C-295/81

J U D G M E N T O F T H E C O U R T (SECOND CHAMBER) 30 SEPTEMBER 1982 '

International Flavors and Fragrances IFF (Deutschland) GmbH v Hauptzollamt Bad Reichenhall (reference for a preliminary ruling from the Bundesfinanzhof)

Case 295/81

Common Customs Tariff— Tariff headings — Interpretation — General Rule 2 (a) — Article imported unassembled or disassembled — Concept — Fruit-juice concentrates and flavour concentrates — Products not covered by that concept

The second sentence of Rule 2 ťa) of the black-currant flavour concentrate, General Rules for the Interpretation of extracted from those fruiu may not be the Nomenclature of the Common regarded as anieles imported un­ Customs Tariff must be interpreted assembled or disassembled, even if the as meaning that mahaleb-cherry concen­ fruit-juice concentrales and flavour trate and black-currant concentrate, on concentrates, dealt in at the same price, the one hand, and, on the other, are mixed together again immediately mahaleb-cherry flavour concentrate and before use or bottling.

In Case 295/81

on the interpretation of the second sentence of General Rule 2 (a) for the Interpretation of the Nomenclature of the Common Customs Tariff,

THE COURT (Second Chamber)

composed of: O. Due, President of Chamber, A. Chloros and F. Grévisse, Judges,

Advocate General: Sir Gordon Slynn Registrar: H. A. Rühi, Principal Administrator

gives the following

JUDGMENT

The Schwarzbach-Autobahn customs whether the fruit juice concentrates, on office issued provisional notices and the one hand, and the flavour classified the mahaleb cherry concentrate concentrates, on the other, are to be in subheading 20.07 B II (a) 6 (aa) (pref- regarded as "unassembled or disas- erential rate of 17%), the black-currant sembled" anieles ["zerlegte" Waren] concentrate in subheading 20.07 B II (a) 6 within the meaning of that provision.

On the and that the black-currant concentrate other hand, if they are to be considered as had a densitv of 1.381, the customs office "unassembled or disassembled", it follows amended the provisional notices by that, pursuant to the second sentence of decisions of 30 January and 22 May 1975 General Rule 2 (a) for the Interpretation and classified the fruit juice concentrates of the Nomenclature of the Common in subheading 20.07 A III (a) (rate of Customs Tariff, the proportionally appro- 42%) and in addition applied the normal priate mixture of fruit juices and flavour rate of 8% to the mahaleb cherry flavour concentrate has an aggregate density, in concentrate because, in the case of the first view of the low density of the flavour consignment, no supporting document concentrate, of 1.33 at 15° C. or an even proving entitlement to preferential lower densin·, which entails classification treatment had been produced. in subheading 20.07 B II (a) 6 (aa) or (bb), An objection made to the Bad Reichenhall as the case may be. customs office was dismissed as In those circumstances, the Bundes- unfounded. finanzhof decided, by order of 20 October An application to the Finanzgericht 1981, to stav the proceedings and to ask München [Finance Court, Munich] was the Court of Justice to give a ruling on the also unsuccessful. following question: When the plaintiff appealed on a point of "Is the second sentence of Rule 2 (a) of law, the Bundesfinanzhof [Federal the general Rules for the Interpretation oi Finance Court] held that adjudication on the Nomenclature of the Common the legality of the contested decisions Customs Tariff io be interpreted as depended on the interpretation of the meaning that mahaleb cherry concentrate second sentence of General Rule 2 (a) for and black-currant concentrate made of the Interpretation of the Nomenclature of mahaleb ehern luice and black-currant the Common Customs Tariff; the wording juice respectively, on the one hand, and of that rule is as follows: mahaleb ehern flavour concentrile and "Any reference in a heading to an anide black-currant flavour concentrate, on the shall be taken to include a reference io other, are to be regarded as ameles

November 19*1 Rule), imponed unassembled or Pursuant to Anicie 22 of the Protocol on disassembled ['zerlegt gestellt wird']" the Statuie of the Coun of Justice o: me It is a question therefore of determining EEC. antien oDservauor.s were SUP-

mined by International Flavors, rep 1. According to the pLintiffin the main resented for that purpose by Mr Kulmsee proceedings, General Rule 2 for the and Mr Thorneshoff, and by the Interpretation of the Nomenclature of Commission of the European Communi the Common Customs Tariff attributes ties, represented by Mr R. Wagenbaur, decisive importance to the concept of acting as Agent. "article". It points out that the rule deals with "articles" which must be Upon hearing the report of the Judge- mentioned, incomplete or unfinished, in Rapporteur and the views of the a specific heading of the tariff provided Advocate General, the Court decided to that they have "as imported, . . . the open the oral procedure without any essential character of the complete or preparatory inquiry.

