C-87/79

HAUPTZOLLAMT BERLIN-PACKHOF ( 8 7 / 7 9 ) ,

EINKAUFSGESELLSCHAFT DER D E U T S C H E N KONSERVENINDUSTRIE M B H , Berlin

and

HAUPTZOLLAMT HAMBURG-WALTERSHOF ( 1 1 2 / 7 9 ) ,

EINKAUFSGESELLSCHAFT DER D E U T S C H E N KONSERVENINDUSTRIE M B H , Berlin

and

gives the following

JUDGMENT

Facts and Issues

I — Facts and p r o c e d u r e (e) Other fruits :

1. Tariff headings 08.11 and 20.06 of the Common Customs Tariff (CCT) 2. Other." read as follows: Article 1 of Regulation (EEC) No "08.11 Fruit provisionally preserved (for 1709/74 of the Commission of 2 July example, by sulphur dioxide gas, 1974 relating to the classification of in brine, in sulphur water or in goods under subheading 20.06 B I of the other preservative solutions), but CCT (Official Journal No L 180, p. 15), unsuitable in that state for provides : immediate consumption: "Cherries put up in a mixture of water and ethyl alcohol shall be classified as fruit suitable for immediate consumption E. Other." in the following subheading of the Common Customs Tariff: 20.06 Fruit otherwise prepared or "20.06 Fruit otherwise prepared or preserved, whether or not preserved, whether or not containing added sugar or spirit: containing added sugar or spirit: B. Other: I. Containing added spirit." B. Other: 2. The firm Bagusat KG, the plaintiff in I. Containing added spirit: the main action in Case 87/79, imports cherries from Yugoslavia for use in the chocolate industry. On 9 September 1974

JUDGMENT OF 20. 3. 1980 — JOINED CASES 87, 112 AND 113/79

In pursuance of Article 1 of Regulation N o 1709/74, referred to above, the Hauptzollamt [Principal Customs Office] took a different view, holding that tariff subheading 20.06 B I (e) 2 of the CCT The Bundesfinanzhof thought that the was to be applied and by communication proposal by the appellant in the main of 11 September 1974 requested payment action to refer another request to the of the appropriate duty. Court for a preliminary ruling was justified as the preliminary ruling given in Case 37/75 had not cleared the Pursuant to a request for a preliminary doubts that had arisen from examination ruling received from the Finanzgericht of the case in point. The Bundes- [Finance Court] Berlin, before which the finanzhof assumes that owing to the case had been brought, the Court of extent to which the Court was required Justice gave the following ruling in its to go into the matter, it had perhaps judgment of 11 November 1975 (Case been influenced by the formulation of 37/75 [1975] ECR 1339): the questions adopted by the Finanz- gericht. The latter court had asked " 1 . An examination of the question whether "cherries put up in a mixture of raised has not disclosed any factor water and ethyl alcohol" should be such as to affect the validity of classified under tariff heading 08.11 or Regulation (EEC) No 1709/74 of under tariff subheading 20.06 B I of the the Commission; CCT, and whether Regulation No 1709/74 was valid inasmuch as it classified "certain products" under tariff 2. Under Regulation (EEC) No subheading 20.06 B I of the CCT while 1709/74 of the Commission, cherries in reality there was no reason to put up in a mixture of water and ascertain whether cherries put up "in a ethyl alcohol must be classified mixture of water and ethyl alcohol" (of under subheading 20.06 B I of the whatever concentration) came under Common Customs Tariff." tariff subheading 20.06 B I and whether Regulation N o 1709/74 consequently represented a lawful interpretation of the Following that judgment the Finanz- C C T ; the Court should have said gericht Berlin rejected the main action by whether the cherries, as precisely judgment of 27 February 1976. described above, provisionally preserved

— In Case 37/75 flavouring had been By order of 24 April 1979 the Bun- added to the cherries. That is the desfinanzhof stayed the proceedings and reason why the question of the asked the Court the following question: goods' suitability for consumption had not been settled one way or the "Must tariff subheading 20.06 B I of the other; Common Customs Tariff be interpreted as meaning that it also includes fruit — This time the appellant has provided which has been put up in a mixture of an expert's report based on a rep- alcohol, flavouring and water containing resentative consumer test which 12% alcohol by weight (in the pro- confirms "that the cherries imported portion of 7 0 % fruit, 30% liquid) so as by it were unsuitable in that «tate for to preserve it during transportation in immediate consumption and were casks and which is intended for the therefore unsuitable for immediate chocolate industry?" use";

