C-69/76

JUDGMENT OF THE COURT 15 FEBRUARY 1977 1

Firma Rolf H. Dittmeyer v Hauptzollamt Hamburg-Waltershof (preliminary ruling requested by the Bundesfinanzhof)

'Orange skin and pith'

Joined Cases 69 and 70/76

1. Common Customs Tariff — Classification of goods — Interpretation — Committee on Common Customs Tariff Nomenclature — Opinion — Authority — Limits

2. Common Customs Tariff — Classification of goods — Pieces of fruit — Absence of essential constituents of the natural product — Classification under tariff heading 23.06

and

HAUPTZOLLAMT HAMBURG-WALTERSHOF

on the interpretation of tariff headings 08.10, 20.06 and 23.06 of the Common Customs Tariff, Regulation (EEC) No 950/68 of the Council of 28 June 1968 (OJ L 172 of 22.7.1968, p. 1) as last amended by Regulation No 2723/76 of the Council of 8 November 1976 (OJ L 314 of 15. 11. 1976, p. 1),

THE COURT

composed of: H. Kutscher, President, A. M. Donner and P. Pescatore, Presidents of Chambers, M. Sørensen, Lord Mackenzie Stuart, A. O'Keeffe and G. Bosco, Judges,

Advocate-General: J.-P. Warner Registrar: A. Van Houtte

After an examination by a Zoll- up or extracting the juice from it by technische Prüfungs- und Lehranstalt suction. Basically the residue consists of (Customs Technical Testing and the cell tissue of the pulp and also to a Research Institute) had shown that it was lesser degree of the pith (albedo). These a pulp produced from oranges, the are residues which have initially fallen customs authorities amended the tariff into the juice during pressing and which classification bringing the product in must be strained off. In most cases the question, in accordance with the method portion to be strained off is pressed again whereby it was preserved and packed, in an extractor in order to extract what under one or other of the two headings remains of the juice. In order to increase of the Common Customs Tariff provided extraction some undertakings mix water for fruit: into the residue from pressing again 08.10 ‘Fruit (whether or not cooked), before the second pressing. The residue preserved by freezing, not thus extracted or pressed has largely lost containing added sugar’ its juice and flavour and has mostly been 20.06 'Fruit otherwise prepared or destroyed so that it meets the criterion preserved, whether or not of 'waste from the food industry'. containing added sugar or spirit'. Nevertheless the residues are also used in part as animal food as is laid down under In the proceedings which it initiated heading 23.06. As is the case with the against the amendment notice the plaintiff, only a very insignificant plaintiff in the main action claimed that proportion of the residue from pressing it was impossible to consider the is used to improve the appearance of the products in dispute as fruit within the juices. This exception cannot affect the meaning of the abovementioned tariff basic classification of residue from headings since they did not contain any pressing as waste from the food industry of the essential elements of natural fruit. or as prepared animal fodder. This Thus the product contained no elements follows from the fact that tariff of the outer peel, and the juice of the classification is based solely on the fruit, which is of decisive importance for normal use of a product and not on how human consumption, was almost it is used in a few isolated and atypical completely extracted. cases.

must tariff heading 23.06 of the Common Customs Tariff be With regard to the interpretation of tariff interpreted to mean that the headings 08.10 and 20.06, the Com­ above-described product can be mission states that, apart from tariff included under this tariff heading headings 08.13 and 20.04, Chapter 8 and even if in both general and particular Chapter 20 of the Common Customs cases it is not used for animal food? Tariff do not contain tariff specifications III. If questions I and II are answered in relating to parts of fruit. The the negative, nomenclature is indeed founded on the can the product be brought under principle that a fruit, with all its parts, one of the two said tariff headings must be classified under the tariff through the application of No 5 (now heading for the form in which it appears 4) of the General Rules for the and that the separate parts of this fruit Interpretation of the Nomenclature also remain under the tariff heading of the Common Customs Tariff? appropriate to the whole fruit in so far as, viewed separately, they do not display the The orders for reference were entered in particular characteristics specified in the the Court Register on 19 July 1976. description of a product referred to in another tariff heading. By an order of 15 September 1976 the The Commission refers to the Court decided to join the present cases for the purposes of the written and oral Explanatory Notes to the Brussels procedure. Nomenclature which, under the heading 'General' in Chapter 8, state: 'Fruit of this Chapter may be whole, sliced, In accordance with Article 20 of the chopped, stoned, pulped, grated, peeled Protocol on the Statute of the Court of or shelled' and under the heading Justice of the EEC written observations 'General' in Chapter 20: The fruit, were lodged by the Commission of the vegetables and other plants or parts of European Communities, represented by plants classified in the present Chapter its Legal Adviser Peter Kalbe, acting as may be whole, in pieces or in pulp'. Agent. With regard to heading 20.06 the Explanatory Notes state: This heading Having heard the report of the covers fruit (whether whole, in pieces or Judge-Rapporteur and the views of the crushed) ... Advocate-General, the Court decided to open the oral procedure without any According to the Customs Cooperation preparatory inquiry. Council this rule applies not only to the parts which, as segments, still contain all the essential components of the whole The plaintiff in the main action was fruit, but also to the separate elements of nevertheless requested to produce at the the fruit as such. hearing a sample of the disputed product in the packing in which it was produced The classification opinions of the to the customs authorities. Customs Co-operation Council adopt a

