C-185/83

In Case 1 8 5 / 8 3

R E F E R E N C E t o the C o u r t u n d e r Article 177 of t h e E E C T r e a t y b y the Tarief commissie [Administrative court of last instance in revenue matters], A m s t e r d a m , for a preliminary ruling in the proceedings pending before that court between

INTERFACULTAIR INSTITUUT ELECTRONENMICROSCOPIE [Interfaculty Institute for E l e c t r o n M i c r o s c o p y ] O F T H E UNIVERSITY OF G R O N I N G E N

and

INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN [Inspector of C u s t o m s and Excise], G R O N I N G E N ,

o n t h e validity of C o m m i s s i o n Decision 8 1 / 8 4 3 / E E C of 8 O c t o b e r 1981 establishing that t h e a p p a r a t u s described as " J E O L electron microscope, model J E M - 2 0 0 C X " m a y n o t be imported free of C o m m o n C u s t o m s Tariff duties (Official J o u r n a l 1 9 8 1 , L 314, p. 15),

Facts and issues

The facts of the case, the course of the lation (EEC) No 1027/79 of 8 May 1979 procedure and the observations sub- (Official Journal 1979, L 134, p. 1) and mitted under Article 20 of the Protocol Commission Regulation (EEC) No on the Statute of the Court of Justice of 2784/79 of 12 December 1979 laying the EEC may be summarized as follows : down provisions for the implementation of the above-mentioned regulation I — L e g a l c o n t e x t of the pro- (Official Journal 1979, L 318, p. 32). c e e d i n g s a n d facts

Annex D to the Florence Agreement includes, subject to certain reservations, "scientific instruments or apparatus, intended exclusively for educational purposes or pure scientific research". or private scientific or educational establishments authorized by the competent authorities of the Member States to receive such Consequently, in order to facilitate the articles duty free." free exchange of ideas and scientific research within the Community, the Council adopted Regulation N o 1798/ 75, which provides for the possibility of importing into the Community certain educational, scientific and cultural materials free of Common Customs In order to obtain the duty-free Tariff duties. Whilst Article 1 of Regu­ admission under Article 3 (1) of Regu­ lation No 1798/75 provides that some of lation _ N o 1798/75, the recipient those materials are to be admitted free of establishment or organization must Common Customs Tariff duties whatever therefore demonstrate that the scientific their intended use, and whilst Article 2 instrument or apparatus in question is thereof provides that other materials intended exclusively for educational must be intended either for certain public purposes or for pure scientific research. establishments and organizations or for certain establishments or organizations which may be otherwise approved, according to Article 3 (1) thereof, as amended by Article 1 of Regulation (EEC) No 1027/79, a third category of Article 7 (1) of Regulation No 2748/79 scięntific_mstruments_and apparatus not of the.. Commission, provides that the covered by Articles 1 and 2 may benefit competent national authority is to take from customs exemption provided that a direct decision on applications for they are imported exclusively for exemption from customs duties in all educational purposes or for pure cases where the information at its scientific research. That provision is disposal, if necessary after consultation stated to apply to instruments and with the trade circles concerned, enables apparatus that: it to assess whether or not the instrument or apparatus is scientific and whether or not there exist instruments or apparatus of equivalent scientific value which are "(a) . . . are intended for: currently manufactured in the Com­ munity. Otherwise the application for exemption from customs duties must be forwarded to the Commission which either public establishments prin­ must then seek the opinions of the cipally engaged in education or Member States and, in the event of an

unfavourable response, submit the matter instrument or apparatus of scientific to a group of experts for examination. value equivalent to that of the article in respect of which the exemption was sought. As regards the outcome of that If the Commission's examination reveals approach and the reasons for which that equivalent apparatus is manu- a comparable instrument or apparatus factured in the Community, the obtainable in the Community could not Commission must adopt a decision be used for the research project, the declaring that the conditions for duty- Institute stated that;

2. Facts and procedure before the national capacity, 200 kV in the case of the court JEM-200 CX as opposed to 120 kV in the case of the EM 400. As regards the field of application referred to, namely On 20 August 1980, the appellant in the the study of metals and alloys, the only main proceedings, the Interfacultair possible choice appears to be the Instituut Electronenmicroscopie [Inter- JEM-200 CX.