— Also, the goods had been put up in alcohol which, "according to the 3. The Einkaufsgesellscha.fi der German provisions, was impure"; this Deutschen Konservenindustrie mbH, the also affected their suitability for plaintiff in the main action in Cases 112 immediate consumption. and 113/79, released a consignment of cherries into free circulation through the German customs office in November By separate orders of 26 June 1979, the 1974 (Case 112/79) and in September Bundesfinanzhof stayed the proceedings 1974 (Case 113/79). Those cherries were in the two cases and asked the Court the imported from Yugoslavia in casks and following questions: so as to preserve them during transpor- tation had been put up in a mixture of "Must tariff subheading 20.06 B I of the alcohol and water with an alcohol Common Customs Tariff be interpreted content of 15.9% by weight (Case as meaning that it also includes fruit

4. The order making the reference in II — W r i t t e n o b s e r v a t i o n s sub- Case 87/79 was received at the Court m i t t e d to t h e C o u r t Registry on 31 May 1979. The orders making the references in Cases 112 and 113/79 were received at the Registry on 25 July 1979. A — According to Bagusat, the appellant in the main action in Case 87/79, the judgment given by the Court Written observations have been of Justice in Case 37/75 does not submitted under Article 20 of the contain any answer to the question asked Protocol on the Statute of the Court of by the Bundesfinanzhof. It claims that Justice of the EEC by Bagusat KG, the Court did not in fact formulate any represented by D. Ehle and V. view regarding the words "provisionally Feldmann, of the Cologne Bar, by the preserved" (heading 08.11) and "other- Einkaufsgesellschaft der Deutschen wise prepared or preserved" (heading Konservenindustrie, represented by F. 20.06). The present request for a pre- Modest and Associates, of the Hamburg liminary ruling is solely concerned with Bar, and by the Commission of the defining the classification criteria for European Communities, represented by subheading 20.06 B I and heading 08.11. its Legal Adviser, R. Wägenbaur. The question of the validity of Regu- lation No 1709/74 is not relevant for the purposes of the present proceedings. By order of the Court of 12 September 1979, Cases 112 and 113/79 were joined for the purposes of procedure and Bagusat maintains that the method of judgment. By order of the Court of preservation is the essential classification 19 September 1979 Case 87/79 was criterion for defining the scope of assigned to the Second Chamber. In headings 20.06 and 08.11. This is clearly accordance with the transitional rules the effect of Note 1 (a) to Chapter 20 of relating to the assignment of cases to the C C T which states that "this chapter Chambers adopted by the Court in its does not cover: . . . fruit, prepared or meeting of 9 October 1979, Case 87/79 preserved by the processes specified in was assigned to the Third Chamber. By Chapters 7 and 8". Edible fruits "pro- order of the Court of 21 November visionally preserved" come under

The product added to the cherries in question was not a "spirit" in the sense "Cherries which are put up in a mixture of subheading 20.06 B I but a mixture of of water and ethyl alcohol containing water and ethyl alcohol intended to keep 12% alcohol by weight (70% fruit, 30% the goods preserved provisionally and to liquid) so as to preserve them during prevent them from becoming compressed transportation in casks and which are or crushed in transport. intended for use in the chocolate industry, come under heading 08.11 of the Common Customs Tariff'. The words "unsuitable in that state for immediate consumption", which only appear in heading 08.11, constitute a B — The appellant in the main action in secondary descriptive criterion in relation Cases 112 and 113/79 points out that to the words "provisional preservation". until Regulation No 1709/74 entered The interpretation given by the into force, the cherries in question were Commission to the concept of suitability classified under heading 08.11 in for consumption in Regulation No accordance with the judgment of the 1709/74 is incompatible with the CCT. Bundesfinanzhof of 16 January 1973 According to Bagusat, that expression is referred to above. According to the intended to cover not only suitability for appellant, Regulation No 1709/74, being "eaten" ("Verzehr") but also the contrary to what the Court decided in property of the product, when eaten, to Case 37/75, is not valid. It could, create all those sensations connoted by however, be considered as valid if its "consumption" ("Genuß"). In this scope were limited to cherries put up in a respect the "Genußwert" (consumption solution of water and ethyl alcohol value) of a food product depends on a having an alcohol content higher than a host of factors (appearance, taste, smell, certain limit. This is what the appellant etc.) and is to be determined according will maintain. to sensorimetric methods. In the proceedings resolved by the Bun- desfinanzhof on 16 January 1973 (VII K 18/69) an expert's report signed by the The two criteria for tariff classification chemist, Mr Köberlein, was produced. It to be considered for the purposes of the

