C-79/89

I — Preliminary remark on legal developments 1865

II — First part of Question 1 (whether it is possible a priori to deduct the cost of the software) 1867

1. Applicability of Article 3 of Regulation (EEC) No 1224/80 to the import oper­ ations at issue 1867

2. Price paid or payable for the goods 1868

(a) Determining the goods subject to customs duty 1868

(b) Determining the price paid or payable for the goods 1871

claim entitlement to the deduction) 1875

1. Methods of determining the customs value 1875

2. Need to furnish evidence of the cost attributable to the software 1875

(a) Applicable value regarding onus of proof 1875

(b) 'Evidence' and 'distinguished' 1875

* Original language: German.

(bb) Arguments derived from the provisions regarding the declaration for

the release of goods for free circulation 1878

(c) Closing date for declaring the component qualifying for deduction 1879

(aa) Whether a declaration may be made subsequently 1879

(bb) Conditions under which the declaration is lawful 1880

IV — Answer to Question 1 1880

I-1863

OPINION OF MR LENZ — CASE C-79/89

'software'. The accompanying invoices set Bundesfinanzhof, which referred the out the totals without breaking them down following questions to the Court of Justice into their individual components, and for a preliminary ruling: included no reference to carrier media.

3. In its customs declarations the plaintiff 1. Was Article 3 of Regulation (EEC) deducted from the total price not only the No 1224/80 to be interpreted in 1982 as post-importation transport costs but also the meaning that the transaction value of charges for the assembly and software. In imported carrier media with software the case of the second consignment, the recorded on them in respect of which the plaintiff, in a later correction which the supplier had provided the declarant with customs authorities apparently did not an invoice containing only a total price challenge, estimated the customs value at was the entire invoice price, or was the DM 0. In the contested decisions the transaction value only that part of the Hauptzollamt did not allow deduction of invoice price which corresponded to the the software and assembly costs, on the carrier medium? Did it make any grounds that the invoices produced did not difference if the declarant distinguished distinguish the amounts qualifying for between the price of the carrier medium deduction and that charges for client and the price of the software at the software formed part of the customs value material time or later? of the carrier media.

2. Are charges for assembly to be regarded 4. In the administrative appeal proceedings, as having been 'distinguished' within the the plaintiff produced revised invoices for meaning of Article 3(4) of Regulation the first three consignments, in which the (EEC) No 1224/80 only when the earlier totals were separated into prices for distinction has been brought to the hardware and software. In addition, the customs authorities' attention at the plaintiff produced two telex messages from material time? the manufacturer, dealing with the amount of the costs for the software and assembly.

8. The generally accepted principle that only goods, as opposed to thoughts, ideas, 12. That system of customs valuation under rights or services as such, are subject to the 1950 Convention and Regulation 3 customs duty creates uncertainty whenever, No 803/68 was still based on the principle as here, goods are combined in any way of the 'normal price'. In accordance with with an incorporeal asset. Especially when Article I of Annex I to the Convention, the value of an incorporeal asset is greater Article 1(1) of the regulation provided as than that of the goods themselves, the follows: question arises whether the two components are to be treated as a single entity for customs valuation purposes or whether — and, if so, in what precise 'For the purpose of applying the Common circumstances — the two must be Customs Tariff, the value for customs considered separately. purposes of the goods imported shall be taken to be the normal price, that is to say, the price which they would fetch ... on a sale in the open market between a buyer and a seller independent of each other.' 9. As regards the problems of fact and law involved in such a separation, one source of uncertainty is in establishing how the risks are to be assigned as between the person 13. As a guide to the meaning of 'customs making the customs declaration (here­ value' in relation to computers and to inafter: the declarant) and the customs carrier media, the Customs Valuation authorities. 6 Committee issued in 1979 a revised study. 7

Paragraphs 21 to 23 of that study dealt with the customs value of 'media bearing user

