C-196/80

THE MINISTER FOR AGRICULTURE, Dublin,

on the interpretation of subheadings 02.01 A II(a)2 b b and 02.01 A I I (a) 4 aa of the Common Customs Tariff, as they appear in the versions of the said tariff successively in force during the period between 20 March 1978 and 28 April 1979, and of Articles 10 a and 11 (2) of Regulation (EEC) N o 1380/75 of the Commission of 29 May 1975 (Official Journal L 139, p. 37),

T H E C O U R T (First Chamber)

composed of: T. Koopmans, President of Chamber, A. O'Keeffe and G. Bosco, Judges,

Advocate General: Sir Gordon Slynn Registrar: J. A. Pompe, Deputy Registrar

gives the following

I — Facts and written p r o c e d u r e took the view that it corresponded to the definition supplied by Additional Notes 1 A(d) and (e) to Chapter 2 of the Common Customs Tariff, in accordance with which the expression "unseparated Between 20 March 1978 and 28 April forequarters" means "the front part of a 1979 Anglo-Irish Meat Company carcase comprising all the bones and the Limited (hereinafter referred to as scrag, neck and shoulder, with a "Anglo-Irish Meat") exported beef from minimum of four pairs of ribs and a Ireland to the United Kingdom. During maximum of ten pairs of ribs (the first that period monetary compensatory four pairs of ribs must be whole, the amounts were charged on the beef others may be cut) with or without the exported from Ireland and were granted, thin flank" and "separated forequarters" but on the basis of a higher rate, on beef means "the front part of a half-carcase imported into the United Kingdom. At comprising all the bones and the scrag, the same time compensatory amounts neck and shoulder, with a minimum of applicable to imports into the United four ribs and a maximum of ten ribs (the Kingdom of goods from Ireland were first four ribs must be whole, the others paid, with the agreement of the United may be cut) with or without the thin Kingdom, directly by the Irish auth­ flank." orities pursuant to Article 2 a of Regu­ lation N o 974/71 of the Council of 12 May 1971 (Official Journal, English Special Edition 1971 (I), p. 257) as During the period in question monetary amended by Regulation N o 1112/73 of compensatory amounts applicable to the Council of 30 April 1973 (Official forequarters were lower than those Journal L 114, p. 4). applicable to bone-in cuts, considered normally to have a higher value in the trade, and the Irish authorities there­ fore paid the plaintiff by way of compensatory amounts applicable to the The goods exported by the plaintiff import of the goods in question into the consisted of chilled forequarters of beef United Kingdom a sum £442 069 less from which the atlas bone, a small bone than that which it would have received if of approximately 0.5 kg situated in the the British authorities had applied the neck of the carcase, had been removed. same tariff classification as the Irish The consignments of beef in question authorities. were declared to the Irish authorities and accepted by them as a "bone-in cut" under subheading 02.01 A I I ( a ) 4 a a of the Common Customs Tariff. However, The plaintiff therefore brought pro­ on import into the United Kingdom the ceedings in the High Court in Dublin meat was classified as "forequarters" claiming the sum of £442 069 with the under heading 02.01 A II(a) 2 bb of the argument that the classification as tariff. The British customs authorities bone-in cuts was correct and that the

In these circumstances the Commission, 2. If the answer to Question 1 above is so as to avoid any possibility of in the affirmative, are the provisions speculation, first adopted Regulation of Article 10 a and Article II (2) of No 745/79 (Official Journal L 95, p. 1), Regulation No 1380/75 to be which provided a new method of interpreted as placing upon the calculation of monetary compensatory defendant an obligation to grant to amounts by which the amounts appli- the plaintiff a monetary com- cable to subheading 02.01 AII(a) 4 aa pensatory amount at the rate became identical to those applicable to applicable to the tariff heading in subheading 02.01 AII(a)2bb. This question rather than at the rate changed method was applied for the first applicable to a different heading time by Commission Regulation No notified in accordance with article 834/79 of 26 April 1979 (Official 10 a (4) as having been used for Journal L 107, p. 1) which came into release of the goods in question force on 30 April 1979. upon import in the Member State of destination? Subsequently, by Regulation No 936/79 of 11 May 1979 (Official Journal L 117, 3. If the answer to either of the p. 19), the Commission dealt with the questions above is in the negative, question of the tariff classification of the are the said provisions of Regulation products in question, deciding that they must be classified in subheading 02.01 1 — second Translator's note: It appears from the file that this date should in fact be understood as being AII (a) 4 aa. 28 April 1979.