On 6 November 1980 The apparatus was manufactured by the Institute lodged an objection against JEOL Ltd in Japan and its price was in that decision; it referred specifically to the region of HFL 510 000. According the fact that the Inspector of Customs to the Institute it was intended for and Excise for Enschede had, for his "scientific research on metals and part, granted an exemption to the materials" and for "instruction of Mechanical Engineering Department of students reading applied physics and, the Technische Hogeschool [Technical subsidiarily, pure physics". College of Higher Education] of Twente in spring 1980 for the importation of an identical instrument. In its reply to Question 11 on the ques- tionnaire the Institute named Philips Nederland BV (Eindhoven) as the In its decision of 26 November 1980 on Community undertaking which had been that objection, the Inspector maintained approached with a view to supplying an his point of view, relying in particular on

Commission Decision 80/772/EEC of 18 customs administration was bound by the July 1980 (Official Journal 1980, L 221, above-mentioned decisions of the p. 20), which was adopted at the request Commission. of the French Government and addressed to the Member States of the Community. The Institute, however, produced In that decision, the Commission evidence intended to show that the recognized the scientific character of the apparatus known as the EM 400 manu- apparatus known as the JEM-200 CX factured within the Community is not of but nevertheless refused to allow it to be scientific value equivalent to that of admitted free of Common Customs the imported article.

In support trielle et Commerciale (Bobigny, France). of its view, the Institute submitted photographs taken and reports written On 23 Janaury 1981 the Institute by fellow researchers from Belgium and brought an action before the Tarief- the Netherlands. In addition the Institute commissie for the annulment of the stated that it had not been notified of Inspector's decision of 26 November the considerations underlying the 1980. On 3 April 1981, following Commission's decision.

By order of 31 December 1982 the 18 July 1980. On 8 October 1981 the Tariefcommissie stayed the proceedings Commission adopted the decision at and referred the following question to issue here, Article 1 of which stated that the Court of Justice for a preliminary the apparatus in question could not be imported free of Common Customs ruling: Tariff duties, for the same reasons as were set out in the two earlier decisions. "Has the Commission in its decision of 8 October 1981 (81/843/EEC) correctly On the basis of the Commission's interpreted and applied the term 'of decision the Inspector concluded that at equivalent scientific value' contained in the time he had been right to reject the Article 3 of Regulation (EEC) No 1798/ application for exemption and that the 75?"

II — W r i t t e n p r o c e d u r e before Groningen taken into consideration in the Court examining the equivalence of the two instruments in question?" The order making the reference was received at the Court Registry on 31 By order of 29 February 1984, the Court August 1983. assigned the case to the Second Chamber. In the grounds on which its order was based, the Tariefcommissie referred inter alia to the fact that the Institute had alleged, without being challenged, that the research conducted at the Institute Ill — Written observations required an electron microscope with an acceleration capacity of 200 kV, a capacity which the apparatus manu- factured by Philips did not possess. The The appellant in the main proceedings, Tariefcommissie also noted that no the Institute, merely emphasizes the im- further grounds for the Commission's portance of the documents communi- view, which is contested by the Institute, cated to the Court by the Tarief- were given in the decision, and that the commissie and submits a number of Inspector considered that his task was additional documents concerning the merely to implement the decision. technical characteristics of the two instru- ments and the question of their scientific equivalence. In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations The Netherlands Government notes that were submitted by the appellant in the the examination carried out by the group main proceedings, represented by B. of experts under the procedure provided Boom, Secretary of the Interfacultair for in Article 7 of Regulation N o Instituut Electronenmicroscopie of the 2784/79 shows that electron microscopes University of Groningen, by the Italian of equivalent scientific value are manu- Government, represented by P. G. Ferri, factured in the Community, namely by Avvocato dello Stato, by the Netherlands Philips Nederland BV. In view of the Government, represented by I. Verkade, range of its technical capacities, the Secretary General in the Ministry of apparatus produced in the Community Foreign Affairs, acting as Agent, and can be used for the same scientific by the Commission, represented by A. purposes as the imported apparatus and Haagsma, a member of its Legal its performance could be said to Department, acting as Agent. be comparable. In consequence the Netherlands Government submits that Upon hearing the report of Judge-Rap- the question referred to the Court for a porteur and the views of the Advocate preliminary ruling should be answered in General the Court decided to open the the affirmative. oral procedure without any preparatory inquiry. However the Court asked the Commission to reply in writing before The Italian Government states that the 15 March 1984 to the following competent national authorities are question: uncertain as to how to interpret Article 3 of Regulations Nos 1798/75 and "In what way was the specific use 1027/79 in relation to the question of envisaged by the University of the equivalence of scientific instruments

