C-137/78

JUDGMENT OF THE COURT (FIRST CHAMBER) OF 2 MAY 1979 <apnote>1</apnote>

Henningsen Food Inc. and Others v Produktschap voor Pluimvee en Eieren (preliminary ruling requested by the College van Beroep voor net Bedrijfsleven)

Case 137/78

1. Common Customs Tariff — Tariff headings — Eggs, not in shell, and egg yolks suitable for human consumption as in subheading 04.05 BI— Concept

2. Common Customs Tariff — Tariff headings — Food preparations under subheading 21.07 GI(a) 1 — Specific case

1. It is clear from the wording of sub­ 2. A product composed of 52% whole heading 04.05 B I of the Common hen-egg powder, 25% soya meal, Customs Tariff and from the Explana­ 22% glucose syrup and 1% salt and tory Notes to the tariff that the lecithin does not come under heading products to which the subheading 04.05 B I of the Common Customs refers are essentially birds' eggs, not Tariff but constitutes a "food in shell, and egg yolks, without preparation" coming under sub­ further processing, to which any heading 21.07 G I (a) 1 of the tariff. chemical components are added in small quantities only, in order to preserve them.

both in their capacity as managing partners of the partnership trading as Henningsen Van den Burg, Waalwijk,

on the one hand,

and

Produktschap voor PLUIMVEE en Eieren (Poultry and Eggs Board), Zeist, The Netherlands,

on the other,

on the interpretation of certain provisions of the Common Customs Tariff with regard to the tariff classification of products known as "Hentex 76" and "Hentex 10" and of certain provisions of Regulation (EEC) No 1380/75 of the Commission of 29 May 1975 laying down detailed rules for the application of monetary compensatory amounts,

The facts of the case, the course of the the marks "Hentex 76" and "Hentex procedure and the written observations 10" which it has exported for some two submitted pursuant to Article 20 of the years to the United Kingdom and to Protocol on the Statute of the Court of which it refers in its export declarations Justice of the EEC may be summarized as "whole hen-egg powder" stating the as follows: tariff heading as 04.05 BI of the Common Customs Tariff.

I — Facts and written procedure The Produktschap voor Pluimvee en Eieren (hereinafter referred to as "the 1. The undertaking Henningsen Van Produktschap") has always paid in den Burg manufactures products bearing respect of those exports the monetary

HENNINGSEN FOOD v PRODUKTSCHAP VOOR PLUIMVEE EN EIEREN

The above-mentioned Article 2 a of This proof shall be furnished by Regulation No 974/71 reads as follows: production of the control copy "Where a product exported from one provided for in Article 1 of Regu­ Member State has been imported into a lation (EEC) No 2315/69. <apnote>1/ In the Member State which has to grant a additional information section, the compensatory amount upon importation, following shall be completed: the exporting Member State may, by agreement with the importing Member 1. Sections 101 and 103; State, pay the compensatory amount which should be granted by the said '2. Section 104 by deleting what importing Member State. In this case no does not apply and adding one compensatory amount shall be granted of the following: by the importing Member State for products originating in the Member State — 'Intended for entry for home concerned. The compensatory amount shall be converted on the basis of the use (importing Member State)'; spot market rate of the relevant currencies as recorded over a period to — 'Destine a etre mis a la be determined. Exporting Member States which exercise this option shall inform consommation en/au(x) the Commission accordingly." (État membre importateur)';

Article 11 of Regulation No 1380/75, — 'Bestemt til forbrug i (den supplemented as regards paragraph (5) indførende medlemsstat)'; by Commission Regulation (EEC) No 1498/76 of 25 June 1976 (Official — 'Zum freien Verkehr in Journal 1976, L 167, p. 28) provides inter alia: (einfuhrender Mitgliedstaat) bestimmt'; "(1) Where an exporting Member State I — From I July 1977 Article I of Regulation No 2315/69 wishes to exercise the option has been replaced bv Article 10 of Regulation (EEC) provided for in Article 2a of Regu- No 223/77 (Official journal 1977, L 38, p. 20).