ANGLO-IRISH MEAT COMPANY LIMITED ν MINISTER FOR AGRICULTURE

First question The judgment making the reference was lodged at the Court Registry on 6 All the parties which submitted written October 1980. observations agree in stating that, in accordance with the case-law of the Court, the classification made by the In pursuance of Article 20 of the Commission in Regulation N o 936/79 of Protocol on the Statute of the Court of 11 May 1979 has no retroactive effect, Justice of the EEC written abservations although it may in certain circumstances were lodged by the Anglo-Irish Meat have interpretative value for the purpose Company Limited, represented by J. D. of establishing what was the correct tariff Cooke, Senior Counsel, instructed by classification before its adoption. Messrs Hussey & O'Higgins, Solicitors, Dublin, by the Ministry of Agriculture, represented by L. Dockery, Chief State Anglo-Irish Meat takes the view that the Solicitor, acting as Agent, assisted by correct classification of a forequarter of H . J . O'Flaherty and E. Fitzsimons, beef from which the atlas bone has Senior Counsel, by the United Kingdom, been removed has always been classifi­ represented by R. D. Munrow, Treasury cation under tariff subheading 02.01 Solicitor's Office, acting as Agent, and A I I (a) 4 aa ("unboned (bone-in)"). by the Commission of the European Communities, represented by R. Wain- It is beyond argument that the atlas bone wright, a member of its legal department, is a bone. Tariff subheading 02.01 acting as Agent. A I I (a) 2 bb ("forequarters") is appli­ cable only to cuts containing "all the bones". It follows that a cut of meat On hearing the report of the Judge- from which the atlas bone has been Rapporteur and the views of the removed cannot come under that Advocate General the Court decided to heading. open the oral procedure without any preparatory enquiry. The view adopted by the United Kingdom customs that the expression "all the bones" refers only to "ribs" is However, it asked the parties to the untenable. If the Additional Note 1 A (d) main action and the Commission to reply and (e) to Chapter 2 of the Common before 1 May 1981 to a number of Customs Tariff had intended to refer to questions. ribs it would have used wording to that effect such as "comprising all of the ribs and the scrag . . . etc.". There is no By order of 25 March 1981, the Court logical basis for suggesting that "bones" also decided, in pursuance of Article means "ribs" when it is deliberately

chosen in distinction from the word conclusion that on a literal interpretation "ribs" used later in the same sentence. even the removal of a small bone from the neck is sufficient to take the cut of The correctness of the classification meat in question outside the subheading made by the Irish authorities is moreover "forequarters". borne out by the subsequent authori- tative opinion of the Nomenclature The reasons put forward by the United Committee and by Commission Regu- Kingdom authorities in favour of their lation No 936/79. interpretation cannot, in the Com- mission's view, be accepted. The Irish Minister for Agriculture also takes the view that the expression "all The argument to the effect that the the bones" contained in the definition expression "all the bones" relates to the of separated forequarters in the required number of ribs and not to the aforementioned additional note cannot bones of the neck runs counter to the mean anything other than all the bones second half of the notes which defines in such separated forequarters including the number of ribs which must be present the atlas bone. and which would not have been appro- priate if it had been intended that the The United Kingdom stresses that the expression "all the bones" should also removal of a small bone in the neck, cover the ribs. known as the atlas bone, cannot alter the essential character of a forequarter of The argument to the effect that the beef. practice of removing the atlas bone has no significance in trade and really has Additional Note No 1 A (d) and (e) does the object only of obtaining higher not necessarily preclude the absence of a monetary compensatory amounts for small bone from the neck. If that had the exporter is no doubt worthy of been the intention, the note would have consideration but since it is an economic commenced : argument it has no relevance for the pure question of interpretation. "The front part of the half carcase comprising the scrag, neck and shoulder The Commission next deals with the and all the bones therein, with ...". second part of the first question in which the national court inquires whether sub- The note as drafted is at the very least heading 02.01 AII(a) 4 aa is to be ambiguous. applied in the calculation of compensa- tory amounts charged upon export or It should be noted that the removal of granted on import. the atlas bone in no way changes the character of the product which continues It remarks that although there is no to be bought and sold in the trade as a doubt that the tariff classification must, forequarter but simply makes it possible in the absence of express provisions to to obtain payment of a higher monetary the contrary, be the same whether the compensatory amount by way of a tariff classification is made for the different tariff classification. purposes of customs duties or monetary compensatory amounts, the principle The Commission of the European does not necessarily apply for Communities observes that the wording compensatory amounts granted on of the additional note leads to the import.

