C-824/79

JUDGMENT OF T H E COURT (SECOND CHAMBER) OF 16 OCTOBER 1980 1

S.a.s. Prodotti Alimentari Folci v Amministrazione delle Finanze dello Stato (preliminary ruling requested by the Italian Corte Suprema di Cassazione)

"Common Customs Tariff — whole mushrooms"

Joined Cases 824 and 825/79

Common Customs Tariff— Scheme of generalized preferences in favour of developing countries — Cut mushrooms coming under sub-heading 07.04 B — Exclusion (Regulations Nos 3055/74 and 3011/75 of the Council, Annex A)

Tariff heading 07.04 "ex B. Other" set scheme of generalized preferences in out in Annex A to Regulations (EEC) favour of developing countries for the No 3055/74 and (EEC) No 3011/75 of years 1975 and 1976 must be interpreted the Council establishing in respect of as meaning that the reduced rate does certain products falling within Chapters not apply to cut or sliced mushrooms. 1 to 24 of the Common Customs Tariff a even if all the parts are present.

JUDGMENT OF 16. 10. 1980 — JOINED CASES 824 AND 825/79

Journal L 329, p. 114) and to Regulation (EEC) No 3011/75 of 17 November 1975 (Official Journal L 310, p. 114) establishing in respect of certain products falling within Chapters 1 to 24 of the Common Customs Tariff a scheme of generalized preferences in favour of developing countries,

T H E COURT (Second Chamber)

composed of: P. Pescatore, President of Chamber, A. Touffait and O. Due, Judges,

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

gives the following

The Corte d'Appello [Court of Appeal], of 24 November 1975, p. 1)) is Trieste, by two judgments delivered on concerned in both cases with 24 March 1977 and 23 February 1978 "Dried, dehydrated or evaporated upheld the view of the Amministrazione delle Finanze. vegetables, whole, cut sliced, broken or in powder, but not further prepared: Folci appealed to the Corte di A. Onions . . . Cassazione against those judgments on B. Others . . . the ground that the interpretation of the Common Customs Tariff put forward by The reduced rate of 10 %, laid down by the Amministrazione delle Finanze was Regulation (EEC) No 3055/74 of the wrong. Council (as amended by a Corrigendum published in Official Journal L 121 of 14 The Corte Suprema di Cassazione stayed May 1975, p. 24) and Regulation (EEC) the proceedings and referred the No 3011/75 of the Council of 17 following question to the Court in one November 1975 establishing in respect of of the appeals: certain products falling within Chapters 1 to 24 of the Common Customs Tariff a "Must tariff heading 07.04 ex B. Other: scheme of generalized preferences in Whole mushrooms, dried dehydrated or favour of developing countries applies, evaporated, excluding cultivated under tariff heading 07.04, to products mushrooms, referred to in Annex A to described in the French version as: Regulation (EEC) No 3055/74 of the "Légumes et plantes potagères desséchés, Council of 2 December 1974 and in déshydratés ou évaporés, même coupés Annex A to Regulation (EEC) No en morceaux ou en tranches ou bien 3011/75 of the Council of 17 November broyés ou pulvérisés, mais non autrement 1975 which lays down the rate of 10%, préparés : be understood as meaning that the above-mentioned reduced rate applies to ex B. autres: uncultivated mushrooms, dried, — Champignons entiers desséchés, dehydrated or evaporated, even if they déshydratés ou évaporés, à are cut or sliced (provided that all their l'exclusion des champignons de parts are present: stalks, caps etc.), or as couche meaning that it applies only to mushrooms which are not cut or sliced, ..." are dried, dehydrated or evaporated and The Danish, Dutch, German and Italian are uncultivated?" versions are worded respectively as follows : In the other appeal the same question has been referred to the Court but only "Grønsager, tørrede, også snittede, in relation to Regulation No 3011/75. knuste eller pulveriserede, men ikke yderligere tilberedte: ex B. Andre varer: B — Community rules — Svampe, hele, tørrede, undtagen 1. Tariff heading 07.04 of the Common dyrket champignon"; Customs Tariff (Annexes to Regulation "Groenten en moeskruiden, gedroogd, (EEC) No 2658/74 of the Council of 15 gedehydreerd of geëvaporeerd, ook October 1974 (Official Journal L 295 of indien in stukken of in schijven 1 November 1974, p. 1) and Regulation gesneden, dan wel fijngemaakt of in (EEC) No 3000/75 of the Council of 17 poedervorm, doch niet op andere wijze November 1975 (Official Journal L 304 bereid:

ex B. altri: C — The procedure before the Court — Funghi interi disseccati, disidratati o evaporati esclusi i funghi di In accordance with Article 20 of the coltivazione". Statute of the Court of Justice of the EEC written observations were submitted However, in the English version the by the plaintiff in the main action, reduced rate applies to : Prodotti Alimentari Folci S.a.s., represented by C. A. Pedroni of the Dried, dehydrated or evaporated Gorizia Bar, by the Italian Government, vegetables, whole, cut, sliced, broken or represented by O. Fiumara, Avvocato in powder but not further prepared : dello Stato, and by A. Squillante, head of the department in the Italian Foreign ex B. Other: Office dealing with litigation, treaties — Whole mushrooms, dried, and legislative matters, acting as Agent, dehydrated or evaporated, excluding and by the Commission, represented by cultivated mushrooms". A. Prozzillo, a member of its legal department, acting as Agent. It is common ground that in the case of the preferential system applicable for Upon hearing the report of the Judge- 1972, 1973, 1977, 1978, 1979 and 1980 Rapporteur and . the views of the tariff heading 07.04 reads as follows: Advocate General the Court decided to open the oral procedure whilst at the "ex B Other: same requesting the Commission to answer before the hearing the question — Mushrooms, excluding cultivated reproduced below in Section III. mushrooms", The Court by an order dated 16 January and that in the case of the system 1980 ordered that the two cases be dealt applicable for 1974, the year preceding with jointly.

II — Written observations 2. The Commission submits that the word "whole" must be given its ordinary meaning, namely "a single undivided piece"; it adduces as proof of this the 1. Folci submits that the wording in words used in the various language question must be given a reasonable and versions of the regulations: pragmatic interpretation. In its view it is common knowledge that almost all mushrooms originating in Yugoslavia "interi", "whole", "ganze", "entier", and other developing countries are boleti "hele", "gehele". and that boleti cannot be dried without having first been sliced. Since the It points out that the ordinary rate reduced rate of customs duty is designed applies to all vegetables, whole as well as to promote imports from developing cut or sliced, provided that they are countries it observes that there would be prepared in a given way, whereas the no point in adopting a preferential preferential tariff only applies to part of system which is illusory. tariff heading 07.04, excluding sub- heading A, subheading B being limited to On the basis of etymological research it mushrooms and horse-radish. It points considers that the concept of "whole" out that in the case of mushrooms there may be reconciled with that of "sliced" if is a further condition: they must be mushrooms all the parts of which are "whole". present and which have not therefore lost any of them are regarded as being It takes the view that there is therefore "whole", even if they have been sliced. not only a logical and linguistic contrast between the Common Customs Tariff and the preferential system but a real Such an interpretation seems to it to be legal contrast between a rule of general compatible also with the logical interpre- application and a specific rule. tation, from the legal point of view, of the introduction of the word "whole" in the rules. If the legislature had intended Even if the regulations applicable to the to exclude the mushrooms in question two years in question are assumed to from the system, the explicit and unam- have intended to exclude the importation biguous wording would have been of dried mushrooms normally produced the following: "Mushrooms, dried, by developing countries that would dehydrated or evaporated, excluding simply be the intention of the legislature. cultivated mushrooms and cut or sliced mushrooms". 3. The Italian Government supports the Commission's point of view and refers to Likewise from the commercial point of the summary record of the meeting of view Folci claims that an interpretation the above-mentioned Nomenclature such as the one which it advocates is Committee.