17. Under the scheme of the 1979 Agreement and the basic regulation, the 14. Costs and profits, in particular those basis for the customs valuation of goods is connected with the preparation of the job primarily the transaction value of the plan — which largely determine the price of goods — that is, the price actually paid or the software — should not affect the value payable for the goods when sold for export for customs purposes (paragraph 21). Since to the country of exportation (in this the authors of the study were aware of the context, the customs territory of the difficulty in quantifying item (ii) above, Community). " they proposed at paragraph 22, for the sake of simplicity, using the aggregate of the cost of the medium and the cost of recording the programme, increased by 100% in the case of magnetic tapes and discs. 18. As the customs valuation was oriented on the actual price of the goods, a number 12 of customs authorities clearly assumed that the 1979 study was now superseded, 15. It seems that the practice adopted by and based the customs value of computers customs authorities — including Community 3 and carrier media on the total price paid. ' customs authorities — regularly followed The situation was, however, viewed by those rules until the new customs valuation 8 several parties to the 1979 Agreement as system was introduced. This revision of the undesirable because it inhibited exports, as system was carried out under the aegis of was noted by the GATT Committee on GATT, with the entry into force on 9 Customs Valuation 14 in a decision of 1 January 1981 of the Agreement on ,5 24 September 1984: the Committee ruled Implementation of Article VII of the that the abovementioned method of customs General Agreement on Tariffs and Trade. valuation based on the total price was fully in accordance with the 1979 Convention, but also permitted the parties to the

23. //. Having established those points, I 20. Article 8a(l) is worded as follows: propose to begin by examining the first part of Question 1, on whether or not a deduction from the invoiced price equi­ valent to the cost of the software is 17 precluded a priori. 'Notwithstanding Articles 2 to 8, in deter­ mining the customs value of imported carrier media for use in data processing equipment and bearing data or instructions, 24. 1. I first wish to affirm that Article 3 of only the cost or value of the carrier medium itself shall be taken into account. The the basic regulation is applicable to the customs value of imported carrier media import operations at issue here, because the bearing data or instructions shall not, conditions thereunder are fulfilled (see therefore, include the cost or value of the Article 2(1) of the basic regulation). With data or instructions, provided that such cost regard to the (negative) provisos contained or value is distinguished from the cost or in Article 3(l)(b), it is my view that value of the carrier medium in question.' 'condition' and 'consideration' as used in that provision may be assumed to refer only to a condition or consideration demanded of the purchaser in addition to the payment of the quantifiable price, resulting in a necessarily lower price on account of the 21. By adopting Anicie 8a the Community consideration to be given by the purchaser committed itself to the second method or the conditions to be fulfilled by him. In outlined in the decision of 24 September that event the question is whether the trans­ 1984, with the result that — at least since it action value remains the point of reference entered into force — there has been no when it is impossible to determine how far margin of discretion for the customs the additional consideration given by the purchaser forms part of the quid pro quo for 16 — Council Regulation (EEC) No IC5S/85 of 23 April 1985 amending Regulation (EEC) No 1224/80 on the valuation of goods for customs purposes, OJ 1985 L 112, p 50, see 17 — The second part of Question I concerns the further also the fourth, fifth and sixth recitals in the preamble conditions governing such deduction

27. Thus, Article 3(l)(b) of the basic regu­ 25. In support of the above interpretation lation does not preclude the application of of Article 3(l)(b) I would cite the examples Article 3 in the present case. given in Annex I to the 1979 Convention — recognized as an integral 19 part thereof — and the almost identically worded examples in Annex I to Regulation 20 21 No 1494/80, illustrating the provision. They are limited to linked transactions and 28. 2. With regard to Article 3(1), the set-off arrangements, requiring the invoiced question must now be asked whether the amount to be raised for the purpose of total price for the magnetic tape and the 22 establishing the transaction value. software recorded on it is 'the price actually paid or payable for the goods'. If the answer is an unqualified affirmative then the deduction of that part of the price repre­ senting the software is automatically excluded. Otherwise, it will be necessary to examine whether that deduction should have been applied at the material time even 26. The view that cases such as the present though the basic regulation is silent on that one are not covered by Article 3(1 )(b) of the point. 18 — If the value of the consideration or the conditions can be determined by reference to the goods to be valued, then it is an indirect payment as envisaged in the last sentence of Article 3(3) or the basic regulation. 19 — See Article 14 of the 1979 Agreement. 20 — Commission Regulation of 11 June 1980 on interpretative notes and generally accepted accounting principles for the purposes of customs value; OJ 1980 L 154, p. 3. 29. (a) In the proceedings before both the 21 — The examples in Regulation No 1494/80 refer to Article Bundesfinanzhof and the Court of Justice it 3(l)(b) of the basic regulation, whilst those in Annex I to the 1979 Agreement refer to the parallel Article l(l)(b) of that Agreement. 23 — Commission Regulation of 11 June 1980 implementing 22 — One example given is the case in which the seller estab­ certain provisions of Articles 1, 3 and 8 of Council Regu­ lishes the price of the imported goods on condition that lation (EEC) No 1224/80 on the valuation of goods Tor the buyer will also buy other goods in specified quantities. customs purposes; OJ 1980 L 154, p. 14.