The practices regarding classification Nevertheless in this case the product in followed by the Commission and the dispute cannot be classified under tariff Committee on Common Customs Tariff heading 23.06 for the following reasons: Nomenclature are fully in accord with the object and the basis of all one another. In particular the classifications are the type, the nature, classification slip of 7 May 1971 the qualities and the characteristics of expressly placed parts of oranges of the the imported product at the date on type in dispute under tariff headings which it is declared on importation. In so 08.10 or 20.06 (see Annex III to the far as the wording of the Common observations of the Commission). Customs Tariff does not prescribe other requirements the previous characteristics With regard to the interpretation of tariff and possible subsequent uses of the heading 23.06 the Commission observes product are irrelevant. that most of the products referred to in Chapter 23, residue and waste from the Accordingly one must consider in terms food industry and prepared animal food, of the wording of tariff heading 23.06 not have a common and almost exclusive the parts of oranges obtained by straining use: they are employed alone or mixed the juice, in their original state or as with other materials in the manufacture components of the juice which has been of animal fodder. (Cf. the Explanatory subsequently reconstituted, but only the Notes to the Brussels Nomenclature product into which these parts have been under the heading 'General' in Chapter processed for a use clearly specified by 23). the plaintiff and which is all that the plaintiff has imported. This product does In the first paragraph of the Explanatory not constitute animal fodder but a Notes to heading 23.06 it is stated: foodstuff which has been manufactured 'Provided that they are not included in under specific hygienic conditions and in any other more specific heading of the accordance with legislation in force with Nomenclature and are of a kind used for regard to foodstuffs with the sole aim animal food, this heading covers of meeting certain requirements for vegetable products, vegetable waste, and foodstuffs and which has its own residues and by-products from the importance and value in economic terms. industrial processing of vegetable Moreover it has been frozen or materials in order to extract some of pasteurized and tinned and thus prepared their constituents'. and preserved at a certain cost in order to be able subsequently to be put to a Amongst the products 'der als Futter specific use in the beverage industry. verwendeten Art' 1 (of a kind used for animal food) must be included goods which, in accordance with the criteria of The Commission reaches the following conclusions as to the classification of the a logical system, may be considered as 'zum Füttern geeignet' 1 (suitable for products in dispute in the present case: feeding animals) whether in isolated The concept of 'fruit' referred to in tariff 1 — Translator's Note: In the English versions of the headings 08.10 and 20.06 covers whole Common Customs Tariff and the Explanatory Notes both these phrases are translated as ‘of a kind used for fruit as well as pieces of fruit and thus animal food’. their various constituents.

The parts of oranges in dispute in the This conclusion also applies to the present case must be classified under present case: the product in dispute must be accorded different treatment and a heading 08.10 if they are frozen and under heading 20.06 if they have been lower rate than the specific parts of fruit. pasteurized and tinned even if they contain almost no pulp or fruit juice and Finally the plaintiff in the main action instead consist largely of pith and albedo. emphasized that, according to the second paragraph Point (5) of the Explanatory This finding follows from the objective Notes to the Brussels Nomenclature on interpretation of the wording of the tariff heading 23.06, waste of fruit (peel and headings and is not based upon No. 4 of cores of apples, pears, etc.) and fruit the General Rules of Interpretation. pomace or marc from the pressing of fruit constitute products of a kind used for animal food. In this case the relevant Ill — Oral procedure substance resembles marc because the specific constituents of the fruit are no The plaintiff in the main action, longer or scarcely present. Accordingly it represented by Mr Irrgang, and the must, like marc, be classified under tariff Commission of the European Com­ heading 23.06. munities, represented by its Legal Adviser Peter Kalbe, presented oral The Advocate-General delivered his argument at the hearing on 8 December opinion at the hearing on 19 January 1976. 1977.