The Commission submits that the point According to the Italian Government, at issue is not whether or not Article 3 the requirement of equivalent scientific of Regulation No 1798/75 has been value must be interpreted as entailing correctly interpreted or applied but an objective assessment which is not whether the decision at issue is valid in however of absolute and general the light of the manner in which the application. It involves not an abstract concept of "equivalent scientific value" comparison of the technical capacities of was interpreted and applied in that the instruments but an assessment of decision. A reply to that question cannot their suitability for the experiments for be given in the abstract since, according which the body concerned intends to use to Article 3 (3) of Regulation N o them. 1798/75, the answer depends on the assessment of whether the instrument or apparatus manufactured within the Although the Commission has a certain Community may be used for the same discretion in making that assessment, proposed scientific purposes as, and that discretion must be governed by whether its performance would be purely scientific and technical con- comparable to that of, the instrument siderations. The Commission must for which exemption has been sought. compare the essential technical charac- Article 5 (2) Regulation No 2784/79

UNIVERSITY OF GRONINGEN v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN, GRONINGEN

JUDGMENT OF 25. 10. 1984 — CASE 185/83

I V — T h e C o m m i s s i o n ' s r e p l y to During the meeting of the Committee on t h e q u e s t i o n p u t by t h e 9 July 1981 the Netherlands delegation Court referred to that study, which was subs- equently supplied to all the members of the Committee.

UNIVERSITY OF GRONINGEN v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN, GRONINGEN

alleged superior performance of the confirmed them. The Committee and the JEM-200 CX compared with the Commission then endorsed those results. EM 400. They thus did more than is required by Community rules in that respect. V — Oral procedure

Finally, the Commission emphasizes that At the sitting on 5 April 1984, the the conclusion that the two instruments appellant in the main proceedings, were of equivalent scientific value for the represented by G. Boom, acting as research envisaged was not reached Agent, the Italian Government, re- exclusively and automatically on the presented by P. G. Ferri, Avvocato dello basis of the study carried out by the Stato, and the Commission of the Philips laboratory at the request of the European Communities, represented by Netherlands authorities. The results of A. Haagsma, a member of its Legal that study were communicated to all the Service, acting as Agent, presented oral members of the Committe on Duty-Free argument and replied to questions put by Arrangements and to the relevant the Court. departments of the Commission, and the results were checked, for example, by the The Advocate General delivered his Joint Research Centre at Ispra, which opinion at the hearing on 30 May 1984.

Decision

1 By o r d e r of 31 D e c e m b e r 1982, which was received at the C o u r t on 31 August 1983, the Tariefcommissie [Administrative court of last instance in revenue matters], A m s t e r d a m , referred to the C o u r t for a preliminary ruling u n d e r Article 177 of the E E C T r e a t y a question r e g a r d i n g the validity of Commission Decision 8 1 / 8 4 3 / E E C of 8 O c t o b e r 1981 establishing that the apparatus described as " J E O L electron microscope, m o d e l J E M - 2 0 0 C X " m a y n o t be i m p o r t e d free of C o m m o n C u s t o m s Tariff duties (Official J o u r n a l 1981, L 314, p. 15).

5 In refusing exemption the Inspector relied on Commission Decision 80/772 of 18 July 1980 (Official Journal 1980, L 221, p. 20) adopted at the request of the French Government in accordance with the procedure laid down in Article 7 of Commission Regulation No 2784/79 of 12 December 1979 (Official Journal 1979, L 318, p. 32). That regulation contains provisions for the implementation of Council Regulation N o 1798/75 of 10 July 1975 on the importation free of Common Customs Tariff duties of educational, scientific and cultural materials (Official Journal 1975, L 184, p. 1), amended by Regulation N o 1027/79 (Official Journal 1979, L 134, p. 1).