According to the case-law of the Court monetary compensatory amounts, relating to export refunds, Member the same as those which result from States may limit the grant of Community the rules of interpretation and subsidies in certain circumstances, for application of the tariff and its example where manipulation or abusive nomenclature. practices are involved, even though the formal conditions for the grant of It is however for the competent subsidies have been met. Similarly, national authorities to judge the having regard to the neutrality of facts with a view to preventing monetary compensatory amounts the undue granting of monetary com­ authorities of a Member State are pensatory amounts for example, as a entitled, according to the Commission, result or manipulation for abuse of to limit the grant of such amounts where the rules of tariff classification." they find that there is manipulation or abuse and where there is consequently a risk of trade distortion. Second question The Commission recalls in addition that by virtue of Article 12 (2) of Regulation N o 1380/75 no monetary compensatory Anglo-Irish Meat observes that the issue amounts are to be granted on products in this case is not whether national which are not of "sound and fair customs authorities are bound by a tariff marketable quality". Although there has classification of another authority but been no contention in this respect in this whether the Community itself is bound case, the existence of that provision does by the incorrect unilateral decision of a show that there is no absolute right to be national authority. granted a compensatory amount in accordance with the applicable tariff heading. N o r would the Commission According to the plaintiff endorsements exclude that tariff manipulation or abuse on Control Form Τ 5 by the United might bring a product within the scope Kingdom customs do. not have the effect of Article 12(2). of altering the classification of goods but merely of notifying the defendant of a dispute in relation to the classification The Commission therefore proposes that asserted. the following answer should be given to the first question : As payment has been accepted only under protest and without prejudice to " 1 . Separated forequarters of bovine the plaintiff's right to pursue its claim animals in a fresh or chilled state, upon the classification which it has from which the atlas bone has been always considered to be correct, finali- removed, fall to be classified under zation of the transaction has been subheading 02.01 A I I (a) 4 aa of the suspended pending a decision as to the Common Customs Tariff. correct tariff classification. The Court of Justice has been specifically asked to resolve that dispute. Consequently if the 2. The criteria for the tariff classi­ Court makes reply to the first question in fication of products coming under the affirmative it follows that the answer the above subheading are, for the to the second question must also be in purposes of the application of the affirmative.

Anglo-Irish Meat emphasizes that in which reference has already been made, accordance with the case-law of the no method for obtaining relief in justice Court (judgment in Case 795/79, Pesch), by means of the procedures laid down an exporting Member State which takes for that purpose by Community law. advantage of the facility provided in Such a development is clearly contrary Article 2 a of Regulation No 974/71 is not only to the spirit of Community law bound by the tariff classification of but also to the dictates of natural justice. goods asserted by an importing Member The discretion thus granted to the State in the absence of a definitive customs authorities of the importing interpretation through the procedures of Member State in deciding on tariff the Community legal system.

