C-208/81

JUDGMENT OF THE COURT (FIRST CHAMBER) 1 JULY 1982 '

Pake & Haentjens BV v Inspecteur der Invoerrechten en Accijnzen, Rotterdam (references for a preliminary ruling from the Tariefcommissie, Amsterdam)

( C o m m o n Customs Tariff — O a t s )

Joined Cases 208 and 209/81

Common Customs Tariff — Tariff headings — Heading 10.04 and subheadings 11.02 B I (a) 2 (aa) and 11.02 B I (a) 2 (bb) — Classification of oat grains — Criteria

1. Oat grains whose tips have been grains and partly of broken-off tips broken off must be classified under must be classified under heading subheading 11.02 B I (a) 2 (aa) of the 10.04 of the Common Customs Tariff Common Customs Tariff. if the quantity of broken-off tips is not negligible in relation to that of the 2. A consignment of oats consisting clipped grains. partly of clipped and partly of undipped grains must be classified 3. Oat grains which have merely been under subheading 11.02 B I (a) 2 (aa) clipped must be classified under sub- if the clipped grains exceed 5 0 % by heading 11.02 B I (a) 2 (aa); oat weight of the total consignment; a grains which have undergone more consignment of oats consisting partly extensive hulling must be classified of clipped grains, partly of undipped under subheading 11.02 B I (a) 2 (bb).

INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN (Inspector of Customs and Excise), ROTTERDAM,

on the interpretation of heading 10.04 and subheading 11.02 B I (a) 2 (aa) of the Common Customs Tariff,

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

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

Advocate General: S. Rozès Registrar: P. Heim

gives the following

Palte & Haentjens BV, after first lodging The judgments making the references objections with the said Inspector, then were received at the Court Registry on aopealed against both those decisions to 13 July 1981. the Tariefcommissie which, by judgments of 3 July 1981, stayed proceedings in both cases until the Court of Justice had Pursuant to Article 20 of the Protocol on given a preliminary ruling on the the Statute of the Court of Justice of the following question (exactly the same EEC, written observations were question was submitted in both cases) : submitted by Palte & Haentjens BV, represented in Case 208/81 by I. H. Wildeboer of the firm of advocates Van " 1 . Should oat grains which after being Doorne & Sjollema, Rotterdam, and in harvested are simply threshed, Case 209/81 by G. H. Warning of the stored, loaded and transported, as a Amsterdam Bar, and by the Commission result of which the tips are broken of the European Communities, rep- off, be classified in heading 10.04 of resented by its Legal Adviser, R. the Common Customs Tariff or in Wägenbaur, acting as Agent, assisted by subheading B I (a) 2 (aa) of heading T. van Rijn a member of its Legal 11.02? Department.

II — W r i t t e n o b s e r v a t i o n s sub- regular cracking of the grains and mitted to the C o u r t exposure of a part of the kernel of a fairly high proportion of grains following clipping of the tips; The observations submitted by Palte & Haentjens BV, in Case 208/81 and in Case 209/81 are almost identical. a very high percentage (at least 75%) of grains which no longer have tips. Palte & Haentjens B V states that the oats at issue are not clipped oats, within the meaning of the Common Customs Palte & Haentjens BV adds that the Tariff. The modern, rapid, and con- samples taken from the consignments sequently somewhat rough, methods at issue were submitted to the used in the harvesting, threshing, storage Zolltechnische Prüfungs- und Lehranstalt and transport of grain cause the tips of (Customs Laboratory and Training oat grains to be broken off. That fact College), Hamburg, which stated that does not however provide sufficient the oats, made up of "grains a small grounds for concluding that oats so number of which (around 10 to 15%) affected must be regarded as clipped have lost their bracteal tips" and not oats. They are in fact ordinary oats containing "grains of clipped oats (grains which have not been worked in any way, from which the tips have been purchased and sold as such, whereas removed)", should be classified in tariff clipped oats are the result of treatment in heading 10.04. clipping machines specially designed for that purpose. As regards the first question, Palte & Haentjens BV observes that, according In recent years, there have been no to the general scheme of the Common Community imports of clipped oats Customs Tariff, a tariff heading (or coming from non-member countries. In subheading) may not include an item Australia, whence the oats at issue come, which does not at the same time fall clipping machines for the export of within the chapter or section in which clipped oats do not even exist. that heading (or subheading) is comprised. According to Palte & Haentjens BV, experts in the cereals trade are able by visual examination to recognize and The question at issue in this case is distinguish clipped oats from oats whether the goods in question fall within damaged by normal handling. Chapter 10 or within Chapter 11 of the Common Customs Tariff.