— 'Montant compensatoire mone­ taire applicable le (date de mise (5) Where the control copy referred to a la consommation) non octroye in paragraph (2) is not returned to en/au(x) (État Membre impor­ the office of departure or relevant tateur)'; central body within three months of its issue owing to circumstances — 'Monetaert udligningsbeløb, gael­ beyond the control of the person dende den (datoen for overgang concerned, the latter may make til forbrug) ikke ydet i (den application to the competent agency importerende medlemsstat)'; for other documents to be accepted as equivalent, stating the grounds — 'Wahrungsausgleichsbetrag, gül­ for such application and furnishing tig am (Tag der Uberfuhrung in supporting documents. Such sup­ den freien Verkehr) in porting documents shall include the (einführender Mitgliedstaat) transport document and the nicht gewahrt'; document whereby the product — 'Importo compensativo moneta­ concerned is entered with the rio applicabile il (data customs authorities for home use in d'immissione al consumo) non the Member State of destination or concesso in (Stato membro a copy or photocopy thereof importatore)'; certified by the competent auth­ orities. — 'Monetair compenserend bedrag von toepassing op (datum van invoer tot verbruik) niet In such a case the competent office of the Member State of destination toegekend in (invoerende Lid- Staat)'. shall, on the document whereby the product concerned is entered with (3) Where Article 3 of Regulation the customs authorities for home (EEC) No 974/71 is applied the use, include the same information Commission shall alter the as that specified in respect of the exchange rate to be used for the section or the control copy headed purpose of applying Article 2a of 'control as to use and/or that regulation. destination'. This endorsement shall

be authenticated by the stamp of The Produktschap, whilst reserving the the customs office placed directly right to inform the competent authorities on the supporting document. of its objections to that decision, refused Member States shall each 1 March to pay the compensatory amounts in and 1 September send returns to respect of the export to the United the Commission showing for each Kingdom of the products in question. product sector the number of applications made under the preceding subparagraph, the The persons concerned instituted reasons where known for the proceedings before the College van failure to return the control copy, Beroep voor het Bedrijfsleven against the quantities and the compensatory that refusal and the College decided, by amount claimed." a judgment of 9 June 1978, to stay the proceedings and to refer the following questions to the Court pursuant to Article 177 of the EEC Treaty: 2. With regard to the exportations concerned in this case the British customs authorities refused to accept "1. Is Article 1 (2) of Regulation (EEC) their tariff classification under heading No 974/71 of the Council, read in 04.05 B I given in the export forms and conjunction with the content of the classified the goods under tariff heading Annex to Council Regulation (EEC) 21.07 F subsequently renumbered in No 2500/77, in particular with the Council Regulation (EEC) No 2500/77 content of tariff subheadings of 7 November 1977 amending Regu­ 04.05 B I and 21.07 G I (a) 1 as set lation (EEC) No 950/68 on the Common Customs Tariff as tariff out in that annex, to be interpreted as meaning that a product such as heading 21.07 G. This heading does not 'Hentex' which is composed of: make provision for the application of monetary compensatory amounts to the 52% whole hen-egg powder products concerned. 25% soya meal 22% glucose syrup 1% salt and lecithin The British authorities accordingly must be classified under tariff sub­ refused to fill in with regard to the heading 04.05 B I or under tariff sub­ products in question the section in the heading 21.07 G I (a) 1? control copy certifying that those products had been "entered for home use". 2. Is the second sentence of Article 11 (2) of Regulation (EEC) No Through the Ministerie van Landbouw 138C/75 of the Commission to be en Visserij [Ministry for Agriculture and interpreted as meaning that, even if Fisheries], the Produktschap reported the the product 'Hentex' does fall under British customs authorities' decision on tariff subheading 04.05 B I and the the tariff classification to the competent customs import formalities for the officers of the Commission. In a telex United Kingdom have been received by the above-mentioned completed and the duties and Ministry the Produktschap was informed charges having equivalent effect that having regard to their composition, payable in that Member State have the products in question must be been levied but the control copy classified under tariff heading within the meaning of that provision 21.07 G (a) 1. has not been furnished by the United

