C-49/81

JUDGMENT OF THE COURT (FIRST CHAMBER) 27 MAY 1982 '

Paul Kaders GmbH v Hauptzollamt Hamburg-Waltershof (reference for a preliminary ruling from the Bundesfinanzhof)

(Common Customs Tariff — Vegetable extracts and resinoids)

Case 49/81

Common Customs Tariff— Tariff headings — "Essential oils and resinoids" within the meaning of heading 33.01 — Concept — Gingerol — Exclusion

"Essential oils and resinoids" of products character of the product, do not fall which contain, in addition to odoriferous within heading 33.01 of the Common substances, a far higher proportion of Customs Tariff. In particular, a product other plant substances, such as such as gingerol is not among the chlorophyll, tannins, bitter principles or odoriferous substances which fall within other flavouring substances, carbo­ the said tariff heading, since its essential hydrates and other extractive matter characteristics are determined largely by which help to determine the typical taste and not by smell.

JUDGMENT OF 27. 5. 1982 — CASE 49/81

on the interpretation of tariff heading 13.03 (vegetable extracts) and tariff subheading 33.01 C (resinoids) of the Common Customs Tariff laid down in Council Regulation No 2723/76 of 8 November 1976 (Official Journal 1976, L 314),

THE COURT (First Chamber)

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

Advocate General: P. VerLoren van Themaat Registrar: H. A. Rühi, Principal Administrator

gives the following

lanrr heading 13.03 covers vegetable the literature on the subject as vegetable saps and extracis apart from the products extracts which were used as spices in the listed in Notes (a) to (ij) of Chapter 13. manufacture of food-stuffs. In the Under Note (h) to that Chapter, a Federal Republic of Germany, they were vegetable extract falls under tariff also known as extracts of spices and heading 33.01, not tariff heading 13.03, were used for the same purpose as if it constitutes essential oils, concretes, natural spices, but brought out the absolutes and resinoids. fragrance of the extracted substance

oil of ginger, the product could be extracted from ginger. contained all the typical contents and constituent substances of ginger, that is to say chlorophyll, tanins, bitter principles, carbohydrates and so on, and In its appeal on a point of law to the was used chiefly as a spice for meat Bundesfinanzhof, the plaintiff claimed products, soups, vegetables, sauces, etc. that the product was a vegetable extract containing all the contents of ginger, as . well as essential oils to a maximum of The Finanzgericht took the view that the about 25%, and that unless it could be imported extract of ginger was considered as essential oil or resinoid it indisputably a vegetable extract which, had to be classified under tariff heading however, according to Note (h) to 13.03. According to the plaintiff, Chapter 13 of the Common Customs essential oils under tariff heading 33.01 Tariff did not fall within tariff heading were products in which the presence of 13.03 if it displayed the characteristics of fragrant substances constituted an resinoids under tariff heading 33.01. essential characteristic. The essential oils

Resinoids were to be used as a spice. It ought therefore often called oleoresins. In the Annex to to be classified under tariff heading the Explanatory Notes to Chapter 33 of 13.C3. the Customs Cooperation Council Nomenclature, the list of resinoids also included inter MÍJ resinoids ol ginger. According to the Explanatory Notes on tariff headings 13.C3 and 33.CI, the decisive factor for the purpose of tariff In accordance with those considerations, classification was not the plant from resinoids or oleoresins were described in which the vegetable extract was

obtained, but only the proportion of heading 13.03 that the character of odoriferous substances (essential oils) resinoids was determined by their contained therein. As a result, it was not fragrant (as regards smell and taste) significant that in the Annex to the substances. The proportion of Explanatory Notes to the Customs odoriferous substances contained in an Cooperation Council Nomenclature extract was not decisive. (Chapter 33) ginger was also mentioned, In the Hauptzollamt's opinion, the since it was indisputable that oil of Finanzgericht had made no error with ginger was also extracted from the regard to the content, meaning and ginger root and used as a fragrant scope of the Explanatory Notes to the substance in the perfume industry. Customs Tariff of the European However, oil of ginger had nothing in Communities on tariff heading 33.01. common with extract of ginger which They were intended only as clarification contained all the typical constituent sub- and might therefore be applied stances of ginger and was used as a retroactively.