present case are, first, the concept of preservation, if not for a long period, "provisionally preserved" and, secondly, than at least for a fixed and determinable that of "unsuitable in that state for period. The "Explanatory Notes" immediate consumption". relating to heading 20.06 show that products under that heading are As regards the first criterion, it appears generally marketed in boxes, jars or from the "Explanatory Notes" that sealed receptacles and so on. In order to heading 08.11 encompasses fruit which be valid, Regulation No 1709/74 should has been treated for the sole purpose of be interpreted in a very precise sense, as provisional preservation during transpor- follows: tation and storage before it is put to its final use. Such is the case for the fruit which is the subject of the dispute in the "Cherries put up in a mixture of water main action. and ethyl alcohol come under tariff heading 20.06 in accordance with Regu- As regards the second criterion, the lation No 1709/74 of the Commission if, appellant is at pains to demonstrate that first, the treatment to which the cherries the interpretation which the Commission have been subjected prior to immersion defended in its statement of case in Case in the alcohol mixture and, second, the 37/75 is erroneous. The appellant claims alcohol content thereof, are adequate to that that interpretation is contrary to : preserve those fruit for a period which is more than provisional, in other words, for a limited period at least. That period (a) The general acceptation of the words must be longer than "merely provisional" used: the Commission has confused and it must be capable of being the concepts of "inedible" and determined, that is, be of ascertainable "consumption". Fruits "unsuitable in duration. that state for immediate consump- tion" are those which are not plea- surable to eat if they have not been processed; The alcohol content of the mixture in which the cherries are put up must therefore have sufficient strength to (b) The "Explanatory Notes", according ensure this. The added alcohol must to which fruit used as raw material in therefore attain a percentage of at least various food industries must be 25 to 30% by volume — unless sugar is classified under heading 08.11; added — as is shown by other fruits in alcohol found on the market, such as (c) The spirit and the objective of the cherries in rum. C C T : the considerable difference between the duty applicable under heading 08.11 (11%) and under The cherries must furthermore be treated heading 20.06 (32%) may be in a manner to enable them to be explained by the desire to protect the marketed without any further treatment national' industry; that is why semi- except packaging or repackaging". finished products still needing to undergo final processing in the EEC attract a lower rate of duty. The appellant has produced several experts' reports in support of its According to the appellant tariff heading argument and invites the Court to obtain 20.06 applies only to fruits requiring its own expert's report.

At the sitting held on 17 January 1980 As regards Cases 112 and 113/79, the the appellant in the main action in Case Commission wishes firmly to refute the 87/79, represented by Mr Ehle, the argument that the dispute in the main appellant in the main action in Cases 112 action is to be distinguished from Case and 113/79, represented by Mr Festge, 37/75: and the Commission, represented by Mr Wägenbaur, presented oral argument.

(1) The opinion polls taken on the The Advocate General delivered his "edibility" of the goods are not an opinion at the sitting on 14 February acceptable means of interpreting the 1980.

JUDGMENT OF 20. 3. 1980 — JOINED CASES 87, 112 AND 113/79

Decision

1 By three separate orders of 24 April and 26 June 1979 received at the Court on 31 May and 25 July 1979, the Bundesfinanzhof referred questions to the Court under Article 177 of the EEC Treaty for a preliminary ruling upon the interpretation of subheading 20.06 B I of the Common Customs Tariff.

2 These questions are referred to the Court in the context of three disputes between two undertakings, Bagusat KG (Case 87/79) and Einkaufs- gesellschaft der Deutschen Konservenindustrie mbH (Cases 112 and 113/79) and the German customs administration on whether cherries immersed in a mixture of water and alcohol in order to preserve them provisionally during transport to the Community and until the time they are used, after draining, in the chocolate industry in the Community, are to be classified under tariff subheading 20.06 B I.