the form in which those products are that fact is also properly stressed in the imported, constitute a single market Explanatory Notes to the Customs or two separate markets, one for each Cooperation Council Nomenclature of the products? (hereinafter referred to as "the Explana 2. (a) What is the precise process tory Notes") in respect of General Rule whereby the two substances (the 2 (a). Any limitation of that provision to concentrate and the correspond specific goods is expressly avoided and ing flavour concentrates) are therefore all the articles in Sections 1 to

That wide view of the 4. Can the Commission confirm that the concept of aniele is supported by the two components (iuice concentrates opinion of the Commission and of the and flavour concentrates) are dealt in Advocate General in Case 165/78 and sold together* IMCO-Michaelu judgment of the Court ot Justice of 29 May 1979, [1979] ECR Answers *rrr psen to those questions IS37). In that regard, the plaintiff in the «mhin the prrsinnrd prnoJ main proceedings observes thai there has been support for the view that prior to the introduction of General Ruie 2 (ai. II — 4 fii:rr nb»f n J î i i ' i n sub· u nich was adopted on 1 January 1972. a mutril pursuan: t o A n u i ť provision pi the same kind existed only 2 Z o l t nr ('rot o t o l or. t h e » ith respect to the articles in Sections Statuir i»l t hr Court ol XVI and XVII ot the Common Customs J u M . v r ol ¡nr I I C

Tariff and that the latter rule was In that regard, the plaintiff in the main extended, by the adoption of General proceedings sutes that, in its judgment Rule 2 (a) for the Interpretation of the of 29 May 1979 in Case 165/78, the Nomenclature of the Common Customs Court of Justice has already held that Tariff, to all the goods in that tariff. General Rule 2 (a) covers articles not yet The plaintiff in the main proceedings assembled as well as articles which have admits that the application of that been disassembled. Thus, the answer to general rule to liquids presupposes in the question now submitted to the Court addition the existence of the other of Justice cannot be dependent on the characteristics referred to in the first fact that fruit juice is a natural product sentence of General Rule 2 (a) for the and prima facie constitutes a complete Interpretation of the Nomenclature of article. Consequently, the fact that no

It points out sembled" ["zerlegt"] must take into that the second sentence of General Rule account the fact that that concept is very 2 (a) for the Interpretation of the wide and thai, according to linguistic Nomenclature of the Common Customs usage, it may also extend to the Tariff takes account of that general separation, brought about bv physical concept of customs law in so far as means, of the components of a liquid. goods "imported unassembled or That fact is also explained in paragraph disassembled" must, taken as a whole, be X of of the Explanatory Notes (p. ÍR accorded the same tariff classification as

the tariff is possible. The fact that ameles in a "mixed or composite state" are The plaintiff in the main proceedings treated in the same way in the Expla- maintains that that view, namely that natory Notes also shows thai the ameles constituting a single entity must definition or "article" laid donn in be classified in the same heading upon General Rule 2 (a) is universal and imponation, regardless of differing therefore, specificala, that liquids too means of transpon and even where may be "imported unassembled or they are imponed "unassembled or disassembled" ["zerlegt"]. disassembled", applies as a matter of

principle to all anieles which, for purely re-mixed immediately before use or technical reasons, it is quite possible to bottling. import "unassembled or disassembled". As regards fruit juice, it is appropriate to 2. The Commission of the European mention that the importation of that Communities points out that if, in product is not technically possible, in defining the concept of an article usual commercial quantities, without "imported unassembled or disassembled" "dissassembly".

economically senseless. It points out that unassembled or disassembled", unless it the importation of fruit juice is not is still possible to identify the parts of the possible unless the juice obtained in the assembled article (after assembly as well first place by pressing the fruit is as before). concentrated; then, to avoid losses of According to the Commission, that is not aroma, the concentrated juice and the the case where fruit juices and flavour flavour concentrate must be separated. It concentrates are mixed.