— copy the software onto another carrier medium; or

33. Secondly, there is no such unity from the economic point of view either. In proposing the opposite view the — erase the software — even irre­ Commission bases itself on the judgments of trievably — from the carrier medium; or the Court regarding the inclusion of licence 25 fees in the customs value of goods. It maintains that the only rational use (of carrier media) consists in feeding the data and the programmed instructions contained — modify the content of the software, in them into the appropriate data-processing since according to the order for equipment, which in turn can only be done reference it consists of alterable standard by using the media carrying the data. The programmes specially assembled for the possibility of removing or altering the user. 25 — Judgments of the Court in Case 1/77, cued abo\c, and Case 135/77 Bosch s Ilaupizollamt UMeibeim ¡I97S] 24 — Case 1/77, cued above PCR 855

I- 1869

OPINION OF MR LENZ — CASE C-79/89

35. As to the circumstances in which the process may be considered to merge with the goods themselves, the Court ruled as follows :

37. Thirdly, it should for the sake of ' ... the result of an interpretation of Article completeness be pointed out that the carrier 3 in accordance with the objectives of the medium and the software do not form a basic provision laid down by Article 1 of the single item of goods de jure either. There is regulation is that a patented process, the some evidence in this case for the contrary carrying out of which constitutes the only view, inasmuch as a single price was agreed economically viable use of the goods and and invoiced. However, suffice it to say that which is only put into effect by the use of this arrangement of the contract and the those goods, is regarded as embodied in the invoice has — at most — a bearing on the 27 imported goods'. criterion of 'price' contained in Article 3, not on the criterion of 'goods'. The same 26 — Paragraph 4 of the judgment. principle also appears to underlie Article 27 — Paragraph 5, iti fine; see also the operative part of the judgment in Case 135/77, cited above. 15(2)(b) of the basic regulation.

I- 1870

BROWN BOVERI

38. The conclusion to be drawn from the of different price components has no foregoing as a whole, namely that bearing on the unity of the goods as such. applications software and carrier media do not, either generally or in this particular 28 case, form a single item of goods, is endorsed by the insertion of the abovemen- tioned Anicie 8a into the basic regulation. The fifth recital in the preamble to the amending regulation, 29 referring to the 40. (b) Since, therefore, software and decision of the GATT Committee on magnetic tape represent two different Customs Valuation of 24 September 1984, entities and do not constitute a single item states that: of goods it remains to be considered whether the total price should relate to the goods imported — the magnetic tape — and whether it is thus the 'price actually paid or payable for the goods'.

