fulfilled, namely that alloys of Zolltechnische Prüfungs- und iron which contain a total of more than Lehranstalt Köln (Customs Inspection 10 % by of alloy elements are weight and Training Department), the Zollamt deemed to be ferro-alloys. As the goods Duisburg-Ruhrort, by a decision of could clearly be classified under heading amendment February of 1973,15 73.02 G, General Rule No 4 was said to classified the goods imported by LUMA, be inapplicable, this conclusion being on the ground that they contained more confirmed by the Notes Explicatives du than 10 % alloy elements, under tariff of Tarif Douanier Commun concerning heading 73.02 G ('ferro-alloys: other') for heading 73.15. The Opinion of the which the Common Customs Tariff Committee on Common Customs Tariff prescribes a rate of autonomous and Nomenclature of 20 October 1970 was conventional duties of 7 %; as a result it irrelevant, since it related to a re-melted requested Luma to pay duty amounting product having a cobalt content of less in all to DM 7 807-37. than 10 %.

On 18 March 1973 LUMA submitted a Since the IVth Senate of the

complaint against this decision of Finanzgericht Düsseldorf considered that

amendment to the Hauptzollamt in order to settle the dispute before it was Duisburg. necessary to know how tariff headings 73.02 and 73.15 B I (b) 1 (aa) of the That complaint was rejected on 27 July Common Customs Tariff are to be 1973. defined and distinguished from one

means those products which were an interpretation is not thereby affected.

manufactured as such from new metals It may however be considered that an

or ores and which are distinguished by interpretation of subheading 73.02 G, reason of their intended use in the read together with Note 1 (c) to Chapter making of steel by an accurately 73, which has particular regard to the

predetermined, constant composition of specific subject-matter of the preliminary specific alloy elements? question, is sufficient to distinguish the or two subheadings in question without its does heading 73.02 also include melted being necessary to add an authoritative down scrap (material for re-melting) interpretation of subheading 73.15 B I (b) which satisfies the requirements as to 1 (aa). composition laid down in Note 1 (c) to 73?' The substance of the case turns on Chapter whether the fact that a consignment

delivered to the plaintiff in the main The order of the Finanzgericht action had a cobalt content of more than Düsseldorf was received at the Court 10 % because a particularly large Registry on 30 April 1976. of cobalt was quantity unintentionally included in the basic material in itself In accordance with Article 20 of the justifies or requires an alteration in the Protocol on the Statute of the Court of

Justice of the EEC the Commission of duty payable on the goods and their

the tariff classification of goods: the form account of the criterion; in this

and dimensions, the stage of processing, case automatic recourse to the

the type of manufacture, the use and the Classification Opinion of 20 October constituent elements. Special emphasis is 1970 is thus excluded.

given to the composition of the goods; it constitutes the general basis upon which From the point of view of tariff subsequent subdivisions and classi­ classification there is an important fications depend. difference between products with a cobalt

content of less than 10 % and those with When the classification of goods under a a cobalt content of more than 10 %: the tariff heading involves the use of several latter comply with a specific criterion of criteria at the same time, such criteria Note 1 (c) to Chapter 73, as opposed to have identical status, as material Note 1 (d), and fulfil the condition as to conditions of classification. Nevertheless, constituent elements justifying their certain criteria are decisive when goods 'binary'

classification as ferro-alloys do not come under any of the headings under heading 73.02 (ferro-alloys). of the Common Customs Tariff; in this

conform to all the criteria of any one of rough shape, still very crude (ingots and

the relevant headings. This finding plates) with an irregular, uneven surface.

induced the Committee on Common The Explanatory Notes to the Brussels Customs Tariff Nomenclature to propose Nomenclature and the Notes in its Classification Opinion of 20 Explicatives du Tarif Douanier Commun October 1970 that the goods should be are in accord with the wording, the aim

classified under subheading 73.15 B I (b) and the nomenclature of the Common 1 (aa) since the goods under that heading Customs Tariff: they lay down as a

were 'the most akin'. criterion for ferro-alloys the presence of

'large proportions of alloy elements'

JUDGMENT OF 16. 12. 1976 - CASE 38/76

73.02'

headings of heading and that With regard to the two other

waste and scrap metal which has been characteristics (materials which are not

re-melted and cast into ingots 'shall be usefully malleable and which are chiefly considered'

as ferro-alloys or ingots and used as a raw material in the manufacture 'shall be classified according to its of ferrous metals), it is sufficient in the

Common The question submitted by the Customs Tariff must be Finanzgericht Düsseldorf thus calls for classified under the same heading as the

latter; those words in no way infer a the following reply: 'real'

contrast with ferro-alloys. Lumps obtained by re-melting waste and scrap metal or iron which are not From the scientific and technical point usefully malleable and are commonly of view the definition of a ferro-alloy is used as raw material in the manufacture

appreciably different from the definition of ferrous metals and which contain one adopted by the Common Customs Tariff; or more of the alloy elements referred to the customs aspect and the technical in Note 1 (c) to Chapter 73 of the point of view are not identical. The Common Customs Tariff in the criteria for tariff classification provided in proportions laid down in that note must the subheadings in the Common be classified as ferro-alloys under heading Customs Tariff are intended to enable it 73.02. to be validly ascertained, by the use of

the most objective criteria possible, under

which heading goods should be classified Ill — Oral procedure when customs clearance is obtained. In this respect it is of little importance, The Commission of the European from the point of view of tariff Communities, represented by its Legal classification, to establish from what Adviser, Manfred Beschel, submitted its materials and by what special processes 27 oral observations at the hearing on steel plates have been manufactured, if October 1976. the goods themselves display the

LUMA v HAUPTZOLLAMT DUISBURG

2 It appears from the information supplied by the national court that the

plaintiff in the main action has for some years imported from the United 'lumps'

Kingdom re-melted ferrous scrap containing tungsten, in the form of

having a tungsten content of approximately 30 % and a cobalt content of

between 5 and 10 %.

consignment of re-melted tungsten which the customs office scrap containing clearance classified without out a check under undertaking carrying subheading 73.15 B I (b) 1 (aa), which is free from duty.

