C-205/80
ECLI:EU:C:1981:181
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J U D G M E N T O F T H E C O U R T ( S E C O N D CHAMBER) OF 14 JULY 1981
ELBA Elektroapparate- und Maschinenbau Walter Goettmann KG ν Hauptzollamt Berlin-Packhof (preliminary ruling requested by the Finanzgericht Berlin)
"Common Customs Tariff: Light circles"
Case 205/80
Common Customs Tariff— Tariff headings— "Entertainment articles; carnival articles" ... within the meaning of tariff heading 97.05 — Concept — Flashing light circles — Inclusion
"Flashing light circles" consisting of a switched on are to be classified under circular plastic frame to which are tariff heading 97.05 of the Common attached incandescent light bulbs of Customs Tariff. various colours which flash when
In Case 205/80
R E F E R E N C E to the Court under Article 177 of the EEC Treaty by the Finanzgericht [Finance Court] Berlin for a preliminary ruling in the action pending before that court between
ELBA ELEKTROAPPARATE- UND MASCHINENBAU WALTER GOETTMANN KG, Berlin,
and
HAUPTZOLLAMT [Principal Customs Office] BERLIN-PACKHOF
on the question whether "flashing light circles" ("blinkende Leuchtkreise") (diameter roughly 21 cm) consisting of a circular plastic frame, to which are attached candle-shaped incandescent light bulbs, about 24 mm long, of various colours which flash when switched on and which may be placed on
1 — Language of the Case: German.
JUDGMENT OF 14. 7. 1981 — CASE 205/80
the top of a Christmas tree are to be classified as Christmas-tree decorations under tariff heading 97.05 of the Common Customs Tariff (rate of duty 10%) or, because plastic materials are among their constituents, under tariff subheading 39.07 E IV of the Common Customs Tariff (rate of duty 17.6%),
T H E C O U R T (Second Chamber),
composed of: P. Pescatore, President of Chamber, O. Due and A. Chloros, Judges,
Advocate General: G. Reischl Registrar: H. A. Rühl, Principal Administrator
gives the following
JUDGMENT
Facts and Issues
The facts and the arguments presented of a circular plastic frame (diameter by the parties during the written roughly 21 cm) to which are attached by procedure may be summarized as means of plastic holders 49 candle- follows : shaped electric light bulbs, about 24 mm long, of various colours and connected together with electric cable. They are in addition decorated with silver tinsel and I — Facts and written procedure a coloured loop of tinfoil. The incan- descent bulbs, which are arranged in The undertaking ELBA Elektroapparate- three circles of different colours in each und Maschinenbau Walter Goettmann case, light up (flash) alternately when the KG, the plaintiff in the main action electricity is switched on. The bulbs, before the Finanzgericht Berlin, which are not provided with sockets and imported from Taiwan via the Haupt- are simply inserted by their lead-in wires zollamt Berlin-Packhof a quantity of into the lamp-holders, which are integral what may conveniently be called flashing parts of the electric cables, are connected light circles for which it applied for in series. Their voltage is less than 42 release into free circulation on volts and their nominal power is less than 20 December 1978. The article consists 15 watts.
ELBA ν HAUPTZOLLAMT BERLIN-PACKHOF
On importation ELBA declared the According to the order of the Finanz flashing light circles under tariff heading gericht Berlin referring the matter to the 97.05 of the Common Customs Tariff. Court, the arguments of the parties to The Hauptzollamt, the defendant in the the main action are these: main action, classified the light circles under tariff heading 97.05, in accordance The plaintiff which, in its action before with the initial request of the applicant, the Finanzgericht, seeks to have the which consequently paid the customs "flashing light circles" classified as duty of 10%. Christmas-tree decorations under tariff heading 97.05 of the Common Customs Under tariff heading 97.05 of the Tariff submits that they are not goods Common Customs Tariff are classified : put up in sets. The items which give the goods their essential character are the "Carnival articles; entertainment articles electric light bulbs and not the plastic (for example, conjuring tricks and components which perform only a sub novelty jokes); Christmas tree decor sidiary function. The goods in question ations and similar articles for Christmas have been manufactured as Christmas- festivities (for example, artificial tree decorations for the American Christmas trees, Christmas stockings, market. imitation yule logs, Nativity scenes and figures therefor)". In its decision of 25 January 1980 on the ELBA objected and sought a fresh classi objection the Hauptzollamt Berlin- fication of the light circles under tariff Packhof on the other hand came to the heading 85.20 of the Common Customs view that the goods in question were Tariff but the Hauptzollamt Berlin- goods set up in sets to be classified on Packhof decided in the end that the the basis of the component giving them goods should be classified under tariff their essential character. The character subheading 39.07 E IV of the Common of the "light circles" is determined Customs Tariff and consequently essentially by the items made of plastic imposed a customs duty of 17.6%. so that, viewed as a whole, they are to be regarded as "Other goods made of Tariff subheading 39.07 EIV of the plastic — electric indoor lights". Common Customs Tariff is a "catch-all" tariff heading and includes the following The defendant admits that the flashing goods : light circles may possibly be used as Christmas-tree decorations but it takes "39.07. Articles of materials of the kinds the view that they are used in Germany described in headings nos 39.01 to 39.06: mainly as decorative lights for other purposes. However, it concedes that A. Of regenerated cellulose their principal use within the European Communities might possibly be different B. Of vulcanized fibre and determinative.