39. If the carrier media and the software were to be regarded as a single item of goods, it would in my opinion be incom­ 42. From a legal point of view, on the other patible with the 1979 Agreement to treat the hand, matters may be different, because value of the carrier media as the sole under Article 3(3)(a) of the basic regulation 32 constituent of the customs value. The as amended by Regulation No 3193/80 requirement of separate documentary entries the price actually paid or payable 'includes for a deduction does not affect the above all payments made or to be made as a conclusion, because the separate itemization 3C — According to page 9 of lhe order for reference (p 6 of the translation), the inclusion of the value of the software 28 — Perhaps unlike the case of 'operating software', without in the customs value of the carrier media increases thai which the computer is quite unable to function as such, value considerably. any incorporation of applications software in the 31 — A ratio of US $ 8 million to DM 2C million was quoted, computer seems altogether out of the question, since such however, the first figure clearly relaies io the value of the apparatus is generally — and, clearly, m this instance apparatus as a whole too — built to be operated with a wide range of verv diverse applications programmes 32 — Council Regulation No 3193/8C of 8 December 1980 amending Regulation (EEC) No 1224/8C on the valuation 29 — Regulation No 1055/85, cited above of goods for customs purposes, OJ 1980 I. 333, p. 1

I- 1871

OPINION OF MR LENZ — CASE C-79/89

34 — See page 2 of the English translation of the order for reference. 35 — This is in keeping with the later case-law of the Bundesfi­ nanzhof on whether software should be classified as a tangible or an incorporeal assent: judgment of 3 July 1987, Bmdeutemrblatt 1987 Part II, p. 728, at p. 730 et 44. Although the Bundesfinanzhof states seq. that the right to use the software was 36 — Under the principle of the 'transaction value' it is possible only to allow or disallow, in its entirety, the deduction for the (actual) cost of the software. The method described in 33 — Such acquistion of title is, indeed, not even necessary to the aforesaid study of 1979 (namely the value of the the transaction regarding the software, since in this magnetic tape and certain services, increased by 100%) context the essentia! purpose of recording the software is seems, in any event, totally excluded under the basic regu­ that it shall be fixed for tansportation. lation.

I- 1872

BROWN BOVERI

50. In the first place, it should not be forgotten that the basic regulation does not 53. It hardly needs to be explained that a impose any express restrictions on customs value bearing no relationship either deductions — unlike the provisions of to the real value or even — and this is quite Article 8(3) thereof regarding amounts to be self-evident without any specific infor­ added. That is in keeping with the mation — to the price of the goods is an Repenning judgment, 38 in which the Court arbitrary value. We are dealing with a case gave a broad interpretation of Anicie 4 of in which the scheme of the regulation,

37 — Sec above, paragraph 26, m fine 39 — In the version applicable to that case 40 — Paragraph 16 of the judgment 38 — Judgment in Case 183/85 Hauptzollarm Itzehoe v Repenning [1986] ECR 1873 41 — Sixth recital in the preamble

I- 1873

OPINION OF MR LENZ — CASE C-79/89

which generally ensures the exclusion of Article 15 are not met. There, too, an such arbitrary customs values, achieves analogy with Article 2(3) of the basic regu­ exactly the reverse. lation was discussed. The Report for the Hearing summarizes the Commission's submissions on the matter as follows:

56. In this connection I should like to refer 43 — As regards the terminology, it should be said that in to a similar difficulty which is the subject of Article 3 the basic regulation employs the terms 'trans­ 42 action value' and 'customs value' — without prejudice to Case 17/89, still pending. There, the point Article 8 — as synonyms whereas it uses only the term at issue is whether a deduction equivalent to 'customs value' for the value following the deduction of certain costs (see Articles 3 (4), 8a and 15). Those terms the cost of transport within the Community will be used accordingly hereinafter. should be made if the conditions under 44 — That point is clear not only from the later adoption of Regulation No 1055/85 but also from the hiatus in the continuity of the provisions which would occur if such a 42 — Hauptzollamt Frankfurt am Main-Ost v Deutsche Olivetti; deduction were ruled out for the period from 1 July 1980 see the Opinion of Mr Advocate General Tesauro of 28 to 1 May 1985 (the entry into force of the basic regulation March 1990. and of Regulation No 1055/85 respectively).

I- 1874

BROWN BOVERI

determined using reasonable means by the importer which relate to the consistent with the principles and general underlying transaction. provisions of the Agreement and of Article VII of the General Agreement on Tariffs and Trade and on the basis of data available in the Community'. That provision may be 61. 2. Whenever the importer, relying on applied mutatis mutandis to deductions of the right to a deduction which Article 2(3) the kind under discussion if an arbitrary confers on him by analogy, claims such a customs value would otherwise result; the deduction, he must in principle furnish avoidance of such values is, indeed, evidence that the invoiced amount includes envisaged in Article 2(3) itself (see Article charges for software, and must quantify 2(4)(g) of the basic regulation). them.