Is a typical constituent substances of ginger product described as extract of ginger root and was remarkable in so far as it containing, in addition to 25% essential contained in a highly concentrated form oils, all the soluble contents of the ginger all the fragrant constituents of the root to be regarded as vegetable extract natural spice, whose fragrance it coming within tariff heading 13.03, or. reproduced more fully than could the oil having regard to the amounts of present in the raw material. By its odoriferous substances of fragrant method of extraction, its properties and constituents, as resinoid falling within its use. such a product was characterized tariff heading 33.C1 C, even though as as a resinoid. vegetable extract it contains all the tv-pical contents and constituent sub- According to the Hauptzollamt.

KADERS v HAUPTZOUAMT HAMBURG-VALTERSHOF

essential oils. Nevertheless, it cannot be The plaintiff's opinion that vegetable inferred from the wording of tariff extracts fall under tariff heading 13.03 in headings 13.03 and 33.01 that vegetable so far as they contain all the typical extracts must necessarily always be constituents of the original product and classified as resinoids under tariff may be considered to be essential oils heading 33.01 where, as in the case of and resinoids only if they contain solely the extract of ginger in question, they the truly odoriferous constituents may be have a 25% content of essential oils. If supported by the fact that, on the one the situation were otherwise all vegetable hand, valerian and garlic extracts, for extracts would always be classified under example, fall under tariff heading 13.03

of solving the existing problems of interpretation. The Explanatory Notes to the Customs Tariff of the European Communities on According io the Explanatory Notes to tariff subheading 33.: 1 C. adopted in the Customs Cooperation Council June I97S. that is io say after the time of Nomenclature regarding tarifi heading importation, which is determinam, also 13.C3, (subheading (A), note (k) on fail io remove the existing doubts as to excluded products), which were in force the classification of extract of ginger. ai the time of importation, resinoids fall, According to the notes, resinoids according to Noie (hi on Chapter 13 extracted from certain parts of plants are

remarkable in that they reproduce the Advocate General, the Coun decided to fragrance of the extracted substances open the oral procedure without anv more fully than does the essential oil preparatory inquiry. By order of alone which is generally present in the 26 October 1981, the Coun decided to raw material. As the Finanzgericht also assign the case to the First Chamber. The considered, those Explanatory Notes are panies and the Commission were to some extent incompatible with the requested to provide funher information Explanatory Notes to the Customs Co- on the practice in the various Member operation Council Nomenclature on States in relation to the tariff classi- tariff heading 13.03. As regards the fication of the product concerned. concept, for tariff classification purposes, of resinoids, those notes state, albeit not unequivocally, that they must be composed essentially of odoriferous sub- stances. The Explanatory Notes to the II — W r i t t e n observations sub- Customs Tariff of the European mitted to the Court Communities on tariff heading 33.01 do not go into that point. Furthermore, they establish a connexion between the fragrance and the essential oil contained Paul Kaders GmbH, the plaintiff in the in the raw material, which leads to the main action, claims that in this case it is conclusion that in the main only essential necessary to determine what is meant by oils and not other flavouring substances vegetable extracts described as resinoids such as gingerol, for example, are to be under tariff subheading 33.01 C of the considered as odoriferous substances Common Customs Tariff and how they indicative of resinoids. should be delimited in relation to other vegetable extracts under tariff heading 13.03. Finally, the Bundesfinanzhof considers that there is also doubt whether the Explanatory Notes to the Customs Tariff In that regard, reference should first be of the European Communities should be made to tariff heading 13.03. which applied retroactively, since they were not includes all vegetable saps and extracts published until after the time of impor- except for the products listed in Notes tation. (a) to (ij) to Chapter 13 which are classified under a more specific tariff heading. Those goods may be divided on In accordance with Anicie 20 of the a systematic basis into four groups, Protocol on the Statute of the Court of group (d) of which covers vegetable Justice of the EEC, written observations extracts containing cenain constituents »ere submitted by Paul Kaders GmbH, (Notes (g) and (h)). Apan from tanning represented by H. Heemann. of Messrs. or dyeing extracts, the lauer group Modest, Rechtsanwälte, Hamburg, and covers essential oils, concretes, absolutes by the Commission of the European and resinoids which should be classified Communities, represented by P. under tariff heading 33.03. Karpcnstein. Legal Adviser, acting as Acent. assisted bv Rolf Streckmann, tax consultant. Franktun am Main. The plaintiff claims that the title of Chapter 33, "Essential oils and resinoids; perfumery, cosmetic or toilet prep- Upon heanng the repon of the Judge- arations", shows that the Customs Tariff Rapponeur and the views of the equates essential oils and resinoids and