case-law of the Court the role of the It must be recalled that at all times the exporting Member State is confined to national intervention agencies are acting making payment of the monetary as local agents on behalf of the compensatory amounts that does not Community fund. In Case 137/78, exonerate the State from exercising that Henningsen, the Commission conceded function responsibly and if it has any that it considered itself bound by its own doubts as to the accuracy of the infor- interpretation "with regard to its mation before it as to classification or intervention within the framework of the otherwise it is obliged to pursue such financing of the common agricultural enquiries as may be necessary in that policy and to the reimbursement of respect. Moreover Article 2 a requires

It would be absurd of the plaintiff'sclaim. to suggest that the tariff classification inserted by the importing Member State is conclusive for all purposes. If that were the position it would follow that If the Court answers the first question in the exporting Member State could be the affirmative and the second question bound by a classification which was in the negative the effect must be that an manifestly incorrect. importer or exporter is totally at the mercy of arbitrary and possibly subjective decisions of Member States as to tariff classification and has, despite Anglo-Irish Meat does not claim that the the terms of the Pesch judgment, to exporting Member State is entitled to

Anglo-Irish Meat recalls that, as the Court stated in Case 5/78, Milchfutter, a particular tariff classification by one According to Anglo-Irish Meat Case Member State does not necessarily bind 795/79 is to be distinguished from the another Member State. It takes the view present case mainly in three aspects. that the principle works both ways. Consequently if the United Kingdom customs authorities were not bound to accept the classification asserted by the Irish customs authorities, the Irish auth­ First, in the Pesch case the court orities were not obliged either to accept submitting the reference made the as final and conclusive the altered tariff supposition that "the Court of Justice classification made by the United has not ruled on the classification of a Kingdom authorities. This principle is product in the Common Customs underlined by the judgment in the Pesch Tariff", whereas in this case the High case, where the Court indicated the Court has asked first for a ruling on the procedures to be followed to avoid an conflicting tariff headings so that the injustice which might otherwise be plaintiff's claim may be dealt with upon caused by divergent classifications. the basis of a resolution of that issue.

According to Anglo-Irish Meat it Secondly, in the abovementioned case, appears from that case-law that the the issue involves cumulative monetary Court accepted the opinion expressed by compensatory amounts whereas this case Mr Advocate General Capotorti in Case involves the payment of a levy upon 5/78 to the effect that "the requirements

of the proper functioning of the system incorrect decision or classification of of monetary compensatory amounts a national authority. should induce the importing State to refrain from carrying out systematic inspections of the goods and in any event The Irisch Minister for Agriculture to avoid adopting a classification of the believes that his point of view to the goods which is different from that of the effect that the classification by the State of origin unless it is objectively United Kingdom customs authorities of shown that the first classification was separated forequarters with atlas bone incorrect". removed was incorrect does not entitle the Minister to disregard that classi- fication. The plaintiff takes the view that to the extent to which that statement represents He observes that in accordance with the expression of a principle it tended to Article 11 (2) of Regulation No ensure as far as possible the desired 1380/75, the payment by the exporting uniformity of tariff classification, it is Member State of the amount which relevant to point out that objectively the should be granted by the importing first classification, that is to say the one Member State is conditional upon the asserted by the Irish Customs authorities, was correct. production of proof that customs import ormalities have been completed and that any duties and charges having equivalent It therefore states that the following effect payable in the importing Member principles emerge from the case-law of State have been charged. Such duties and the Court: charges having equivalent effect can only be fixed and charged following the making of a decision by that Member 1. The unilateral decision of one State upon the tariff classification of the Member State is not necessarily goods. Furthermore Article 10 a (4) of binding upon another Member State Regulation No 1380/75 expressly entitles subsequently dealing with the same the customs authorities of the importing transaction. Member State to alter the tariff classi- fication entered in the transit document accompanying the goods when they 2. The Customs authorities can question reached the customs. an earlier classification and alter it if it is objectively incorrect. In the Minister's view the combined effect of these provisions was to entitle an importing Member State to make the 3. For the purpose of Article 2 a of definitive decision upon the tariff classi- Regulation No 974/71 an exporting fication of the goods imported so as in Member State is bound by the classi- this way to bind the authority of the fication of the importing Member exporting Member State charged with State until the Nomenclature Com- the payment of the monetary com- mittee and the Commission or Court pensatory amounts thereon. of Justice has given a ruling as to the correct classification. The fact that monetary compensatory amounts based on a different classi- 4. The Commission, as the ultimate fication were charged by the Irish paying authority of the Community Minister for Agriculture on the export of Fund is not necessarily bound by the the goods from Ireland does not alter the