63. (b) A further question is whether separately stated figures are necessary or sufficient. The relationship between the production of evidence and separately stated 45 39. ///. Although according to the terms of figures was dealt with in Mainfrucht. The Question I, the Bundesfinanzhof requested Mainfrucht judgment discloses that merely an interpretation of Article 3, it is 'separately stated figures' are subject to less appropriate to set out the conditions stringent requirements than is the imposed by Article 2(3) of the basic regu­ 'production of evidence'. With regard to lation regarding the documentary evidence Article 15(1), the Court ruled that the only required for the grant of a deduction. This condition imposed was that the cost of brings me to the second part of Question 1. transport within the Community should be distinguished from the price actually paid or 46 payable. The fact that Community law on the valuation of goods for customs purposes makes any deduction conditional on separately stated figures is more favourable to the customs debtor than the requirement 60. /. In principle, the customs authorities of having to produce evidence, since it is must use 'reasonable means' when applying Article 2(3) of the basic regulation. Clearly, 45 — Judgment in Case 290/84 Hauptzollami Schweinjuri v they must base themselves primarily on the Mainfiucbtl[1985]ECR 3909. 46 — See judgment cited above, at paragraph 20; emphasis invoicing and contract documents produced added.

I-1875

OPINION OF MR LENZ — CASE C-79/S9

sufficient that the cost elements in question 65. (a) On that basis we should first invest­ can be distinguished from the purchase igate the problem formulated in the second price — that is, that they can be identified part of Question 1, to which the 47 as separate cost components. The customs Commission has drawn particular attention, office, however, retains the right of veri­ namely whether, when composite prices 48 fication. have been agreed, Community law disallows evidence in the form of records kept by the seller, and in particular invoices showing separate figures for the costs qualifying for deduction.

67. It is, however, a separate question 64. 3. As far as the requirements regarding whether Community law rules out the such evidence are concerned, Community importers' furnishing evidence as to the law does not contain a comprehensive set of individual components of the total price provisions, with the result that a priori agreed prior to that material time. I cannot 50 national legislation applies. Article 2(3) of find any such Community provision the basic regulation merely defines the outer governing any part of the procedure for limit by excluding unreasonable means. taking evidence, which is otherwise a matter for national law. On the other hand, I do 47 — See the detailed reasons set out in my Opinion in Case not consider it necessarily out of the 290/84, or cited above, at p. 3919 et seq; see also the question that the importer should, after the examination of Question 2, which follows. event, supply documents or other evidence 48 — See the Judgment in Case 290/84, cited above. 49 — The plaintiff is therefore right in claiming that Article 8a showing convincingly how the individual of the basic regulation is, in relation to applications contractual items, not identifiable in the software, an innovation only in the sense that it treats a 52 separate itemization as sufficient. In the present case, of contract itself, were calculated. In the course, the distinction between separate itemization and present case the plaintiff before the Bundes­ subsequent furnishing of evidence plays only a minor role. The plaintiff initially presented an inovoice which, in finanzhof submitted at the hearing that in keeping with the contract, did not cite separate figures for the carrier media and the software. As I shall show shortly the negotiations for the contract an itemized in examining Question 2, the customs authorities are calculation was first prepared and then the permitted in such a case although the separate statement of the figures is normally sufficient to justify a deduction and total figure was negotiated as a lump sum. even if the importer subsequently produces an appropriate invoice to call for further evidence, if this is needed, to convince them that the claimant is entitled to the 51 — Article l(l)(g) of the basic regulation. deduction. 52 — See the judgment in Case 84/79, cited above, and in 50 — See the judgment in Case 84/79 Meyer-Uetze v Haupt- particular the Opinion of Mr Advocate General Reischl in zollamt Bad Rekhenhall [1980] ECR 291, at paragraph 13. that case; [1980] ECR 304, at p. 308.