Technically it finds that there is a preserved mushrooms from also difference between treatment such as including cultivated mushrooms, drying, dehydration and evaporation which are excluded from the pref- which leaves the mushroom in one piece erential tariff system, and which it and treatment such as cutting, breaking would have been impossible to and pulverization which transforms the identify in the form of preserved, cut product. The application of the pref- mushrooms. It appears in fact to be erential system to the latter would make impossible to distinguish cultivated it moreover difficult to establish in mushrooms from others once they are practice whether a product which has no longer 'whole'. been broken or pulverized contains all the parts of the mushroom or not. 2. For the same reasons the proposal from the Commission and the Council Finally from the linguistic point of view regulation for 1976 contained the it appears to it to be plain that the word word 'whole'. "whole" can have no meaning other than "intact". 3. The Commission during its preparations for its proposal for 1977 discovered that certain developing countries were only producing III — Questions raised by the preserved, cut mushrooms and Court considered it more important to allow them to participate in the preferential scheme than to make sure of The Court asked the Commission: "Is it excluding preserves illegally possible to explain the reasons for which containing cultivated mushrooms. In the word 'whole' was first omitted, then fact this did not happen very often. inserted and finally removed from tariff The Council adopted this reasoning. heading 07.04 in connexion with the preferential system applicable from 1972 4. Since 1977 the word 'whole' under to 1980?" The Commission in a letter tariff heading 07.04 has been excluded dated 4 June 1980, gave the following from both proposals from the reply: Commission and Council regu- lations." 1. "Until 1974 both proposals from the Commission and Council regulations on generalized preferences concerning certain agricultural products falling IV — Oral procedure within Chapters 1 to 24 of the Common Customs Tariff referred to tariff heading 07.04, mushrooms other At the sitting on 26 June 1980 Folci, than cultivated mushrooms, without represented by C.A. Pedroni of the giving any other particulars. Gorizia Bar, and the Commission, represented by A. Prozzillo, a member of The proposal from the Commission its Legal Department, acting as Agent, for 1975 was drawn up along the presented oral argument. same lines; but the Council during its proceedings came to the conclusion The Advocate General delivered his that there were grounds for adding opinion at the sitting on 18 September the word 'whole' in order to prevent 1980.

3 It is common ground that this product is within subheading 07.04 B of the Common Customs Tariff which, in the versions other than the English version, is worded as follows :

"Légumes et plantes potagères desséchés, déshydratés ou évaporés, même coupés en morceaux ou en tranches ou bien broyés ou pulvérisés, mais non autrement préparés :

JUDGMENT OF 16. 10. 1980 — JOINED CASES 824 AND 825/79

B. autres";

"Grønsager, tørrede, også snittede, knuste eller pulveriserede, men ikke yderligere tilberedte :

B. andre";

B. andere".

All theses versions are clearly based on the French version of the Customs Cooperation Council Nomenclature of which only the French and English versions are authentic. The English wording, which is based on the English version of the said nomenclature, reads as follows:

"Dried, dehydrated or evaporated vegetables, whole, cut, sliced, broken or in powder but not further prepared:

B. Other".

FOLCI v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

4 The regulations which govern, for each year, the scheme of generalized pref- erences in favour of developing countries including Yugoslavia, list in Annex A thereto the products to which the scheme applies. As far as concerns the products falling within heading 07.04 the annexes reproduce the wording of the above-mentioned heading but list only two products coming under sub- heading B, one of which is mushrooms, excluding cultivated mushrooms. The disagreement between the parties in the main action derives from the fact that, for the years in question, and only those years, the description of the product in the annex contains an additional condition, namely that the mushrooms must be "whole".

9 In fact the mere reproduction of the title of tariff heading 07.04 — which includes not only cut or sliced products but also those which are broken or in powder — and the exclusion at the same time of cultivated mushrooms are likely to create prolems with regard to inspection. The question whether such problems must prevail over the interests of certain developing countries is the responsibility of the political institutions of the Community.

10 Consequently the solution which appears expressly in one of the language versions, which is in no way inconsistent with the other versions and moreover supplies a complete answer to any problems concerning inspection, should be upheld.

1 1 Therefore the appropriate answer to the question referred to the Court by the Corte Suprema di Cassazione is that tariff heading 07.04 "ex B. Other" set out in Annex A to Regulation (EEC) No 3055/74 of the Council of 2 December 1974 and to Regulation (EEC) No 3011/75 of the Council of 17 November 1975 establishing in respect of certain products falling within Chapters 1 to 24 of the Common Customs Tariff a scheme of generalized preferences in favour of developing countries for the years 1975 and 1976 must be interpreted as meaning that the reduced rate does not apply to cut or sliced mushrooms even if all the parts are present.

FOLCI v AMMINISTRAZIONE DELLE FINANZE DELLO STATO

Costs

12 The costs incurred by the Italian Government and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main actions are concerned, in th nature of a step in the actions pending before the national court, the decision on costs is a matter for that court.

The Registrar by order H. A. Rühl P. Pescatore Principal Administrator President of the Second Chamber