Kingdom, on that ground alone the lation (EEC) No 2771/75 on the respondent is not empowered and a common organization of the market in fortiori is not obliged to grant and eggs (Official Journal 1975, L 282, p. 49) pay the monetary compensatory and monetary compensatory amounts are amount to the exporter/importer applicable to them. Even if this were not concerned?" so those definitions are not decisive in this case since the sphere of application of Regulation No 2771/75, as defined in 3. A copy of the judgment making the Article 2 (1), covers a number of reference was received at the Court on headings of the Common Customs Tariff 14 June 1978. including heading 04.05 B I. The applicants in the main action, represented by B. H. ter Kuile, the Neither the notes at the beginning of Government of the United Kingdom, Chapter 4 of the Common Customs represented by R. D. Munrow, Treasury Tariff nor those at the beginning of Solicitor's Office, and the Commission Chapter 21 refer to headings 04.05 B I or of the European Communities, 21.07 G I (a) 1. According to the general represented by its Legal Adviser, J. H. J. rules of classification for tariff purposes Bourgeois, submitted written obser­ the classification of products is decided vations pursuant to Article 20 of the principally on the basis of the wording of Protocol on the Statute of the Court of the headings and of the notes thereto Justice of the EEC. and, where there is doubt, in accordance with the criteria mentioned in Rules 2 (b) By an order of the Court of 3 November or 3 (a) and (b) of the General Rules for 1978 this case was assigned to the First the Interpretation of the Nomenclature Chamber in accordance with Article 95 of the Common Customs Tariff, in so far (1) of the Rules of Procedure. as they are not contrary to the above- mentioned wording or notes. Upon hearing the report of the Judge- Rapporteur and the views of the Advocate General the Court decided to Egg products, such as the Hentex open the oral procedure without any products, correspond directly to the preparatory inquiry. wording of heading 04.05 BI since it refers specifically to "Eggs, not in shell; egg yolks: … Dried …". Classification under heading 21.07, "Food preparations II — Written observations sub­ not elsewhere specified or included", is mitted pursuant to Article ruled out because of the subsidiary 20 of the Protocol on the nature of that heading. Statute of the Court of Justice of the EEC If any doubts are nevertheless harboured concerning the classification of the (1) The applicants in the main action products in question under heading submit in particular the following obser­ 04.05 BI they may be dispelled by vations: General Rule 2 (b) which, with regard to "mixtures", refers to the classification criteria set out in Rule 3 (a) and (b) (a) First question which state:

components, and goods put up and/or destination" in which the specific in sets, which cannot be information required must be inserted. classified by reference to 3 (a), shall be classified as if they In the present case the Produktschap consisted of the material or refused to pay the amounts in dispute on component which gives them the sole ground that the information their essential character, in so far required had not been expressly inserted as this criterion is applicable." in the appropriate section on the control copy. A control copy concerning 40 boxes of Hentex, produced as an annex Consequently the products in question to the written observations, and the must be classified under heading accompanying letter from the British 04.05 B I: customs authorities of 8 November 1977 show that: — First, because they correspond specifically to the description — The section "Control as to use contained in that heading and and/or destination" contains the because that heading can thus be hand-written statement: "Duty-free, considered as the "heading which levy exempt, satisfied", and a sump provides the most specific indicating "Exempt II, 02.11.77, description" within the meaning of Hull"; the above Rule 3 (a); — The accompanying letter from the — Secondly, because eggs are the British customs states that the goods component which gives them their were admitted for domestic essential character and heading consumption in the United Kingdom 04.05 B I is thus applicable to them under tariff heading 21.07 FI (a) 1 pursuant to the above-mentioned (now heading 21.07 G I (a) 1). Rule 3 (b).

grant and payment of such amounts, is This view is furthermore supported by bound to pay them. the Explanatory Notes of the Customs Co-operation Council on heading 21.07 Furthermore, it is to be observed that the which, in accordance with the judgment of the Court of 8 December 1970 in "proof in question does not depend on a check by means of a second sample Case 14/70 (Deutsche Bakels GmbH effected by the customs authorities of the [1970] ECR 1001) must be applied in importing State (the United Kingdom) interpreting the nomenclature of the with regard to the tariff classification Common Customs Tariff, in particular, where the tariff does not itself contain accepted by the customs authorities of the exporting State (the Netherlands). any explanatory note with regard to a The Produktschap cannot rely in the specific heading. present case on any evidence other than the control copy (cf. judgment of 22 The Explanatory Notes to the Customs October 1970, Craeynest, [1970] ECR Tariff of the European Communities do 912). not mention, with regard to the two sub­ headings in question, mixtures such as Henningsen accordingly suggests that the products at issue but the note to sub­ the reply to the questions submitted heading 04.05 B I states that that sub­ should be as it has suggested above in its heading applies to whole eggs or yolks observations. not in shell if they are preserved by the addition of small quantities of specified chemicals. It does not state that all

HENNINGSEN FOOD v PRODUKTSCHAP VOOR PLUIMVEE EN EIEREN

played by its various components having Secondly it is clear from the above- regard to that use and of the result of a mentioned Explanatory Notes that only chemical analysis of its content in certain components may be added, in sucrose and starch. accordance with their nature or function: such components must be for preserving the product.