Since a subsequent examination showed that the goods contained in addition

to approximately 30 % of tungsten more than 10 % of cobalt the customs

office adopted a decision of amendment whereby the goods were classified as 'ferro-alloys'

under tariff heading 73.02 G, bearing a duty of 7 %, and

consequently claimed the customs duty appropriate to that classification.

process of melting together waste and scrap, is not very constant in its composition and the presence of cobalt in excess of the limit of 10 % in the

consignment of goods whose tariff classification is in dispute thus constitutes

a purely fortuitous circumstance.

The defendant customs office invokes in its defence of the contested decision Note 1 (c) to Chapter 73 of the Common Customs Tariff, from which it

JUDGMENT OF 16. 12. 1976 - CASE 38/76

follows that the presence of cobalt in excess of the limit of 10 % in the

In order to settle this problem of interpretation the Finanzgericht submitted

the following question:

'Is the Common Customs Tariff to be interpreted to the effect that the "ferro-alloys"

expression within the meaning of heading 73.02 read together

with Note 1 (c) to Chapter 73 only means those products which were

manufactured as such from new metals or ores and which are distinguished

subheading G, entitled 'others'.

In the notes to Chapter 73, which have the same legal weight as the headings 'ferro-alloys'

of the Tariff, the concept of is defined in Note 1 (c) as follows:

'Alloys of iron ... which are not usefully malleable and are commonly used as raw material in the manufacture of ferrous metals and which contain, by weight, separately or together:

more than 8 % of silicon, or

more than 30 % of manganese, or

heading 73.02 that 'iron and steel waste, re-melted and roughly cast into ingots (waste or scrap in ingot form) having the composition of a ferro-alloy and used as addition materials in the manufacture of special steels shall be 73.02.'

classified as appropriate under the various subheadings of heading

In the explanations to heading 73.03, relating to waste and scrap metal of iron or steel, the Notes state that waste and scrap metal, re-melted and simply cast into ingots and known as 'waste or scrap in ingot form', shall be considered for the purposes of the Tariff as ferro-alloys or as ingots and thus classified

'according its heading 73.02 composition'

to under the various subheadings of

or of headings 73.06 or 73.15.

non-ferrous metals in proportions exceeding those laid down by the note.

In particular, the presence of proportions of alloy elements other than those

expressly (silicon, manganese, mentioned chromium and tungsten) in excess

of 10 % by weight require a product, such as that in dispute, to be classified amongst the ferro-alloys of heading 73.02.

Explicatives'

Fully in accord with this concept, the 'Notes of the Commission, 'composition'

JUDGMENT OF 16. 12. 1976 - CASE 38/76

7 Whilst the Customs Tariff does indeed in certain cases contain references to

manufacturing processes and to the use for which goods are intended it is

generally preferred, in the interests of legal certainty and ease of verification, to employ criteria for classification based on the objective characteristics and

properties of products which can be ascertained when customs clearance is obtained.

The criterion drawn from the content of non-ferrous metals in iron and steel

falling within any heading of the Tariff.

8 The reply to the question submitted must therefore be that heading 73.02 of 'lumps'

the Common Customs Tariff includes of melted ferrous scrap which

satisfy the physical requirements laid down in Note 1 (c) to Chapter 73.

Costs

9 The costs incurred by the Commission of the European Communities which

in answer to the question submitted to it by the Finanzgericht Düsseldorf by an order of 9 April 1976, hereby rules:

LUMA v HAUPTZOLLAMT DUISBURG

Heading 73.02 of the Common Customs Tariff also includes melted down scrap (material for re-melting) which satisfies the physical requirements laid down in Note 1 (c) to Chapter 73 of

the Common Customs Tariff.

Pescatore Mackenzie Stuart Touffait

Delivered in open court in Luxembourg on 16 December 1976.

to the Court in these proceedings melted and cast in the form of

concerns the interpretation of the (notched plates): the Committee 'ferro-alloys'- in the opinion that since no expression contained expressed

heading 73.02 of the Common Customs heading of the Tariff expressly covered

Tariff. The Finanzgericht Düsseldorf this product it must be treated as

requests the Court to define the scope of equivalent to 'waste or scrap in ingot form'

that expression so that it can settle a and accordingly classified under

German customs authorities.

cast in the form of slabs (known as However, on 23 March 1972 the said

'lumps'). On 20 October 1970 the company imported a consignment of

Committee on Common Customs Tariff lumps of melted scrap containing Nomenclature (established by Regulation between 30 and 33 % of tungsten and No 97/69 of the Council of 16 January more than 10 % of cobalt. In view of this

1 — Translated from the Italian.