4 The main action in Case 87/79 has already been the subject-matter of a judgment of the Court under article 177: the judgment of 11 November 1975

BAGUSAT v HAUPTZOLLAMT BERLIN-PACKHOF

in Case 37/75, Bagusat v Hauptzollamt Berlin-Packhof, [1975] ECR 1339, delivered following a request for a preliminary ruling by the Finanzgericht [Finance Court] Berlin.

s In that judgment the Court held that Regulation N o 1709/74 was valid and consequently ruled that under that regulation cherries put up in a mixture of water and ethyl alcohol must be classified under subheading 20.06 B I of the Common Customs Tariff.

6 Following that judgment the Finanzgericht Berlin dismissed the action brought by Bagusat against the classification decision of the customs auth- orities. Bagusat argued before the Bundesfinanzhof, to which it had appealed on a point of law, that the preliminary ruling delivered by the Court in Case 37/75 had not removed all the doubt about the application of subheading 20.06 B I to the disputed imports and consequently requested that a fresh request for a preliminary ruling be addressed to the Court. The Bundes- finanzhof subsequently referred to the Court the following question in Case 87/79:

"Must tariff subheading 20.06 B I of the Common Customs Tariff be interpreted as meaning that it also includes fruit which has been put up in a mixture of alcohol, flavouring and water containing 12% alcohol by weight, in proportion of 70% fruit, 30% liquid, so as to preserve it during transpor- tation in casks and which is intended for the chocolate industry?"

alcohol whose alcoholic strength is barely sufficient to ensure their pro- visional preservation. However that interpretation cannot be reconciled with the general words used by Article 1 of Regulation No 1709/74 which classifies under heading 20.06 B I "cherries put up in a mixture of water and ethyl alcohol", without making any distinction as to the alcoholic strength of the mixture. Furthermore it follows from the statement of the grounds on which the regulation is based and in particular from the third and sixth recitals in the preamble thereto that the authors intended precisely to classify under subheading 20.06 B I "cherries which are provisionally preserved in a mixture of water and ethyl alcohol for use, inter alia, in the manufacture of chocolate products". It therefore follows that goods having the charac- teristics referred to by the court making the reference must, by virtue of Article 1 of Regulation No 1709/74, be classified under subheading 20.06 B I.

9 The question remains whether, as the appellants in the main actions contend, in making provision for this classification, Regulation N o 1709/74 is incompatible with the Common Customs Tariff and is therefore invalid.

io It should first of all be called to mind that in its Regulation N o 97/69 on measures to be taken for the application of the customs tariff (Official Journal, English Special Edition, 1969 (I), p. 12) the Council conferred upon the Commission, acting in co-operation with the customs experts of the Member States, a wide power of discretion in defining the subject-matter of tariff headings coming into consideration for classification. The question which arises is therefore whether Regulation No 1709/74 has exceeded the limits imposed by the terms of the Common Customs Tariff.

is In fact, even though, as the applicants in the main action maintain with the assistance of experts' reports, the goods at issue are not, in the view of consumers at the present time, considered to be appetizing and though it is not usual to consume them as they are, that does not signify that they are thereby unsuitable for consumption as long as they may be consumed in that state without risk to health. It is true that the applicants in the main actions in Cases 112 and 113/79 argued that the degree of impurity of alcohol in which the goods they import are put up is higher than that accepted by German regulations on the subject; but none of the applicants went as far as to argue that the consumption in that state of the goods at issue, which are intended to be used in the food industry, represents a special risk to health. By providing that the goods referred to by the three questions of the Bun- desfinanzhof come under subheading 20.06 B I, the Commission has not therefore misinterpreted the provisions of the Common Customs Tariff, having particular regard to the wording of heading 08.11 in the different languages.

JUDGMENT OF 20. 3. 1980 — JOINED CASES 87, 112 AND 113/79

i6 The reply to the questions referred to the Court should therefore be that fruit put up in a mixture of water and alcohol, which is not unsuitable in that state for immediate consumption, must be classified under subheading 20.06 B I of the Common Customs Tariff. The proceedings in these cases have disclosed no factor of such a kind as to affect the validity of Regulation N o 1709/74 of the Commission, which makes provision for such a tariff classification of cherries put up in a mixture of water and ethyl alcohol as fruit suitable in that state for immediate consumption.

Kutscher Menens de Wilmars Mackenzie Stuart

Delivered in open court in Luxembourg on 20 March 1980.

For the Registrar

J. A. Pompe H. Kutscher Deputy Registrar President