C-237/81

REFERENCE to the Court under Anicie 177 of the EEC Treaty by the Finanzgericht Rheinland-Pfalz [Finance Court, Rhineland-Palatinate], 'for a preliminary ruling in the action pending before that court between

ALMADENT D E N T A L - H A N D E L S - UND VERTRIEBSGESELLSCHAFT MBH,

and

HAUPTZOLLAMT [Principal Customs Office] MAINZ,

on the interpretation of subheading 38.19 K of the Common Customs Tariff, I — LincuJCf of the Cut Gcrmar

JUDGMENT OF 23. 9. 1982 - CASE 237/81

1. A white, odourless powder composed It appears from the order making the of silicic acid, ammonium phosphate, reference to the Court that the plaintiff magnesium oxide and graphite packed in the main action cleared through in sealed bags having a net weight of customs and put into free circulation 60 grams (Complete Investment); goods from the USA, declared as "modelling plaster". The defendant, the 2. A clear, light red liquid composed of Hauptzollami [Principal Customs Office] coloured water-glass put up in a Mainz, assigned to them the code plastic bottle containing 946 millilitres number 3819 740 90 (tariff subheading (Complete Liquid Concentrate) ; 39.19 U) and levied customs dunes at the raie of 14.4 Vz. 3. A rolled-up strip of light grey asbestos board about 35 millimetres wide The plaintiff objected that the goods (asbestos tape) ; and were a refractory embedding compo- sition (moulding compound) and the 4. A plastic measuring cylinder Hauptzollamt thereupon had a sample of calibrated from 1 to 40 millilitres". the goods, taken after that objection had been raised, examined by the Zolltechnische Prufungs- und Lehranstalt In accordance with General Rule 3 (b) [Customs Laborator.· and Training for the Interpretation of the No- College] (hereinafter referred to as "the menclature of the Common Customs

ALMADENT v HAUPTZOLLAMT MAINZ

Therefore subheading 38.19 U (code number the Finanzgericht Rheinland-Pfalz 3819 740 90). The report did not accept [Finance Court Rhineland Palatinate] that the goods were a refractory considered that a reference to the Court composition within the meaning of tariff of Justice of the European Communities subheading 39.19 K on the ground that for a preliminary ruling was necessary in according to the Explanatory Notes to order to clarify the interpretation of that tariff subheading a pyroscopic tariff subheading 38.19 K in regard to resistance of at least 1 500 °C deter- the concept of "pyroscopic resistance". mined in accordance with Recommen- dations R 528-1966 and R 1146-1969 of It thus referred the following question to the International Organization for Stan- the Court of Justice: dardization (known as "the ISO") is required; the imported goods did not "Must tariff subheading 38.19 K of the have that characteristic. 1979 Common Customs Tariff be construed as meaning that only products After its objection had been rejected by a having a pyroscopic resistance of at least decision of the customs authorities of 4 1 500 degrees Centigrade determined in Julv 1980, the plaintiff brought an action accordance with ISO Recommendations before the Finanzgericht to have the R 528-1966 and R 1146-1969 may be goods, put up in sets, classified in tariff classified as 'refractor)·' products for the subheading 38.19 K (code number purposes of that tariff subheading 3819 240 90) attracting a rate of duty (depending on constituent material and applicable to non-member countries of intended use)?" 3.2 % and the contested customs notice

"One ot the essential charac- by Mr Redake and by the Commission teristics of the refractor)· compositions of of the European Communities, rep- this subheading is that thev show resented by Mr Karpenstein, Legal pyroscopic resistance of 1 5ZZ 'C at least Adviser to the Commission, acting as (determined in accordance with ISO Agent, assisted by R Streckmann, tax Recommendations R52S-l96b and consultant, Hamburg. R 1146-1969)".