C. Of hardened proteins The order of 29 September 1980 referring the matter to the Court was D. Of chemical derivatives of rubber received at the Court Registry on 20 October 1980. E. Of other materials: In accordance with Article 20 of the IV. Other". Protocol on the Statute of the Court of
JUDGMENT OF 14. 7. 1981 — CASE 205/80
Justice of the EEC written observations casionally be actually used as a were submitted by the Commission of Christmas-tree decoration. the European Communities, represented by its Legal Adviser, Rolf Wägenbaur, However, the Commission thinks that on 19 December 1980. owing to the way in which the article is presented (at least on the European Upon hearing the report of the Judge- market) it is, on the contrary, generally Rapporteur and the views of the used "at parties" in accordance with the Advocate General the Court decided to view taken by the Zentralverband der open the oral procedure without any Elektrotechnischen Industrie e.V. and preparatory inquiry. the Vereinigung Bayerischer Spielwaren- und Christbaumschmuckhersteller e.V. However, it requested the parties to the
[National Federation for the Electronic main action and the Commission to reply Industry and Association of Bavarian in writing to a question concerning the Manufacturers of Toys and Christmas possibility of considering the goods in Tree Decorations]. question as "carnival . . . [and] enter- tainment articles" under tariff heading 97.05, and the Commission did so within In order that the goods in question may the prescribed period. be classified under tariff heading 97.05 of the Common Customs Tariff it is not sufficient in the Commission's view that they are used occasionally as Christmas
II — W r i t t e n o b s e r v a t i o n s s u b - tree decorations. They must be an article mitted to the C o u r t u n d e r which is used primarily as a Christmas- A r t i c l e 20 of t h e P r o t o c o l tree decoration. on t h e S t a t u t e of t h e C o u r t of J u s t i c e of t h e E u r o p e a n
Economic Community The Commission points out that the goods in question are not included in any of the tariff headings of the The Commission of the European Common Customs Tariff. They are Communities argues that in view of the "goods consisting of more than one presentation of the "flashing light material or substance", within the circles" and especially of the fact that meaning of Rule 2 (b) of the General they are decorated with silver tinsel in Rules for the Interpretation of the the form of fir-tree branches it cannot be Nomenclature of the Common Customs ruled out that the goods were designed Tariff, consisting of a plastic frame with by the manufacturer to be used as synthetic decoration and electrical Christmas-tree decorations. fittings in which are fixed the candle- shaped incandescent light bulbs without According to the Commission that sockets. theory is confirmed by the fact that the goods have a casing which enables the light circle to be attached to the top of a According to the last sentence of the fir tree and it is borne out by the fact above-mentioned Rule 2 (b) the pro- that the manufacturer had such use in cedure to be applied is that of Rule 3 (b) mind, as is disclosed by a reading of the (Rule 3 (a) not being relevant), which brochure attached to the sample included provides that "goods consisting of . . . with the documents placed before the different components" should "be Court. classified as if they consisted of the material or component which gives them The Commission believes that the their essential character, in so far as this "flashing light circle" may in fact oc- criterion is applicable". Bearing in mind
ELBA ν HAUPTZOLLAMT BERLIN-PACKHOF
the external appearance of the goods on example, conjuring tricks and novelty the one hand and their function on the jokes)" and the Commission replied in other, consisting of lighting up at regular the negative on 13 March 1981. intervals when the electricity is switched According to the Commission tariff on thereby producing a decorative effect, heading 97.05 covers carnival articles it is the plastic lighting equipment which and entertainment articles intended for must be regarded as tne component ephemeral use, flimsy and of simple which gives the goods their essential construction, not to be confused with character. articles in ordinary use of which they are an imitation. The "flashing light circles" The Commission therefore concludes in are lighting equipment which may be favour of classifying the "flashing light used for example as decorations for a circles" under tariff subheading private bar or similar installation and for 39.07 EIV of the Common Customs shop windows or exhibition halls. Their Tariff and proposes the following answer manufacture is such as to make it appear to the question put by the Finanzgericht that they are not designed for ephemeral Berlin : use but intended to be used over a period of time, either permanently or at "So-called 'flashing light circles' repeated intervals as lighting equipment. consisting of a plastic frame to which are They cannot therefore be regarded as attached incandescent light bulbs of novelty jokes or the like and con different colours which flash when an sequently cannot, in the Commission's electrical current is passed through them view, come under tariff heading 97.05. must be classified under tariff subheading 39.07 E IV". IV — Oral procedure
III — Replies to the question posed by the Court The Commission of the European Communities, represented by Rolf Wägenbaur, a member of its Legal The Court, by letter of 23 February Department, acting as Agent, presented 1981, asked the Commission whether the oral argument at the sitting on 26 March goods in question might be considered as 1981. coming under tariff heading 97.05 of the Common Customs Tariff as "Carnival The Advocate General delivered his articles; entertainment articles (for opinion at the sitting on 4 June 1981.