that it classifies them among perfumery, odoriferous substances, they also contain cosmetic or toilet preparations. all the other constituent elements and because resinoids differ from vegetable extracts under Chapter 13 in so far as, in It is clear from definitions to be found in essence, they contain only odoriferous dictionaries that resinoids are obtained substances and not in addition the other from odoriferous resins and balsams and constituent elements of the raw material. are used as fragrant and odoriferous substances in the perfume and soap industry for the manufacture of perfumen', toilet and- cosmetic The plaintiff states that as regards the

industry. As a result, they are different extract of ginger which it imported is not both in their composition and the use to a resinoid under tariff subheading which they are put from all the other 33.Cl C, because it was not extracted by vegetable extracts under tariff heading reason of its odoriferous constituent 13.03, which do not contain wholly or elements and also because it is not used mainly odoriferous constituents of as a scenting product in the perfume plants, which are not extracted by reason industn· by reason of the typical of the existence of the latter and which constituents of its fragrance (essential are not used as odoriferous products.

JUDGMENT OF 27. 5. 1982 — CASE 49/81

extracts characterized by their dyeing, raw material. Resinoids intended for the tanning and odoriferous substances and food industry are also often called used accordingly. oleoresins."

determinant. If, in addition to the raw material which in their turn common odoriferous constituents determine the odoriferous nature of the (essential oils), it contains a far higher extract, as is shown by the definition of proportion of other plant substances, the essential oils in the Explanatory Notes to vegetable extract concerned should be the Customs Tariff of the European classified under tariff heading 13.03. If, Communities on tariff subheading on the other hand, it is made up mainly 33.01 B: of odoriferous constituents (essential "Essential oils are rather complex oils), and contains only trifling quantities mixtures, the constituents of which are of other plant substances, it should be of varying importance, from the perfume classified under tariff heading 33.01 as

That shows that Explanatory Notes assimilates resinoids the concepts of "fragrance" and of and essential oils and treats them equally "perfume" used in the Explana: ry from the point of view of tariff classi- Notes to the Customs Tariff of the fication, regardless of the differences European Communities on tariff sub- which exist between them in an headings 33.C1 B and C have the same individual case. meaning and refer to the general impression of essential oil or resinoid The Explanatory Notes to the Common provided by the smell. Customs Tariff on tariff subheading 33.: 1 C describe resinoids as follows: The same result is achieved on the basis of the concept of "oleoresins". _ newly- "Resinoide are extracted from certain introduced in the Explanatory Notes to pans of plants or trom cenam animal the Customs Tariff. substances by means of solvents They are remarkable in that they reproduce The concept of "oleoresin" has several the fragrance ot' the extracted substances meanings. The plaintiff cites the more tulK than does the essential oil definition provided by the Römpp alone which is generaliv present in the Chemistry Dictionary

"Ambiguous concept which is used to constituents of the ginger root. For refer to balsams on the one hand and that reason it should be classified as concentrated extracts of spices on the a vegetable extract falling within other..." tariff heading 13.03, regardless of the fact that among its natural In English, it is in general customary to constituent elements there are also describe extracts of spices as oleoresins odoriferous substances (essential whereas in German the use of the word oils). "extract" remains prevalent to describe spices obtained from vegetable extracts. 3. The gingerol contained in the However, apart from that, the English extract of ginger is a flavouring customs authorities regard extracts of substance and not a scenting spices (usually called "oleoresins" in substance. Therefore gingerol is not English) as vegetable extracts falling among the odoriferous substances within tariff heading 13.03 and not as (essential oils) of the ginger root." resinoids. That shows that neither the name of The Commission observes that the Bun- oleoresin given by the American manu- desfinanzhofs first question concerns the facturer to the extract of ginger imported delimitation of tariff heading 13.03 in by the plaintiff nor the use of the relation to tariff subheading 33.01 C and concept of oleoresin in the Explanatory raises a problem of the interpretation Notes to the Customs Tariff of the of secondary legislation. The second European Communities on tariff heading question should be understood as 33.01 is decisive in relation to the classi- follows: fication of the spice-extract at issue and the dividing-line between tariff headings "Must a vegetable extract which contains 13.03 and 33.01. all the typical constituent elements and substances of the fruit or plant be In conclusion, the plaintiff suggests that classified as resinoid under tariff sub- the questions referred to the Court for heading 33.01 C, having regard to all of a preliminar)· ruling by the Bun- its odoriferous substances or fragrant desfinanzhof should be answered as ingredients?" follows: "1. Tariff heading 13.03 covers all In the Commission's view the third vegetable extracts which are question asks whether the odoriferous obtained by means of solvents and substances of an extract, such as contain all the typical plant sub- gingerol, may also be taken into stances (constituents). consideration to justify classification of Tariff subheading 33.01 C covers the extract as resinoid. vegetable extracts which are extracted by reason of their Seen in that way, the questions submitted odoriferous substances and used as concern first the delimitation of tariff scenting or odoriferous substances. heading 13.03 (vegetable extracts) and They differ from vegetable extracts tariff subheading 33.01 C (resinoids) of falling within tariff heading 13.03 in the Common Customs Tariff. The so far as they contain essentially wording of the two tariff' headings is the only the odoriferous substances of same today as it was at the time of the the plant. imports in question.

tariff subheading 33.01 C were not capable of perceiving only pure tastes, amended until after the imports in that is to say, those which are sour, question, that is to say in April 1978. sweet, salty and bitter. The Commission contends that those Notes and the Explanatory Notes to The olfactory cells are to be found in the the Customs Cooperation Council back nasai cavity. The nose is connected Nomenclature and the Classification to the buccal cavity through the naso- Opinions thereon are only explanatory pharyngeal cavity. Vhen one chews or or clarificatory and cannot amend the drinks, fragrant substances reach the provisions of the Common Customs olfactory cells in the course of breathing Tariff itself. Therefore the Commission through the naso-pharyngeal cavity and considers that the Notes in question are produce an olfactory sensation which not decisive for the ruling to be given on combines with the gustative sensation the questions put to the Court; the and is absorbed by the latter.

That is other headings. The essential oils and clearly demonstrated by the well-known resinoids are to be classified under apple-onion experiment: no difference in subheading 33.01 C. Other products taste is perceptible if the sense of smell is classified under Chapter 33 are neutralized by blocking the nostrils." distinguished from vegetable extracts classified under heading 13.03 by a pleasant smell or taste and are used as Consequently odoriferous and fragrant fragrant substances in the perfume substances cannot be clearly separated, industry or as flavouring substances in particularly because a large number of the food industry or constitute finished odoriferous substances are also fragrant products in themselves.

impossible. That is shown by the description of tariff heading 33.04 of the The Commission gives certain Common Customs Tariff, which, in the physiological details on human taste and German version, refers to "Riech- oder smell Aromastoftrn" ' [odoriferous or fragrant substances] in relation to the perfumen "The sense of taste is perceived b\ taste and Jood industriei. bud* » hich arc to be found mostk on the hack par. ai the tongue and root of I — l - j - . j : - · . -.-.r :- 1 -L- -,- \frvr- .'· irr :j*i·· the mouih Ho» ever, taste buds are