The Minister for Agriculture states that he took into account the views of the The United Kingdom takes the view that Commission as expressed in its letter of according to the case-law of the Court 31 October 1979 in which it confirmed the exporting Member State availing that within the meaning of the Com­ itself or the facilities laid down in Article munity regulations the only monetary 2 a of Regulation No 974/71 is bound compensatory amounts legally applicable by the tariff classification effected by the in this case to products imported into the importing Member State. United Kingdom were those recorded by the Customs authorities of that country and he therefore takes the view that in It maintains that its classification opinion paying those amounts he acts as agent should be regarded as valid, certainly for the European Agricultural Guidance until Commission Regulation (EEC) and Guarantee Fund and has therefore No 936/79 took effect on 2 June 1979. acted in a proper and responsible manner. According to the United Kingdom, although the classification regulation was published in order to enforce the The Minister recognizes that the majority decision reached by the circumstances of the case in which the Committee on Common Customs Tariff customs authorities of the exporting and Nomenclature that the product was a importing Member States disagree on the "bone in cut" it was never the intention tariff classification to be attributed to the that any financial advantage should same goods is inimical to the proper accrue from its effects, as is proved by functioning of the Common Customs the fact that already from 20 April 1979 Tariff and Community intervention Regulation No 834/79 had reduced measures. He observes however that the monetary compensatory amounts on case-law of the Court seems to have "bone-in cuts", to the same level as that accepted the principle that the tariff on "forequarters". classification made by an exporting Member State is not necessarily binding on the importing State in respect of the If the Court should give an affirmative same goods. answer to the first question the United Kingdom thinks that retroactive application of the ruling should not be In these circumstances and having regard allowed for the period in question since to the provisions of the applicable regu­ that would amount to sanctioning lations the Minister for Agriculture took payment of Community funds not the view that he was bound not by the intended to be paid. classification made by the Irish auth­ orities but by that of the United Kingdom authorities. He did not regard According to the United Kingdom, himself as entitled to consider the issue whilst Community law does not exclude of whether or not that classification was all possibility of retroactive effect of

Community legislation, the general rate appropriate to "forequarters", principle is that in the absence of special notwithstanding the formal change of factors retroactivity will not be allowed. classification. That decision could be In this case there are no special factors communicated to the Irish authorities which might justify rectroactive who as mere paying agents for the application of the ruling but it was pre- United Kingdom's compensatory cisely with a view to avoiding disruption amounts would be obliged to follow that that Regulation (EEC) No 834/79, decision. Moreover it might even be that altering compensatory amounts, was the United Kingdom authorities cannot brought into effect before Regulation be legally obliged to change their classi- (EEC) No 936/79, altering the classi- fication if the plaintiff is time-barred fication. under United Kingdom procedural rules. In any event it is clear that there is nothing in the present proceedings which could lead the national court to order The Commission of the European the Irish authorities to pay over the Communities states that as regards this United Kingdom import compensatory question, it remains of the opinion which amounts at a rate other than that appro- it has expressed in the past and which priate to the appreciation of the United has recently been confirmed by the Kingdom authorities. Court. It therefore takes the view that the authorities of an exporting Member State are bound to apply the classi- fication made by the authorities of the The Commission therefore suggests that importing Member State on import. It the reply to the second question should even goes further and maintains that in be as follows: the context of Article 2 a of Regulation No 974/71 the exporting Member State is no more than the paying agent and as "Article 2 a of Regulation No 974/71 of such is bound by the total appreciation the Council together with Article 11 of the importing Member State of the of Regulation No 1380/75 of the compensatory amount to be paid on Commission is to be interpreted in the import. sense that the exporting Member State is bound, for the determination of the monetary compensatory amount on import into another Member State by the This conclusion is not affected by the appreciation which the latter Member Commission's view that the classification State makes of the goods in question." effected in this case by the United Kingdom authorities is incorrect.