Law

1 By two orders of 1 June 1976 received at the Court Registry on 19 July 1976 the Bundesfinanzhof submitted to the Court of Justice pursuant to Article 177 two series of three parallel questions relating to the customs classification of a product, in one case pasteurized and in the other frozen, which is 'obtained in the course of manufacturing fruit juice and consists of pieces of fruit which fall into the juice during pressing and are subsequently strained off’.

3 The file indicates that products such as those referred to by the questions form the subject-matter of an opinion of the Committee on Common Customs Tariff Nomenclature established by Regulation (EEC) No 97/69 of the Council of 16 January 1969 on measures to be taken for uniform application of the nomenclature of the Common Customs Tariff (OJ English Special Edition 1969 (I), p. 12). This opinion, called a 'classification slip', relates to products described as 'Products termed 'orange cells', in the form of a thick fruit puree, uncooked, yellowish, with a neutral or very slightly bitter taste similar to that of an orange, not containing added sugar; the products are obtained after filtering orange juice containing flesh of the fruit and include a certain amount of more or less finely crushed peel, mainly from the inner white part. They are intended to be added to diluted concentrates of orange juice and to soft drinks'. The opinion, which states that 'these products fall under subheading 20.06 B II when pasteurized and under subheading 08.10 B when frozen', is based upon the fact 'that the products in question consist in fact solely in parts of the fruit properly so-called, that is the flesh of the fruit, the cell membrane and a certain quantity of the peel, mainly from the inner white part'. According to the opinion, 'these products cannot be classified under heading 23.06 mainly because, having regard to the method by which they are produced and the way in which they are preserved, they do not constitute a residue within the meaning of that heading'.

5 The actual wording of Chapters 8 and 20 of the tariff covers not only whole products but also fruit which is sliced, chopped, stoned, pulped, grated, peeled or shelled. Chapter 8 also refers to the peel of citrus fruit and of melons whilst several subheadings of Chapter 20 refer expressly or by implication to peel. Nevertheless in all those cases the products referred to may still be identified by their characteristics and their form as coming under fruit and they constitute parts of fruit in demand as fresh or prepared fruit. The concept of fruit cannot be extended so as to describe as fruit products lacking the essential constituents of the natural product. Accordingly, products such as those described by the national court which are residues from pressing and consist only in the cell membrane of the flesh of the fruit and part of the white inner skin, that is to say, in parts of the fruit generally accepted as non-essential, cannot be classified as fruit within the meaning of Chapters 8 and 20 since every fruit consists at least in the outer skin and the flesh.

8 Consequently the reply to the questions submitted must be that heading 23.06 of the Common Customs Tariff must be interpreted to mean that it may include products consisting of parts of fruit, which however are almost entirely lacking in any of those features which determine the nature of fruit, in particular products consisting of parts of oranges which initially entered the juice in the course of pressing the oranges and which have subsequently been strained off even if they contain scarcely any constituent parts of the flesh of the fruit or fruit juice and instead consist principally of cell membrane and albedo.

Costs

9 The costs incurred by the Commission of the European Communities which 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 national court, costs are a matter for that court.

On those grounds,

THE COURT

in answer to the questions submitted to it by the Bundesfinanzhof by orders of 1 June 1976, hereby rules:

A. Van Houtte H. Kutscher

Registrar President

OPINION OF MR ADVOCATE-GENERAL WARNER

DELIVERED ON 19 JANUARY 1977

My Lords, The appellant is, as I understand, a manufacturer of fruit juice, and in These two cases come to the Court by particular of citrus fruit juices. For the way of references for preliminary rulings purpose of its business it imports from by the Bundesfinanzhof. The parties are countries such as Morocco and Brazil the same in both of them: the appellant locally manufactured citrus fruit juice is the Firma Rolf H. Dittmeyer, of concentrates. But it also imports from Hamburg, and the respondent is the them the product that is in question in Hauptzollamt Hamburg-Waltershof. these cases, which is, if I may use the expression without seeming to pre-judge In each case the question that the any issue, a by-product of the Bundesfinanzhof has to decide is as to manufacture of those concentrates. the classification under the Common Customs Tariff of a product imported by It seems that, at the first stage in that the appellant. That product is essentially process of manufacture, the juice is the same in the two cases. The difference extracted from the fruit, either by is that in the first case it was imported pressing or by suction, in such a way that pasteurized whereas in the second it was there are inevitably to be found in it imported frozen, the fact being of course some solid particles from the fruit. These that it is a product of a kind such that, particles are strained off and subjected to unless it is subjected to some preserving a further pressing so as to extract the last treatment, it deteriorates. of the juice from them. What then