The Commission contends that all the fragrant constituents of a plant; in tariff headings in Chapter 33 refer to addition to the essential oils which are products characterized by their not always present, they also contain fragrance. Therefore resinoids must not soluble resins, dyes and other substances, be considered as substances intended that is to say all plant substances which exclusively for the manufacture of are soluble in the solvent used. perfume or soaps. According to the well-established The Explanatory Notes to the Customs case-law of the Court, the objective Cooperation Council Nomenclature on quaJities of products, their objective tariff heading 13.03 provide that essential characteristics and properties (judgment oils and resinoids differ from the of 10 December 1975 in Case 53/75 vegetable extract covered by tariff Belgium v Vandertaelen and Maes [1975] heading 13.03 "in that they are ECR 1647) are the decisive criteria for essentially composed of odoriferous sub- their customs classification. The stances." characteristic of resinoids consists in their fragrance. Consequently, vegetable extracts of parts of plants or fruits, The Commission considers that odor- characterized by their properties of iferous constituents and "odoriferous flavour and smell, must be classified as substances" are synonymous. The resinoids within the meaning of tariff Common Customs Tariff again equates subheading 33.Cl C of the Common odoriferous substances with fragrant Customs Tariff. substances. It follows from that that "odoriferous" is synonymous with The Commission suggests that the "fragrant" for the purpose of the questions submitted to the Court for a Customs Tariff. The Commission preliminar)' ruling should be answered as considers that, in restricting the word follows: "odoriferous" to the sense of smell and refusing to attribute it also to the sense of taste, the plaintiff is mistaken. "1. Vegetable extracts whose character is determined by their fragrance fall. as resinoids. within tariff heading The Commission believes that the tariff 33.01 of the Common Customs classification of a vegetable extract as Tariff. resinoid is determined simply by the existence of odoriferous fragrant 2. The fragrance of resinoids under constituents. Unlike the plaintiff, which tariff heading 33.01 is determined by seeks to rely only on the proportion of all the fragrant extractive substances: essential oils, the Commission considers the fact that there is a pre- that the classifiction of a vegetable ponderance in weight or quantitv of extract as resinoid depends on all of its the fragrant substances of an extract fragrant constituents and thus, apan is not a decisive factor. from essential oils, on the existence of other extractive substances, particularly the substances which confer upon the 3 Characteristic fragrant substances product its characteristic taste or smell such a' gingerol ma\ also be taKcn and determine its value, and accordingly into account lor the customs classi- its marketing and use. fication o! the vegetable extrae: as resinoid under tariff heading }}Z\. in so far as thev contribute to the Resinoids are therefore extracts which fragrant propenie« ot a vegetable contain in a concentrated ¡orm aH tne extract "

. Considering that the solution of the dispute depended essentially on the interpretation of the concepts of "vegetable extracts" and "resinoids" and on the determination of the appropriate criteria by a comparison of the respective concepts, the Bundesfinanzhof referred to the Court tor a pre- liminary ruling the following questions:

KADERS v HALTTZOLLAKfT HAMBURG-TALTERSHOF

" H o w must tariff heading 13.03 (vegetable extracts) and tariff subheading 33.01 C (resinoids) be interpreted and delimited in relation to one another? Is a product described as extract of ginger containing, in addition to 2 5 % essential oils, all the soluble contents of the ginger root to be regarded as vegetable extract coming within tariff heading 13.03 or, having regard to the amounts of odoriferous substances or fragrant constituents, as resinoid falling within tariff subheading 33.01 C, even though as vegetable extract it contains all the typical contents and constituent substances of the ginger root? In addition'to the essential oils, does for example "Gingerol" also belong to the odoriferous substances or fragrant constituents?"

s Chapter 13 of the Common Customs Tariff covers "lacs; gums, resins and other vegetable saps and extracts". According to Note (h) on the Chapter, it does not cover "essential oils, concretes, absolutes and resinoids (heading No 33.01) or aqueous distillates and aqueous solutions of essential oils". Subheading 13.03 A VIII covers "vegetable saps and extracts . . . Other".

6 Chapter 33 covers "Essential oils and resinoids; perfumen·, cosmetic or toilet preparations". Heading 33.C1, "Essential oils (terpeneless or not), concretes and absolutes; resinoids" includes subheading 33.01 C, "resinoids".

10 From those considerations it may be inferred that "essential oils and resinoids" of products which contain, apart from odoriferous substances, a far higher proportion of other plant substances, such as chlorophyll, tannins, bitter principles or other flavouring substances, carbohydrates and other extractive matter which help to determine the typical character of the product do not fall within heading 33.CI of the Common Customs Tariff.

n In particular, a product such as gingerol is not among the odoriferous sub- stances which fall within the said tariff heading, since its essential charac- teristics are determined largely by taste and not by smell.

Costs

The costs incurred by the Commission of the European Communities, which submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the action pending before the national court, costs are a matter for that court.

KADERS v HAĽPTZOLLAMT HAMBURG—WALTERS H O F

On those grounds,

For the Registrar

H. A. Rühi G. Bosco Principal Administrator President of lhe First Chamber