currencies. It would be illogical to permit the harmful effects for the plaintiff of the a situation to develop in which that United Kingdom's decision not to grant system should itself become an obstancle. compensatory amounts at the higher The application of two different and rate. That solution might at first sight inconsistent classifications to the same appear shocking but would be a logical product would necessarily lead to consequence of the powers attributed to distortion of trade in agricultural the Member States for the grant and the products subject to the common agri­ charging of compensatory amounts. It is cultural policy. also a result which might have arisen in just the same way if Ireland and the United Kingdom had not been exercising The Irish Minister for Agriculture the option under Article 2 a of Regu­ observes that Regulation No 1380/75 lation No 974/71. does not make any express provision for the situation envisaged by the third question and that in consequence the The Commission therefore suggests that question whether a claim for the third question should be answered as reimbursement arises is to be determined follows : in accordance with national law. "The said provisions of Regulation No 974/71 [Article 2 a] and No 1380/75 The Commission of the European [Article 11] are not to be interpreted as Communities observes that the third imposing any obligation on an exporting question is based on two mutually Member State to refund monetary exclusive hypotheses. compensatory amounts which have been charged on export on the basis of a correct tariff classification, even where If the Court were to interpret the that Member State has been obliged Common Customs Tariff in the same to limit the payment of monetary sense as the authorities of the United compensatory amounts on import into Kingdom the Irish authorities would another Member State in accordance then be bound to change their class­ with the appreciation made by the ification provided that their internal rules latter." so permit and should thus reimburse part of the compensatory amounts charged on export. That is possible as Regulation No 936/79 on tariff classification does III — Oral procedure not have retroactive effect.

2 Article 2 a of Regulation No 974/71 of the Council, as amended by Regu- lation No 1112/73 of the Council of 30 April 1973 (Official Journal L 114, p. 4), provides that:

"Where a product exported from one Member State has been imported into a Member State which has to grant a compensatory amount upon import- ation, the exporting Member State may, by agreement with the importing Member State, pay the compensatory amount which should be granted by the said importing Member State. In this case no compensatory amount shall be granted by the importing Member State for products originating in the Member State concerned. . . . "

3 Detailed rules for the application of that provision were laid down in Regu- lation No 1380/75 of the Commission, in particular in Article 10 a thereof, which was inserted by Commission Regulation (EEC) No 1556/77 of 11 July 1977 (Official Journal L 173, p. 10), and in Article 11. During the period in question paragraph (2) of the latter article provided, inter alia, that:

"Payment by the exporting Member State of the monetary compensatory amount which should be granted by the importing Member State shall be conditional upon the production of proof that customs import formalities have been completed and that the duties and charges having equivalent effect payable in the importing Member State have been charged.

This proof shall be furnished by production of the control copy provided for in Article 1 of Regulation (EEC) No 2315/69. .. ".

ANGLO-IRISH MEAT COMPANY LIMITED ν MINISTER FOR AGRICULTURE

7 In view of the tariff classification of the goods adopted by the British customs authorities the Irish intervention agency responsible for the application of monetary compensatory amounts paid the plaintiff the amounts applicable on importation into the United Kingdom which corresponded to that tariff classification and not to the classification adopted on exportation by the Irish customs authorities.

β In the meantime the Commission, to which the United Kingdom had referred a question concerning the tariff classification of such goods, investigated the problem. By means of Regulation No 745/79 of 11 April 1979 (Official Journal L 95, p. 1) the Commission laid down a new method for calculating monetary compensatory amounts whereby the amounts

JUDGMENT OF 1. 10. 1981 — CASE 196/80

applicable to the two tariff subheadings in question were identical. Sub- sequently, by means of Regulation No 936/79 of 11 May 1979 (Official Journal L 117, p. 19), it resolved the question of the tariff classification of such products by deciding that they must be classified in subheading 02. 01 A II (a) 4 aa.