Decision
1 By order of 29 September 1980 which was received at the Court of Justice on 20 October 1980, the Finanzgericht [Finance Court] Berlin, Seventh Senate, submitted to the Court the following question for a preliminary ruling on the interpretation of tariff headings 97.05 and 39.07 of the Common Customs Tariff:
JUDGMENT OF 14. 7. 1981 — CASE 205/80
"Are 'flashing light circles' (diameter roughly 21 cm) consisting of a circular plastic frame, to which are attached candle-shaped incandescent lights bulbs, about 24 mm long, of various colours which flash when switched on and which may be placed at the top of a Christmas tree to be classified as Christmas-tree decorations under tariff heading 97.05 of the Common Customs Tariff (rate of duty 10 %) or, because plastic materials are among their constituents, under tariff subheading 39.07 EIV of the Common Customs Tariff (rate of duty 17.6 %)?"
2 This question was raised in the course of an action between ELBA Elektro- apparate and the Hauptzollamt [Principal Customs Office] Berlin-Packhof [hereinafter referred to as "the Hauptzollamt"] concerning the question whether the light circles which ELBA on 20 December 1978 sought to have released into free circulation, must be classified, as they were initially, under tariff heading 97.05 of the Common Customs Tariff or, as was finally decided by the Hauptzollamt, under tariff heading 39.07 of the Common Customs Tariff.
3 Tariff heading 97.05 covers the following goods:
"Carnival articles; entertainment articles (for example, conjuring tricks and novelty jokes); Christmas-tree decorations and similar articles for Christmas festivities (for example, artificial Christmas trees, Christmas stockings, imitation yule logs, Nativity scenes and figures therefor)".
4 According to the version of the text in force at the date of importation, tariff heading 39.07 of the Common Customs Tariff covered the following goods:
"Articles of material of the kinds described in headings Nos 39.01 and 39.06:
A. Of regenerated cellulose B. Of vulcanized fibre C. Of hardened proteins D. Of chemical derivatives of rubber E. Of other materials :
IV Other".
ELBA ν HAUPTZOLLAMT BERLIN-PACKHOF
It is to be noted that headings 39.01 to 39.06 cover plastics, cellulose and similar products.
5 As may be seen from the grounds of the order of the Finanzgericht referring the matter to the Court, the Hauptzollamt, the defendant in the main action, took the view in its decision of 25 January 1980 given on the objection to the classification that the goods were put up in sets and should be classified as if they consisted of the component which gave them their essential character. That character was determined by the components made of plastic, so that the "flashing light circles", as units, should be considered as "other" goods made of plastic under tariff subheading 39.07 E IV of the Common Customs Tariff.
6 ELBA contends that the "flashing light circles" are not goods which are put up in sets and that the components which give them their essential character are the light bulbs and not the plastic parts, which fulfil only a subsidiary function. It further maintains that these are goods which were manufactured for the American market as Christmas-tree decorations.
7 The Hauptzollamt admits that the flashing light circles may be used as Christmas-tree decorations but believes that in Germany they are used mainly as decorative lights for other purposes. It recognizes, however, that their principal use within the European Communities may possibly be different and determinative.
8 In its written observations and oral argument the Commission considers that, in view of the presentation of the "flashing light circles" and taking into account especially the fact that they are decorated with silver tinsel in the form of fir-tree branches and equipped with a casing enabling them to be attached to the top of a fir tree and that, as is apparent from the brochure attached to the sample which forms part of the Court file, the manufacturer had in fact such use in mind, it cannot be ruled out that these goods were designed by the manufacturer to be used as Christmas-tree decorations.
9 The Commission believes, however, that the "flashing light circles" can be used in fact only occasionally as Christmas-tree decorations. In view of the way in which the article is put up, at least on the European market, it is generally used as decoration "at parties".
JUDGMENT OF 14. 7. 1981 — CASE 205/80
10 In this regard the Commission submits that the goods in question are not covered by any of the specific tariff headings of the Common Customs Tariff and, as "composite", goods, must be classified according to Rule 3 (b) of the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff "as if they consisted of the component which gives them their essential character". Since the goods consist of a plastic frame with synthetic decoration and electrical fittings in which are fixed candle-shaped incandescent light bulbs without holders, it is, in the Commission's view, clear that their essential character is determined by the part made of plastic.