6 In that decision, which concerned the use of the JEM-200 C X apparatus for the study of metals and alloys, the Commission found that apparatuses of equivalent scientific value, which could be used for the same purposes, were currently being manufactured in the Community; that was true in particular of the apparatus EM 400 manufactured by SA Philips Industrielle et Commerciale (France). It therefore found that the conditions required for the admission free of Common Customs Tariff duties of the apparatus in question were not fulfilled.

UNIVERSITY OF GRONINGEN v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN, GRONINGEN

7 After an action had been brought before the Tariefcommissie, however, the Netherlands Government asked the Commission to initiate once more the procedure provided for in Article 7 of Regulation N o 2784/79 in order to determine whether or not the said apparatus, " t o be used for microstructural research of the transformation and deformation of metallic materials, should be considered to be a scientific apparatus and, where the reply is in the affir­ mative, whether apparatus of equivalent scientific value is currently being manufactured in the Community".

JUDGMENT OF 25. 10. 1984 — CASE 185/83

capacity of 200 kV, ą condition fulfilled by the JEM-200 CX apparatus, whereas the EM 400 apparatus had a capacity of only 120 kV. It stated, moreover, that the Commission had failed to give adequate reasons for its decision that the two apparatuses were of equivalent scientific value and could be used for the same purposes.

1 2 In its written observations made to the Court, the Institute again denied that the two apparatuses were of equivalent scientific value, and referred inter alia to the "joint submissions on the application for exemption from import duties" drawn up in conjunction with the Catholic University of Leuven and attached to the application made to the national court.

i3 Reference should first of all be made to the Court's ruling that persons concerned by a decision taken by the Commission under the Community regulations on this matter "may plead the illegality of that decision before the national court in proceedings against the fixing of customs duty and the question of the validity of the decision may therefore be referred to the Court in proceedings for a preliminary ruling" (judgment of 28. 9. 1983, Case 216/82 Universität Hamburg v Hauptzollamt Hamburg-Kehrwieder [1983] ECR 2771).

H It was stated in the same judgment however, with regard to the examination of the validity of such a decision, that the Court has only a limited power of supervision since, given "the technical character of that examination [of the question whether or not the apparatuses are equivalent] the Court cannot, save in the event of manifest error of fact or law or misuse of power, find ¡Fault with the contents of a decision which the Commission had adopted in . conformity with the committee's opinion".

is With regard to the implementation of the procedure in this case, it appears from the first and second recitals in the preamble to the decision at issue that the Commission initiated the procedure at the request of the Netherlands and that a group of experts composed of representatives of all the Member States met on 9 July 1981 within the framework of the Committee on Duty- Free Arrangements to examine the matter.

i9 Before the Tariefcommissie, however, the Institute pointed out that the reasons on which the decision of the Commission refusing its application was based were not communicated to it.

20 It should be noted that the Commission's implementing Regulation No 2784/79 provides neither for the participation of the applicant for exemption in the examination of equivalence carried out by the Committee on Duty-

JUDGMENT OF 25. 10. 1984 — CASE 185/83

Free Arangements, an examination which is basically only an exchange of views between the experts of the Member States, nor for a right on the part of the applicant to make submissions before the Commission adopts the decision declaring whether or not the instrument or apparatus fulfils the conditions required for duty-free admission.

2i That decision is addressed only to the Member States; under Article 191 of the Treaty it is notified only to the Member States and takes effect upon that notification. Conversely it is not notified to the applicant for exemption and is not one of the measures whose publication is required by the Treaty. Even if in practice the decision is in fact published in the Official Journal of the Communities, its wording does not necessarily enable the applicant to ascertain that it was taken with reference to the procedure initiated by him.

26 It follows from the foregoing considerations that the m a n n e r in which the Commission implemented the p r o c e d u r e laid d o w n by the provisions referred to was in n o w a y improper.