71. (aa) The Commission concludes from 54 68. On the other hand, the difficulties the abovementioned Mainfrucht judgment which the person concerned may encounter that the customs authority must have the in adducing such evidence are the natural right to inspect the evidence regarding the consequence of the manner in which the deductions sought before it fixes the 55 underlying transaction was arranged. 53 customs value. However, it is my opinion that the Court has established only that subsequent inspection by the competent customs authorities is not precluded if the importer applies for a deduction envisaged The Court of Justice cannot determine in the basic regulation and submits whether the requisite evidence was supporting invoice documents in which the furnished in this case, since the examination relevant figure is shown separately. The of evidence is a matter for the national time-limit for the importer's submission of courts. such documents needed no ruling in that case.

I-1877

OPINION OF MR LENZ — CASE C-79/89

73. (bb) It is true that, as the Federal 75. Under the provisions of Directives German Government and the Commission 79/695 and 82/57 the entry must be submitted, a limit radone temporis of the complete, and accompanied by all the kind suggested might be inferrable from the documents required for the correct Community provisions adopted since the application of the import duties (Article 3 of material time for the Meyer-Uetze judgment, Directive 79/695). By virtue of Article 1(1) 59 regarding the formalities attaching to the of Regulation No 1496/80, those entry form for the release of goods for free documents must include a declaration of circulation (hereinafter referred to as 'the particulars relating to customs value, set out 56 entry'). Those provisions are contained in in a pre-printed form shown in the Annex, 57 58 Directives 79/695 and 82/57. together with the other supporting documents mentioned in the regulation. The possibility of correcting the particulars in the entry and producing further documents is the subject of detailed rules under Articles 6 to 8 of Directive 79/695 and Articles 5 to 9 of Directive 82/57.

74. As a preliminary it should be noted that 76. In my opinion, the question raised by the period prescribed for the implemen­ the Bundesfinanzhof concerns only the time tation of Directive 82/57 expired on 1 July up to which documents considered to 1982, so that it seems legitimate to ask furnish evidence of entitlement to a whether that directive is relevant to the deduction may continue to be submitted. interpretation of Article 3 of the basic regu­ That is apparent from the disagreement in lation, in the context of 'Case 1' before the the national proceedings as to whether the Bundesfinanzhof, where, according to the revised invoices and the telex message from documents, the goods were entered in April the manufacturer are admissible as evidence. 1982. Nevertheless, as will be shown below, that is not ultimately the point at issue.

I-1878

BROWN BOVER]

has none the less accepted the entry. In the until the relevant customs decision acquires present case the plaintiff produced invoices the force of law, and hence that a fairly (even before lodging the entry), although long period of uncertainty may occur in they gave no evidence on the deduction cases such as the present one, it is auth­ claimed. Nor can I construe Article 10(1) of orized by the provisions of the Member Directive 79/695 as a restriction disallowing States on legal protection against the evidence submitted subsequently. Under measures of customs authorities. Article 10(1) 'the results of the examination Community law does not at present cover of the entry and the documents attached to the matter, with the result that it cannot be it . . . shall be used for calculating the import cited against the solution proposed above, duties'. As is clear from the second sentence either in relation to the length of that period of Article 10(1) and from Article 10(2), the of uncertainty or in respect of any first sentence of Article 10(1) concerns only disparities in that regard between the the right of customs authorities to examine various Member States. the entry and the documents. The second sentence of Article 10(1) sets out the procedure when there is no such exam­ ination. As far as the ex post facto production of documents is concerned, the legal situation is the opposite of the 80. (c) It is, of course, another matter to arrangement under Article 8 of Directive define the time up to which it is possible to 79/695, whereby corrections of particulars declare to the customs authority, as a contained in previously accepted entries are deductible amount, the share of the price permissible only subject to the restrictions attributable to the software. and conditions mentioned therein.