JUDGMENT OF 23. 9. 1982 — CASE 237/81

degrees Centigrade, is then poured into mitted pursuant t o Article the mould. In view of the use of the 20 of the P r o t o c o l on the high-temperature-resistant embedding Statute of the C o u r t of composition for the purposes of casting J u s t i c e of the EEC high-melting alloys having melting points substantially below 1 500 degrees 1. The company almadent, the plaintiff Centigrade the pyroscopic resistance of in the main action, states that the 1 500 degrees Centigrade required by the question raised by the court making the ISO recommendations is unnecessary. reference reduces the dispute to the issue Therefore the reference to the ISO of how the term "refractory" appearing recommendations for tariff classification in tariff subheading 38.19 K of the purposes is in practice inappropriate.

For the purpose of these on, that: proceedings it refers, on this point, to the explanations given by a technical "Also included in this subheading are expert, Doctor H. Marx, Professor and silica-based refractory compositions used Director of the Institut für zahnärztliche for making moulds for dental purposes Werkstoffkunde und Technologie der or for jewellery by the lost-wax process". Klinik und Poliklinik für Zahn-, Mund- und Kieferkrankheiten [Institute for It goes on to stress that the action Dental Materials and Technology of the pending before the Finanzgericht Clinic for Tooth, Mouth and Jaw- concerns the tariff classification of one Diseases] at Johannes-Gutenberg- of those siiica-based refractory compo University, Mainz. sitions used for making moulds for dental purposes b\ the lost-wax process, It is stated in the conclusions of that namely the product Complete Investment expert's report that the description of by the Jelenko company, which it has the product Complete Investment as imported for a number of years "modelling plaster" is unjustified because

it is materially incorrect and, in view of part of the Explanatory Notes to the the composition and use of the product, Customs Tariff of the European which for years has been used for Communities which relates to tariff making moulds for dental purposes, it subheading 38.19 K. must be assimilated in principle to a re- fractory composition, since it may l>e In the Commission's view the question used /or the casting of high-melting raised by the Finanzgericht enables the alloys having melting points between 900 issue to be confined to the question and 1 260 °C, even if it does not whether the term "refractory" appearing completely achieve a pyroscopic in the wording of subheading 38.19 K resistance of 1 500 °C required by the should be construed as a technical ISO recommendation. criterion which is fixed once and for all or whether it is merely necessary for a almadent considers that it is clearly product to be able to tolerate tempera- demonstrated both by the practice tures corresponding to the use for which adopted until now by the customs auth- it is intended: in other words whether orities and by the Explanatory Notes the term "refractory" must be construed mentioned above that silica-based re- absolutely or relatively.

the products known on the German market might well be among those which However, in the Commission's view that are precluded from the benefit of tariff common acceptation of the term "heat- subheading K . . ., although this has not resistant" ceases to be valid where it is been verified for the reasons set out sought to lay down a criterion for above. making a valid distinction between products summarily described as pyro- Finally, almadent considers that it does scopic. From a scientific and technical not promote the cutting of costs in the point of view that term must therefore be health sector to levy high customs duties reserved to non-metallic products which on products such as Complete Invest- can tolerate temperatures of at least ment: the plaintiff company would be 1 500 °C. compelled, in common with competing companies, to pass on costs of more than In that connection the Commission cites ID 5/o imposed on them, which can only several definitions of elements displaying lead io a further increase in the costs of pyroscopic resistance from encyclo-

JUDGMENT OF 23. 9. 1982 — CASE 237/81

1 500 °C. 1 500 C C mentioned above, thereby using The Commission points out that in the a generally recognized figure. In Explanatory Notes to tariff subheading adopting this approach, the Explanatory 38.19 K the Community adopted the Notes did not amend the Common latter definition of pyroscopic resistance Customs Tariff, but they interpreted and which is uniformly recognized in elucidated it within permissible limits. scientific and technological circles. In the Commission's view, although It maintains in that connection that to the product in question, moulding adopt a temperature threshold lower or compound, shows resistance to heat, it higher than 1 500 °C in order to define cannot, given its intended use and the pyroscopic resistance for the purposes of technical process in which it is used, be the Common Customs Tariff would, described as refractory since in any event regard being had to the consensus of it does not have to resist temperatures views existing within scientific and higher than 1 400 °C. technical circles, be arbitrary and unjus- tifiable and would give rise to uncer- The Commission further remarks that tainties and disputes in the carrying out the third paragraph of the Explanatory of customs formalities. Notes to tariff subheading 38.19 K which In the Commission's view, an approval states that also included in that sub- based on relative factors as advocated by heading are "silica-based refractory the plaintiff in the main action might be compositions used for making moulds acceptable to traders but would be of for dental purposes" does not mean that little use for the purposes of the in- compounds for making moulds for terpreting the Common Customs Tariff dental purposes or for jewellery auto- which may only be done on the basis of matically come under that subheading. objective and uniform criteria as is That would only be possible if they were demonstrated by the decision of the "refractory" in the sense in which that Court of Justice in its judgment of term is used in the first paragraph of the 28 March 1979 in Case 158/78, Biegi v Explanatory Note to subheading Hauptzollamt Bochum [1979] ECR 1103, 38.19 K, that is to say if they were to (last sentence of paragraph 8 of the show a resistance to heat of at least