"1. Are the provisions of the Common Customs Tariff of the European Communities (as contained in Council Regulation (EEC) No 950/68, as amended) to be interpreted in respect of the period between 20 March 1978 and 20 April 1979 1 as requiring a separated forequarter of beef in a chilled state from which the atlas bone had been removed, to be entered for customs purposes under heading 02.01 A II (a) 4 aa and to be dealt with accordingly in the calculation of monetary compensatory amounts levied upon export or granted upon import in trade between the Member States? 1 — Translator's note: It appears from the file that this second date should in fact be understood as being 28 April 1979.

ANGLO-IRISH MEAT COMPANY LIMITED ν MINISTER FOR AGRICULTURE

2. If the answer to Question 1 above is in the affirmative, are the provisions of Article 10a and Article 11 (2) of Regulation No 1380/75 to be interpreted as placing upon the defendant an obligation to grant to the plaintiff a monetary compensatory amount at the rate applicable to the tariff heading in question rather than at the rate applicable to a different heading notified in accordance with Article 10 a (4) as having been used for release of the goods in question upon import in the Member State of destination?

3. If the answer to either of the questions above is in the negative, are the said provisions of Regulation No 1380/75 to be interpreted as imposing upon the defendant an obligation to refund to the plaintiff the excess monetary compensatory amounts levied upon the export of the said goods from Ireland and attributable to the application of tariff heading 02.01 A II (a) 4 aa?"

do not contain all the bones of that portion of the animal its scope must be determined in the light of the interpretative criteria laid down by the Common Customs Tariff.

1 6 It appears from the Additional Notes on Chapter 2 of the Common Customs Tariff, in particular Note 1 A (e), that "separated forequarters" for the purposes of, inter alia, the subheading in question, means the front part of a half carcase "comprising all the bones and the scrag, neck and shoulder, with a minimum of four ribs and a maximum of ten ribs . . . with or without the thin flank".

17 The expression "comprising all the bones" which appears in that note cannot be interpreted as referring exclusively to the ribs and not to the neck bones. The very fact that the note itself expressly stipulates the minimum and maximum number of ribs which must be present in the portion of the animal in question implies that that expression refers not to the ribs but to the other bones, including the neck bones.

18 In view of that definition of the products which fall within subheading 02.01 A II (a) 2 bb the possibility of classifying in that subheading separated quarters such as those in the present instance from which a neck bone, even a small one, has been removed, must be excluded.

19 From the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff, in particular Rule 3 (c) thereof, it is evident that only tariff subheading 02.01 A II (A) 4, which covers products "other" than carcases, half carcases, forequarters and hindquarters, is relevant for the purposes of the tariff classification of the said products. In view of the fact that subparagraphs aa and bb of that subheading cover "unboned (bone-in)" cuts or "boned or boneless" cuts respectively, and that these products have been only partly boned, by the removal of one small bone in the neck, the most appropriate tariff classification under the Common Customs Tariff must therefore be in the present case that of "unboned (bone-in)" cuts within the meaning of subheading 02.01 A II (a) 4 aa.

24 The plaintiff in the main action has observed, inter alia, that whilst it is true that the rules laid down in Article 2 a of Regulation No 974/71 of the Council, as amended by Regulation No 1112/73 of the Council, provide that the exporting Member State may not substitute its own tariff classification for that adopted by the importing Member State, nevertheless the said Member State is not bound to apply the classification adopted by the

JUDGMENT OF 1. 10. 1981 — CASE 196/80

importing Member State if the latter classification is found, in the light of a Commission regulation concerning interpretation or a decisions of the Court of Justice concerning the classification applicable to the products in question, to be inconsistent with the Common Customs Tariff. That is the case here, according to the plaintiff, in consideration of both Commission Regulation No 936/79 providing for tariff classification of the products in question in subheading 02.01 A II (a) 4 aa and the judgment of the Court of Justice to which the present proceedings regarding the tariff classification applicable to the products in question have been referred, should it uphold the classi- fication which was applied by the exporting Member State.