With regard to the distinction between Having regard to those factors it is clear tariff headings 04.05 and 21.07 it may be that a product such as the one in inferred from the definition of the scope question, having regard to its of the latter heading provided by the composition, in particular its content in Explanatory Notes to the Nomenclature soya meal (25%), precludes its classi­ of the Customs Co-operation Council fication under subheading 04.05 B I. The and of the definition of subheading product is rather a "preparation" within 21.07 G I that the latter covers inter alia the meaning of the nomenclature of the Common Customs Tariff. However, it is food preparations which do not contain milk-fats at all or contain less than 5%. impossible to consider that "preparation" A mixture of whole hen-egg powder, as a "preparation of flour" within the soya meal, glucose syrup, salt and meaning of heading 19.02 since the lecithin would in fact result in a addition of 25% of soya meal does not preparation which might be described as give it the character essential for such a a "food preparation" within the meaning preparation: it is impossible to classify it of that tariff heading. otherwise than under heading 21.07 as a "Food preparation not elsewhere specified or included".

whether or not such amounts apply to a import (as defined in Article 8 (5)), given operation. the "payment" of which is conditional on the production of proof that customs formalities have been completed and that the duties That interpretation is confirmed not only by the wording of the relevant and charges having equivalent effect provisions, from which it is clear that a payable in the importing Member compensatory amount paid by the State have been charged (Article 10(2)). exporting Member State is that which must ("should") be paid by the importing Member State, but also by the system considered as a whole. The option made available by the above- mentioned Article 2 a — namely payment by the exporting Member State Regulation No 1112/73, which inserted of the compensatory amounts on import Article 2 a in its present form, into Regu­ — must and can be considered only in lation No 974/71, has in fact abolished the context of this system. That option in the granting of compensatory amounts no way constitutes a derogation from the by the exporting Member State alone, rules on the "determination" of the without affecting the rules on the compensatory amounts on import; it addition and deduction of the amounts, derogates from the rules on the and has returned to a system whereby "payment" of that amount only to each Member State charges and grants enable the exporting Member State to "its" compensatory amounts. make the payment. The provisions on proof remain the same under the general rules and the optional rules (cf. Article The formalities prescribed by Regulation 10 (2) and the first subparagraph of No 1380/75 were clearly envisaged with Article 11 (2)); only the manner in which a view to such a system. In transactions proof must be produced is altered such as the one in question there are (second subparagraph of Article 11 (2)). indubitably two distinct amounts, applied in accordance with separate provisions, namely: The procedure prescribed in Article 11(5) of Regulation No 1380/75, as inserted by Regulation No 1498/76, (i) A compensatory amount on export, does not apply to this case. It authorizes which is "determined" on the day of the replacement of a lost control copy export (as defined in Article 8 (2)) and was not intended to permit the the "payment" of which is exporting Member State to place itself in conditional upon the production of the position of the importing Member proof that the product in respect of States in completing the formalities pres­ which the customs export formalities cribed under the rules for the latter were completed has left the territory State.

Decision

1 The College van Beroep voor het Bedrijfsleven, in its judgment of 9 June 1978 which was received at the Court Registry on 14 June 1978, referred to the Court pursuant to Article 177 of the EEC Treaty, questions on the interpretation of certain provisions of the Common Customs Tariff and on Regulation (EEC) No 1380/75 of the Commission of 29 May 1975 (Official Journal 1975, L 139, p. 37) laying down detailed rules for the application of monetary compensatory amounts.