1 1 Furthermore, according to the Commission, the possibility of classifying the goods concerned under tariff heading 97.05 as "Carnival articles; enter- tainment articles (for example, conjuring tricks and novelty jokes)" must be excluded owing to the fact that this heading, according to the Explanatory Notes to the Customs Co-operation Council Nomenclature (Paragraph A of the Note on heading 97.05), covers articles which, being flimsy and of simple construction, are intended for ephemeral use and are not to be confused with articles in ordinary use of which they are an imitation. 1
12 According to the Commission, it follows that the "flashing light circles" are lighting appliances which are used as decorations and which are so made as to be intended for use over a period of time either continuously or at repeated intervals. This means that they may not be regarded as novelty jokes or the like under the first part of tariff heading 97.05 of the Common Customs Tariff.
1 3 In the opinion of the Commission, the external appearance of the goods and their function, which consists of lighting up at regular intervals when the electricity is switched on, thereby producing a decorative effect, lead to the conclusion that it is the plastic lighting equipment which must be considered as the component which gives the goods their essential character. The Commission therefore proposes that the goods should be classified under tariff subheading 39.07 E IV.
1 4 According to Rule 3 (a) of the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff, "the heading which provides the most specific description shall be preferred to headings providing a more general description". There is no doubt that tariff heading 39.07 which, according to the Explanatory Notes to the Customs Co-operation Council Nomenclature covers articles made of material falling within headings 39.01 to 39.06 (plastic materials or other) provided that these articles are not 1 — Translator's note: The words "flimsy and of simple construction" and "are not to be confused with articles in ordinary use of which they are an imitation" are a translation of passages in the authentic French text of the Note in question. Equivalent passages do not appear in the authentic English text of the Note.
ELBA ν HAUPTZOLLAMT BERLIN-PACKHOF
specified or included in other headings of Chapter 39 or in other more specific headings of the Nomenclature, is a generic heading of a residual nature ( j u d g m e n t o f 1 M a y 1974 Osram GmbH ν Oberfinanzdirektion Frankfurt am Main [1974] ECR 477) and that as such its scope is less specific than that of heading 97.05 of the Common Customs Tariff.
15 Furthermore, it follows from the external appearance of the goods in question and from their function, as contemplated by the manufacturer or objectively determined by their own structure, that they are essentially intended to produce a decorative effect by means of light-play, whatever may be their precise use for a particular decorative purpose.
16 The "flimsy and . . . simple construction" in conjunction with ephemeral use, which according to the Commission, is a condition for classification under the first part of heading 97.05, does not constitute an absolute requirement in this regard. According to the Explanatory Notes to the Customs Co operation Council Nomenclature, it is only in general and usually that articles to be classified under heading 97.05 are characterized by being flimsy and of simple construction,1 corresponding to the light materials of which they are made. It is clear from the explanatory note on heading 97.05 that the materials used as well as the construction of the articles concerned may confer on them a longer life and the possibility of extended use. The classi fication of the "flashing light circles" under heading 97.05 should not, therefore, be excluded.
17 Furthermore, it cannot be argued that the "essential character" of the article within the meaning of Rule 3 (b) of the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff is determined by the materials used. The essential character of the article is in this case determined by its intended purpose as a decorative lighting appliance regardless of the material used for its frame.
18 It follows that the essential character of the goods complies with the conditions for classification under heading 97.05. The goods concerned may therefore be classified under heading 97.05 and there is no need to determine whether they constitute "carnival... [and] entertainment articles" or "Christmas-tree decorations", since each of these descriptions falls within the wording of the heading concerned.
1 — Translator's note: See footnote on page 2104 in regard to the phrase "flimsy and of simple construction". The phrase "in general" does not appear in the authentic English text of the Note on heading 97.05 whereas the word "généralement" does appear in the authentic French text.
JUDGMENT OF 14. 7. 1981 — CASE 205/80
19 The reply to the question submitted to the Court should therefore be that "flashing light circles" consisting of a circular plastic frame, to which are attached incandescent light bulbs of various colours which flash when switched on, are to be classified under tariff heading 97.05 of the Common Customs Tariff.
Costs
The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.
On those grounds,
THE COURT (Second Chamber)
in answer to the question referred to it by the Finanzgericht Berlin, Seventh Senate, by order of 20 October 1980, hereby rules:
"Flashing light circles" consisting of a circular plastic frame to which are attached incandescent light bulbs of various colours which flash when switched on are to be classified under tariff heading 97.05 of the Common Customs Tariff."
Pescatore Due Chloros
Delivered in .open court in Luxembourg on 14 July 1981.
A. Van Houtte P. Pescatore Registrar President of the Second Chamber