In that case, there hand, flanou* voncemrair o· T.ahaleb can be no question of literally classifying cherries or b u o «.urranis. J f u r ű from any particular product as an article mahaleb cherra iun.e or h:aci». currani "imported unassembled or disassembled" luice. is jn„;ri imported unassembled — it is not just one article (imported or disassembled, since lhe îruit-iuice unassembled or disassembled), but concentrate» ir¿ fumeur concer.irites. several anieles with different properties, žihich ire uri : •-. a: tr.e sarte prue, are even if in practice those anicies are

usually intended to be mixed with each emphasized that those more precise other in specified proportions (which is formulations — as compared with the not necessarily always the case). wording of the German version — clearly show that the anieles in question The Commission notes that the above must be ones whose components have conclusion may be called in question on been separated after mechanical assembly the ground that — as admitted by the ("disassembled" or "demontē") or which Bundesfinanzhof and earlier by the must in fact be assembled in the first Finanzgericht Munich — the concepts of place ("unassembled" or "non monté"). "disassembled" and "unassembled" also include separation of the components of Finally, according to the Commission, a liquid by a physical process. The the Explanatory Notes dearly favour the German version of the second sentence interpretation which it proposes to give of General Rule 2 (a) for the Interpret­ of the second sentence of General Rule 2 ation of the Nomenclature of the (a) for the Interpretation of the Common Customs Tariff may therefore Nomenclature of the Common Customs give the impression that liquids may Tariff. also be imponed "unassembled or disassembled". However, according to According to paragraph VI of the the Commission, the same impression is Explanatory Notes, anieles the com­ not given by the other language versions ponents of which are to be assembled of the second sentence of that rule. It either by means of a simple fixing device refers to the case-law of the Court of (screws, nuts and bolts, etc) or, for Justice which indicates that the other example by riveting or welding, where versions must be taken into account, only simple assembly operations are since the Common Customs Tariff, like involved, must be regarded as all Community law, has binding force unassembled or disassembled. not in one language only but in six languages. In that respect, the Com­ It is therefore a question of determining mission refers to the rule of in­ whether the unassembled or disassembled terpretation to the effect that any less aniele may be convened into a finished precise version must be read in the light aniele by mere mechanical assemblv. It is ol the clearer versions (Case 118/76 not stated that the term assembly also Klockner [1977] ECR 1047, in particular covers mixing or stirring. ai p 1"35) It points out that, if that procedure is adopted, it becomes clear Moreoser, the Commission adds that that the other language versions are paragraph VII ot the Explanatory Notes formulated with considerably greater ir. question e\prrssls sutes tnat that ciaruy man the German version provision doe* no: ¿ppis to products in Sections I to Vi iCrup:ers 1 to 3Si and that jltnouc?· tr.r irrn,r. version, includes English "unassembled or disassembled" the expression ' rr ^r".rra!". the Enghsh version state» > jtrcor „· ·. "Ir. sie» of Dutch "qedemonteerde of in niet ge­ the »cone ' r e n : '.c* o! Section I to monteerde staat" Vi o! t"r V · —<·-, a:.;:r :ni> Rjic does no: ipp1·. to p·».-,!' ,·· :T»r Sections" Iulian "smontato o non montate" Trie Cemrr.;·,-.·: ¡-r-r'orr propose» that French "a l'etat demente ou non tne «je»!iv .- >-r•.-··..:u J r»·. -.c Bundes- monte" íir.j.-.inoi » V U . Ĺ :H ¿ns» c e c J» tolios» s:

mahaleb cherry or black-currant juice, As regards the reasons for the separation on the one hand, and the flavour of fruit-juice concentrates, the Com- concentrate of mahaleb cherries or black mission considers that the decision currants, on the other hand, which are whether or not to use that process re-mixed immediately before use or depends on the desired quality, the bottling may not be considered as articles possibilities of storage and transpon and imponed "unassembled or disassembled" the calculated costs. Where the concen- within the meaning of the second tration process is used, it is essential to sentence of General Rule 2 (a) for the separate the flavour concentrates since Interpretation of the Nomenclature of they would otherwise be destroyed the Common Customs Tariff." during the process. Finally the Commission observes that in Ill — Answers to the questions those cases where the juice concentrate put by the Court and the flavour concentrates are intended to be mixed in order to produce In its written answers to the questions fruit juice, it is usual for them to be dealt put by the Court the Commission in together. Otherwise the products are observes, with regard to the markets for dealt in separately. fruit-juice concentrates and flavour concentrates, that each of those products can be used separately and consequently, IV — Oral procedure depending on what use is intended, three different markets are available for the juice concentrates and flavour concen- At the sitting on 17 June 1982 oral trates. argument was presented for the applicant by Lothar Kulmsee, Rechtsanwalt of As regards the details of the process for Düsseldorf, and for the Commission of separating the two substances, the the European Communities by Rolf Commission quotes an article on the Wägenbaur, a member of its Legal subiect and sutes that the description Depanment, acting as Agent and the contained in it reflects the most up-to- panies answered questions put by the date technology. The reverse procedure, Court. namely re-constitution of the non- concentrated fruit juice, is carried out in The Advocate General delivered his mixers, with the addition of water. opinion at the sitting on 15 July 1982.