from those provisions as a whole that not sliced or kibbled" and that hulling is cereals which, like the oats at issue, have defined in the case-law of the Court as not undergone further treatment after an operation whereby the pericarp is threshing or winnowing or both, must be wholly or partially removed. The grains classified in Chapter 10 of the Common referred to in the questions submitted Customs Tariff, regardless of the fact have not undergone any such treatment that the tips may have been broken off and are not therefore hulled grains. the grains as a result of threshing, winnowing or other handling connected with storage, loading or transport. For the reasons given above, Palte & Haentjens BV is of the opinion that the goods in question are absolutely Chapter 11 refers to "products of the excluded from Chapter 11 of the milling industry" which, according to the Common Customs Tariff and may Customs Cooperation Council Expla- therefore be classified only in heading natory Note on that chapter are derived 10.04 thereof. from cereals classified in Chapter 10 which have undergone milling or the treatments mentioned in the various Such an answer to the first question headings of Chapter 11. renders the second question devoid of

into account. Clipping is not included in the wording of the headings in Chapter 11. Clipped oats may therefore only be As regards the third question, Palte & classified in a heading in Chapter 11 if Haentjens BV, having stated that it is they have undergone one of the unconnected with the two preceding treatments mentioned therein, which is questions and moreover is irrelevant to not the case here. the legal problem raised, replies that tariff subheading 11.02 B I (a) 2 (bb) is inapplicable because hulling is always The second reason for the inapplicability accompanied by clipping. of heading 11.02 is the fact that the oats in question have not undergone any of the treatments listed in that heading. The Commission concedes that there may Since, according to General Rule A for be a temptation to say, in response to the the interpretation of the tariff, the terms first question, that since the goods of the headings are determinative for concerned have not undergone any legal purposes, oats which have not treatment after threshing, they must be undergone any special clipping treatment classified in heading 10.04 of the may not be classified in heading 11.02. Common Customs Tariff.

JUDGMENT OF 1. 7. 1982 — JOINED CASES 208 AND 209/81

Having replied in the affirmative to the "1. Oat grains which have no tips when first question, the Commission goes on imported must be classified in sub- to deal with the second question, in heading B I (a) 2 (aa) of heading which the Tariefcommissie asks what 11.02 even if, after harvesting, they percentage of clipped grains must be have merely been threshed, stored, present in a consignment of oats to loaded and transported.

PALTE te HAENTJENS v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN

2 The questions arose in two actions concerning the tariff classification of consignments of oats imported into the Netherlands from Australia by the forwarding agents Pake & Haentjens BV, which declared them as "oats" classified in heading 10.04 of the Common Customs Tariff, whereas the Inspecteur der Invoerrechten en Accijnzen [Inspector of Customs and Excise] subsequently took the view that the goods in question were "clipped oats" and should be classified in subheading 11.02 B I (a) 2 (aa) of the Common Customs Tariff.

JUDGMENT OF 1. 7. 1982 — JOINED CASES 208 AND 209/8!

3 Heading 10.04 of the Common Customs Tariff ("oats") is in Chapter 10 of the tariff which according to the introductory note thereto, covers only "those grains which have been neither hulled nor otherwise worked". Sub- heading 11.02 B (a) 2 (aa) on the other hand is in Chapter 11 which relates inter alia to "products of the milling industry" and within that chapter forms part of heading 11.02 B concerning "hulled grains, (shelled or husked) whether or not sliced or kibbled."

4 The questions submitted to the Court by the Tariefcommissie are as follows:

" 1 . Should oat grains which after being harvested are simply threshed, stored, loaded and transported, as a result of which the tips are broken off, be classified in heading 10.04 of the Common Customs Tariff or in subheading B I (a) 2 (aa) of heading 11.02?