25 Apart from the fact that a Commission regulation specifying the conditions for classification in a particular tariff heading or subheading is of a legislative nature and cannot therefore have retroactive effect (judgment of 28 March 1979, Biegi, cited above) it should be noted that the argument set out above is based on a misinterpretation of the provisions of Article 2 a of Regulation No 974/71 of the Council.

classification made by the importing Member State binds the exporting Member State as regards payment of the compensatory amounts on import.

28 Similarly, the provision in Article 10 a (4) of the abovementioned Regulation N o 1380/75 regarding Community transit, to the effect that the authorities of the Member States where the product is released for home use after completion of customs formalities must inform the Member State from which the goods departed of the classification applied on import, which may be different, confirms by implication that the tariff classification of the imported products is the responsibility of the importing Member State and that any discrepancy between the tariff classification made by the importing Member State and that adopted by the Member State whence the goods came has no effect other than to confer on the latter State the right to be informed thereof.

29 Although in accordance with the principle laid down in Article 5 of the Treaty, and having regard to the need for uniform application of the Community rules within the common market, every Member State making a tariff classification which proves in the light of a judgment of the Court interpreting the Common Customs Tariff to be inconsistent with the tariff, is bound to draw the appropriate conclusion from that judgment as regards the application of a correct tariff classification, nevertheless such a judgment does not give the exporting Member State within the framework of the system laid down in Ajrticle 2 a of Regulation N o 974/71 of the Council the power to substitute itself for the importing Member State in selecting the tariff classification applicable to the goods once those goods enter the customs territory of the latter State.

Question 3

33 In its third question the national court inquires whether, in cases such as the present where the goods exported from a Member State and imported into another Member State have been given different classifications, and where the tariff classification applied on export is consistent with the Common Customs Tariff, the exporting Member State may, under the system introduced by Article 2 a of Regulation No 974/71 of the Council, refund to traders the difference between the monetary compensatory amount charged on export and the lower amount which would be collected by the exporting State on the basis of the tariff classification adopted by the importing Member State.

34 From the considerations set out above in regard to the second question it follows that the refund of such extra portion of the monetary compensatory amount, which has no legal basis in the tariff classification adopted by the exporting Member State, would conflict with the Community rules concerning the Common Customs Tariff and with those governing the operation of monetary compensatory amounts.

ANGLO-IRISH MEAT COMPANY LIMITED ν MINISTER FOR AGRICULTURE

35 In the light of all those factors the reply to the third question must be that the provisions of Regulation N o 974/71 of the Council, and in particular of Article 2 a thereof, and those of Regulation N o 1380/75 of the Commission of 29 May 1975 must be interpreted as meaning that the exporting Member State is not empowered to pay traders the difference between the monetary compensatory amount applicable on export, which corresponds to the tariff classification made by that Member State, and the lower monetary compensatory amount on export which corresponds to the tariff classification applied on import by the importing Member State.

2. The provisions of Regulation No 1380/75 of the Commission of 29 May 1975 are to be interpreted as meaning that the exporting Member State which pursuant to the rules laid down in Article 2 a of Regulation No 974/71 of the Council, as amended by Regulation No 1112/73 of the Council, and with the agreement of the importing

OPINION OF SIR GORDON SLYNN — CASE 196/80

Member State, pays the monetary compensatory amounts payable by the latter State, is bound by the tariff classification adopted by the latter and must pay the monetary compensatory amounts due from the importing Member State at the rate which corresponds to the tariff classification adopted by the latter.

3. The provisions of Regulation No 974/71 of the Council, and in particular of Article 2 a thereof, and those of Regulation No 1380/75 of the Commission of 29 May 1975 must be interpreted as meaning that the exporting Member State is not empowered to pay traders the difference between the monetary compensatory amount applicable on export which corresponds to the tariff classification made by that Member State, and the lower monetary compensatory amount on export which corresponds to the tariff classification applied on import by the importing Member State.

Koopmans O'Keeffe Bosco

Delivered in open court in Luxembourg on 1 October 1981.