4 The dispute centres on the question whether the fruit-juice concentrates and flavour concentrates in question must be regarded as articles "imported unassembled or disassembled" as provided for in the above-mentioned general rule for interpretation. If that were the case, the fruit-juice concentrates and flavour concentrates would have to be classified in sub- heading 20.07 B II (a) 6 (aa) (mahaleb-cherry juice) or (bb) (black-currant juice), the result of which would be to make the applicable rates 17% and 18% respectively.

s In order to resolve this problem, the Bundesfinanzhof referred the following question to the Court for a preliminary ruling:

"Is the second sentence of Rule 2 (a) of the General Rules for the Interpret- ation of the Nomenclature of the Common Customs Tariff to be interpreted as meaning that mahaleb-cherry concentrate and black-currant concentrate made of mahaleb-cherry juice and black-currant juice respectively, on the one hand, and mahaleb-cherry flavour concentrate and black-currant flavour concentrate, on the other, are to be regarded as anieles imponed unassembled or disassembled ('zerlegt'), if the fruit-juice concentrates and flavour concentrates, dealt in at the same price, are mixed together again immediately before use or bottling?"

JUDGMENT OF 30. 9. 1982 — CASE Î95/81

6 It is necessary therefore to consider whether the fruit-juice concentrates and flavour concentrates in question must, when produced to the customs auth- orities, be regarded as products which are "unassembled or disassembled" within the meaning of General Rule 2 (a).

IFF v HAUPTZOUAMT BAD REICHENRMJ.

ij As a result, for the purposes of tariff classification at the time of importation, it is wholly unnecessary to consider the possibility that the liquids may be mixed or "assembled" when such a procedure is neither necessary nor clearly certain to take place.

M That interpretation is moreover confirmed by paragraph VI of the Explana- tory Notes to the Customs Cooperation Council Nomenclature, according to which anieles whose various components are intended to be assembled either by simple means (nuts, bolu and the like) or, for example, by riveting or welding, must be regarded as unassembled or disassembled.

is Moreover, according to paragraph VII of those Notes, the contested rule does not generally apply to the products in Sections I to VI (Chapters 1 to 38 of the Common Customs Tariff).

\t It is therefore appropriate to state in reply to the national court that the second sentence of Rule 2 (a) of the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff must be interpreted as meaning that mahaleb-cherry concentrate and black-currant concentrate, on the one hand, and, on the other, mahaleb-cherry and black-currant flavour concentrates, extracted from those fruits, may not be regarded as articles imported unassembled or disassembled, even where the fruit-juice concentrates and the flavour concentrates, which are sold at the same price, are mixed immediately before use or bottling.

Costs

Due Chloros Grévisse

Delivered in open court in Luxembourg on 30 September 1982.

J. A. Pompe O. Due Deputy Registrar President of the Second Chamber

OPINION OF ADVOCATE GENERAL SIR GORDON SLYNN DELIVERED ON 15 JULY 1982

My Lordi, (1) the cherry concentrate under sub- heading 20.07 B II a 6 (aa) of the Common Customs Tariff (the CCT); in October 1974 International Flavors and Fragrances IFF (Deutschland) GmbH imported into Germany from (2) the black-currant concentrate under Yugoslavia a consignment of 40 barrels sub-heading 2C.C7 B II a 6 (bb); of mahaleb-cherry concentrate and 4 barrels of mahaleb-cherry flavour con- centrate. In March 1975 it imponed (3) the two flavour concentrates under another consignment, comprising 28 sub-heading 33.04. barrels of black-currant concentrate and 4 barrels of black-currant flavour concentrate. The German customs auth- orities provisionally classified the goods Samples of the goods were taken and as follows sent to the customs laboratory for