The application of the substantive criteria

27 With regard to the substance of the matter, Article 3 (1) (b) of Regulation N o 1798/75, as amended by Article 1 (1) of Regulation No 1027/79, provides that scientific instruments and apparatus not included in Article 2 and imported exclusively for non-commercial purposes may be imported free of Common Customs Tariff duties provided that "instruments' or apparatus of equivalent scientific value are not being manufactured in the Community". According to the third indent of Article 3 (3) of the regulation, for the purposes of that provision "equivalent scientific value" is to be assessed "by comparing the essential technical characteristics of the instrument or apparatus in respect of which application is made for the exemption referred to in Article 4 with those of the corresponding instrument or apparatus manufactured in the Community in order to dertermine whether the latter could be used for the same scientific purposes as those for which the instrument or apparatus that is the subject of the application for exemption is intended and whether its performance would be comparable".

28 According to Article 5 (2) of the Commission's implementing Regulation N o 2784/79, moreover: "In making the comparison provided for in the third indent of Article 3 (3) of Regulation (EEC) N o 1798/75, only such technical characteristics as have a decisive influence on the outcome of the specific work planned may be regarded as 'essential'." In making that comparison no account is to be taken of, inter alia, "the fact that an instrument or apparatus is able to achieve performances superior to those which are necessary for a proper execution of the specific work to be carried out".

32 During the proceedings before the Court no factor of such a kind as to cast doubt upon the Commission's statement has come to light. In examining the equivalence of the two apparatuses in question the Commission and the group of experts were also right to base themselves on the definition of the experiments given in the application for duty-free admission, since the wording which appears in the first recital to the preamble to the decision in question was only a slightly more precise expression of the same scientific purposes. Since the comparison must be based on the information given in that respect by the applicant at the time of making its application, the different description of the research project presented at the hearing by the Institute cannot be taken into consideration.

UNIVERSITY OF GRONINGEN v INSPECTEUR DER INVOERRECHTEN EN ACCIJNZEN, GRONINGEN

33 With regard to the Institute's submission that comparative tests of the two apparatuses in question showed that the imported apparatus was superior to that manufactured in the Community, it is necessary to refer, as the Commission rightly did, to the provisions of Article 5 (2) of Regulation No 2784/79, according to which performances superior to those which are necessary for the proper execution of the specific work to be carried out are not to be taken into account.

34 It follows from the foregoing considerations that examination of the facts presented to the Court with regard to the examination of the equivalence of the two apparatuses in question has disclosed no factor establishing the existence of manifest error or misuse of power affecting the validity of the decision in question.

jurisdiction, the authority is not required to give details of all relevant factual and legal aspects. The question whether the statement of the grounds for a decision meets those requirements must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question.

39 In this case the Court finds the statement of grounds for the decision in question somewhat laconic but considers that it nonetheless satisfies the minimum requirement of Article 190 of the Treaty taking into account the fact that the deicision is addressed to the Member States which took part in the meetings of the group of experts and are therefore sufficiently familiar with the details of the case to be able to assess the scope of the decision, and that it also contains the indispensable elements which permit the scientific establishment concerned to establish whether the decision is vitiated by a manifest error or by misuse of power.

40 If, moreover, the scientific establishment concerned decides to bring the matter before a national court, that court may always inquire into the possibility of manifest error or of misuse of power and, if that inquiry seems to support the argument of the scientific establishment, refer the matter to the Court of Justice for a preliminary ruling.

4i It follows from the foregoing that the reply to the national court must be that consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Commission Decision 81/843 of 8 October 1981.

Consideration of the question raised has disclosed no factor of such a kind as to affect the validity of Commission Decision 8 1 / 8 4 3 of 8 October 1981.

Due Pescatore Bahlmann

Delivered in o p e n court in L u x e m b o u r g on 25 O c t o b e r 1984.

For the Registrar H . A. Rühi O. Due Principal Administrator President of the Second Chamber

OPINION OF MR ADVOCATE GENERAL VERLOREN VAN THEMAAT D E L I V E R E D O N 30 M A Y 1984 '

Mr President, from import duties for an apparatus Members of the Court, called a "JEOL electron microscope, model JEM-200 CX", which has been imported into the Community from 1. I n t r o d u c t i o n Japan. The fact that it is a scientific apparatus is not in dispute. Nor is 1.1. The basic issue which has led the it contested that the -.- apparatus is Tariefcommissie to refer a question to exclusively intended for educational the Court for a preliminary ruling purposes or for pure scientific research in concerns the refusal to grant exemption a public establishment or establishment