2 Those questions were raised in the context of a case concerning the application of Article 2 a of Regulation (EEC) No 974/71 of the Council of 12 May 1971 (Official Journal, English Special Edition 1971 (I), p. 257), as amended by Regulation No 1112/73 of the Council of 30 April 1973 (Official Journal 1973, L 114, p. 4). According to that provision, "where a product exported from one Member State has been imported into a Member State which has to grant a compensatory amount upon importation, the exporting Member State may, by agreement with the importing Member

JUDGMENT OF 2. 5. 1979 — CASE 137/78

State, pay the compensatory amount which should be granted by the said importing Member State".

5 In order to settle this dispute the College van Beroep voor het Bedrijfsleven has submitted the following questions to the Court:

HENNINGSEN FOOD v PRODUKTSCHAP VOOR PLUIMVEE EN EIEREN

"1. Is Article 1 (2) of Regulation (EEC) No 974/71 of the Council, read in conjunction with the content of the Annex to Council Regulation (EEC) No 2500/77, in particular with the content of tariff subheadings 04.05 B I and 21.07 G I (a) 1 as set out in that annex, to be interpreted as meaning that a product such as 'Hentex' which is composed of: 52% whole hen-egg powder 25% soya meal 22% glucose syrup 1 % salt and lecithin

must be classified under tariff subheading 04.05 B I or under tariff sub­ heading 21.07 G I (a) 1?

2. Is the second sentence of Article 11 (2) of Regulation (EEC) No 1380/75 of the Commission to be interpreted as meaning that, even if the product 'Hentex' does fall under tariff subheading 04.05 B I and the customs import formalities for the United Kingdom have been completed and the duties and charges having equivalent effect payable in that Member State have been levied but the control copy within the meaning of that provision has not been furnished by the United Kingdom, on that ground alone the respondent is not empowered and a fortiori is not obliged to grant and pay the monetary compensatory amount to the exporter/importer concerned?"

6 With regard to the first question subheading 04.05 B I refers to the products to which it applies as "Eggs, not in shell; Egg yolks … Suitable for human consumption". It is clear from the Explanatory Notes to the Customs Tariff of the European Communities that that subheading applies to such products "even if they have undergone a particular treatment with a view to removing pathogenic germs …" and to eggs, not in shell, and egg yolks "preserved by adding small quantities of chemicals …". It is clear from the wording of the said subheading and of the above-mentioned Explanatory Notes that the products to which the subheading refers are essentially birds' eggs, not in shell, and egg yolks, without further processing, to which any chemical components are added in small quantities only, in order to preserve them.

8 Although the product in question has a significant content of whole hen-egg powder it contains appreciable quantities of other components, in particular soya meal and glucose syrup which are not in the nature of chemical additives whose sole purpose is to preserve the product. Although the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff provide at 3 (b) that mixtures of products which are not referred to in a specific heading must be classified in accordance with the material which gives them their essential character the Explanatory Notes to the Brussels Nomenclature nevertheless state that that rule "can only take effect provided the terms of headings or Section or Chapter Notes do not otherwise require". In those circumstances, it is impossible to classify a commodity having the character of the product in question under "birds' eggs and egg yolks" within the meaning of subheading 04.05 B I. On the other hand that product displays the characteristics peculiar to a "food preparation within the meaning of the Common Customs Tariff". Since the product is not referred to in any heading of the Nomenclature or in any heading or subheading of Chapter 21 of the Tariff it may thus be considered as coming under the "Food preparations not elsewhere specified or included … Other" of subheading 21.07 G I (a) 1.

9 For those reasons the reply to the first question must be that a product composed of 52% whole hen-egg powder, 25% soya meal, 22% glucose syrup and 1% salt and lecithin does not come under heading 04.05 B I of the Common Customs Tariff but constitutes a "food preparation" coming under subheading 21.07 G I (a) 1 of the Tariff.

THE COURT (First Chamber),

in answer to the questions referred to it by the College van Beroep voor het Bedrijfsleven by a judgment of 9 June 1978, hereby rules:

A product composed of 52% whole hen-egg powder, 25% soya meal, 22% glucose syrup and 1% salt and lecithin does not come under

OPINION OF MR WARNER — CASE 137/78

heading 04.05 B I of the Common Customs Tariff but constitutes a "food preparation" coming under subheading 21.07 GI (a) 1 of the Tariff.

Mertens de Wilmars O'Keeffe Bosco