2. If the product described in Question 1 should be classified in subheading B 1 (a) 2 (aa) of heading 11.02, does there then apply to such a consignment of oat grains, consisting partly of clipped and partly of undipped grains, a percentage of clipped grains above which the consignment must be classified in subheading B I (a) 2 (aa) of heading 11.02 and below which it must be classified in heading 10.04? Does the fact that there are broken-off tips in the consignment have any effect on classification?

8 In the second question the Court is asked to indicate the criteria upon which must be based the classification of a consignment of oats composed partly of clipped and partly of undipped grains and to state whether the presence of broken-off tips in the consignment has any effect on classification.

9 Clipped grains as such fall within subheading 11.02 b I (a) 2 (aa) of the Common Customs Tariff; undipped grains fall within heading 10.04. Recourse must therefore be had to General Rule No 3 (b) for the Interpret- ation of the Nomenclature of the Common Customs Tariff, concerning mixtures, according to which such products are to be "classified... as if they consisted of the material. . . which gives the goods their essential character". It may reasonably be considered that clipped oats give a mixed consignment its essential character where the clipped grains exceed 50 % by weight of the total consignment.

io However, the fact that the broken-off tips remain within the consignment deprives it of its character of a mixture since in such circumstances the clipped grains can no longer be regarded as "clipped oats" within the meaning of subheading 11.02 B I (a) 2 (aa) of the Common Customs Tariff.

n In fact, as is apparent from paragraph (7) of the Explanatory Note to heading 11.02 in the Customs Cooperation Council Nomenclature, "Clipped grain (principally oats)" is "grain which has been clipped to facilitate ingestion by livestock". That definition necessarily presupposes that the broken-off tips have been separated from the clipped grains. If that were not

is The answer to the second question must therefore be that a consignment of oats consisting partly of clipped and partly of undipped grains must be classified under subheading 11.02 B I (a) 2 (aa) if the clipped grains exceeded 5 0 % by weight of the total consignment and that a consignment of oats consisting partly of clipped grains, partly of undipped grains and partly of broken-off tips must be classified under heading 10.04 of the Common Customs Tariff if the quantity of broken-off tips is not negligible in relation to that of the clipped grains.

ie As regards the third question, it should be noted that, as the Common Customs Tariff now stands, a reply to that question is of no practical

PALTE & HAENTJENS v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN

importance, since the rate of duty prescribed by the Common Customs Tariff is the same for subheading 11.02 B I (a) 2 (aa) as for subheading 11.02 B I (a) 2 (bb). It should nevertheless be pointed out, in so far as may be relevant, that clipping constitutes a kind of less extensive hulling, which removes only the extremities from the grains and not a large part or all of the pericarp. It follows that subheading 11.02 I (a) 2 (aa) refers only to clipped grains whereas subheading 11.02 B (a) 2 (bb) refers to oat grains which have been subjected to a hulling process which is more extensive than mere clipping.

i7 It is appropriate therefore to answer the third question to the effect that oat grains which have merely been clipped must be classified under subheading 11.02 B I (a) 2 (aa); oat grains which have undergone more extensive hulling must be classified under subheading 11.02 B I (a) 2 (bb).

2. A consignment of oats consisting partly of clipped and partly of unclipped grains must be classified under subheading 11.02 B I (a) 2 (aa) if the clipped grains exceed 50% by weight of the total consignment; a consignment of oats consisting partly of clipped grains, partly of unclipped grains and partly of broken-off tips must

OPINION OF MRS ROZES — JOINED CASES 208 AND 209/81

be classified under heading 10.04 of the Common Customs Tariff if the quantity of broken-off tips is not negligible in relation to that of the clipped grains.

3. Oat grains which have merely been clipped must be classified under subheading 11.02 B I (a) 2 (aa); oat grains which have undergone more extensive hulling must be classified under subheading 11.02 B I (a) 2 (bb).

Bosco O'Keeffe Koopmans

Delivered in open court in Luxembourg on 1 July 1982.