79/695, under which an entry form may be claiming such deductions. No doubt the corrected only under certain conditions, is form provided by Regulation No 1496/80 to be found in Regulation No 1496/80 in also serves to bring a degree of order into connection with the declaration of the declaration of particulars relating to particulars relating to customs value. customs value and thus to make such declarations readily intelligible. If, however, that end is achieved in some other way, I can see no reason for placing the importer at a disadvantage.

82. The facts of the case as described by the Bundesfinanzhof are unclear as regards the time at which, and the rules under which, that declaration was given. Furthermore, in 84. IV. Question 1 of the national court its written submissions and at the hearing should be answered accordingly. the plaintiff claimed to have specified, in the declaration of particulars relating to customs value, the components of the invoiced price not forming part of that value. Should the Court not be prepared to Question 2 endorse my opinion, therefore, it would be appropriate to include a reserve regarding compliance with the period prescribed for the declaration; the declarant cannot be allowed to remedy a breach of the time- limits for claiming the reduction by 85. In view of the points made on the producing documents subsequently. second part of Question 1, I can be brief in my answer to Question 2.

Customs Valuation Committee is correct far the customs authorities are obliged to in maintaining that deductible costs cannot grant the deduction on the basis of the be regarded as having been 'distinguished' distinguished costs shown in the documents in the declaration if the entitlement to such produced subsequently. As was noted above, 63 a deduction is left totally unsubstantiated. the customs authorities are permitted under The criterion of 'distinguished' costs would the Mainfrucht judgment, in principle, to otherwise be largely meaningless. check the particulars shown as separate items 'if the circumstances warrant it' — that is, if there is reasonable doubt as to those particulars — in order to ensure that they are not fictitious. That of course applies also, and perhaps pre-eminently, in the case of documents produced subsequently. If their inspection shows that the deduction is wholly or partly unjustified, 87. The requisite documents may, in my they will reject the deduction or reduce the opinion, be produced subsequently in just amount claimed. the same way as in cases where the person concerned is required to furnish evidence. It should not be forgotten that the customs b authorities, by the terms of the Mainfrucht * judgment, are entitled to verify if need be the validity of the distinguished amounts whose deduction is claimed. Should the customs authority inform the person concerned in such a case that it considers the deduction excessive, the importer is quite at liberty under Community law, until such time as the customs decision acquires 89. It is none the less appropriate, precisely the force of law, to present documents or on account of the facts in the proceedings further evidence to substantiate entitlement 65 before the national court, to explain to the deduction. It follows that the 'distin­ clearly what the legal implications are if the guishing' of costs, being an attenuated form customs authority does not carry out its of evidence, must be subject to the same own investigations — because they offer no principle. prospect of success — or if those investiga­ tions reveal nothing. On the one hand, nothing will have changed inasmuch as there will be continuing doubts as to the validity of the particulars given. On the other hand, it would then be incompatible with the presumption which Article 3(4) attaches to the separate itemization of assembly charges if the customs authority 88. From those findings I propose to draw were to disallow the deduction out of hand, the answer to the further question as to how stating that the documents produced

(1) (a) In 1982 Article 3 of Regulation No 1224/80 was to be interpreted to the effect that the customs value of carrier media with applications software recorded on them, which the supplier had invoiced to the declarant, in accordance with the contract, as a comprehensive price was to be considered to be only that part of the invoiced price demonstrably attributable to the carrier media;

(b) A declarant who had produced that invoice showing the total price, prior to or together with the declaration of the particulars relating to the customs value, could furnish evidence to substantiate his claim until such time as the relevant customs decision was no longer open to legal challenge.

(2) Assembly charges (Article 3(4) of Regulation No 1224/80) are, if the declarant had, prior to or together with the declaration of the particulars relating to the customs value, produced an invoice in which they were incor­ porated in a total price, to be regarded as 'distinguished' if the declarant claimant produces the invoice or other transaction documents showing those charges separately before the time at which the relevant customs decision is no longer open to legal challenge;

However, customs authorities may, if the circumstances warrant it, inspect the documents produced subsequently regarding the assembly charges, in order to verify that the particulars given are not fictitious. Should they not conduct

I- 1882

BROWN BOVERI