ALMADENT v HAUPTZOLLAMT MAINZ

which is made to it in the fourth The Commission therefore proposes that paragraph. ("This subheading does not the Court should give the following reply include non-refractory preparations such to the Finanzgericht Rheinland-Pfalz: a s . . .")· Refractory compsitions covered by sub- In the Commission's view the purpose of heading 38.19 K of the Common the third paragraph of the Explanatory Customs Tariff must have a pyroscopic Note is to state that the term "refractory resistance of at least 1 500 °C. Pyro- compositions" covers not merely scopic resistance is to be determined in materials such as cement and mortar accordance with ISO Recommendations which are handled in bags and in large R 528-1966 and R 1146-1969. quantities but also those materials which are processed in very small quantities, for instance in laboratories used by dental technicians and jewellers. Its purpose is I l l — Oral procedure therefore first and foremost to prevent an incorrect interpretation of the term The plaintiff in the main action, "similar" used in subheading 38.19 K. represented by Claus-Michael Redeke, The Commission considers that the Rechtsanwalt, Mainz, and the Com- product in question is indeed manu- mission of the European Communities, factured from silica which is in itself a represented by its Legal Adviser, Peter refractor)' substance but through the Karpenstein, presented oral argument at addition of other materials its resistance the sitting on 17 June 1982. The rep- to heat is reduced below the threshold of resentatives of the plaintiff and the pyroscopic resistance. The result of that Commission, as well as Mr Staub, the consideration is to prevent the product Commission's expert, replied to the from being classified in subheading questions put to them by the Court. 38.19 K and to cause it to be classified under subheading 38.19 U of the The Advocate General delivered his Common Customs Tariff. opinion at the sitting on 8 July 1982.

4 The Hauptzollamt maintains on the other hand that the fact that the product in question shows a pyroscopic resistance of less than 1 500 °C deprives it of its "refractory" nature for the purposes of the first paragraph of the Ex- planatory Note to the same subheading 38.19 K which, by reason of its generality, must also apply to the products referred to in the third paragraph of the Explanatory Note in question.

s In order resolve thai dispute the Finanzgericht referred the following question to the Court:

"Must tariff subheading 38.19 K of the 1979 Common Customs Tariff be construed as meaning that only products having a pyroscopic resistance of at least 1 50C °C determined in accordance with ISO Recommendations R 528- 1966 and R 1146-1969 may be classified as 'refractory' products for the purposes of that tariff subheading (depending on constituent material and intended use) 5 "

b It is stated in the Explanatory Note to subheading 38.19 K:

' O n e of the essential characteristics of refractory compositions of this sub- heading is that they sho* a pyroscopic resistance of 1 500 °C at least (determined in accordance with ISO Recommendations R 528-1966 and R 1146-1969).

ALMADENT v HAUTTZOLLAMT MAINZ

JUDGMENT OF 23. 9. 1982 — CASE 237/81

n It follows that subheading 38.19 K of the 1979 Common Customs Tariff is to be interpreted as meaning that only products having a pyroscopic resistance of at least 1 500 degrees Centigrade may be classified amongst the "re- fractory compositions" mentioned in that subheading.

Costs

12 The costs incurred by the Commission of the European Communities which submitted observations to the Court, are not recoverable. As the 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,

T H E COURT (Second Chamber)

299: