C-164/95

ERU PORTUGUESA v ALFANDEGA DE LISBOA

O P I N I O N O F ADVOCATE GENERAL COSMAS delivered o n 16 J a n u a r y 1997

1. Pursuant to the third paragraph of Article ' C N Code Description 177 of the EC Treaty, the Supremo Tribunal Administrativo (Supreme Administrative Court) has referred to the Court for a pre- liminary ruling a number of questions which it considers necessary in order to resolve a dispute pending before it concerning the tar- 0406 Cheese and curd: iff classification of a particular cheese.

0406 20 — Grated or powdered cheese, of all kinds: I — The relevant provisions

0406 20 10 Glarus herb cheese...

0406 20 90 Other

3. The Commission has published a number Point 1 is replaced by the following: of explanatory notes in order to standardize the application of the Combined Nomencla- ture for the classification of goods. The 1989 version states, with regard to subheading 0406 20 10, that it includes grated or pow- dered cheese of all kinds and, as regards sub- heading 0406 20 90, that it includes grated cheeses, usually used as seasonings. They are obtained from hard cheeses (for example, Grana, Parmigiano-Reggiano, Emmental, "1. Grated cheeses, usually used as season- Reggianito, Sbrinz, Asiago, Pecorino, etc.). ings or for other purposes in the food- These grated cheeses have been partially processing industry. They are most dehydrated with a view to ensuring the long- often obtained from hard cheeses (for est possible preservation. example, Grana, Parmigiano-Reggiano, Emmental, Reggianito, Sbrinz, Asiago, Pecorino, etc.). These cheeses may have been partially dehydrated with a view to ensuring the longest possible preserva- tion. 4. In 1990 the Commission published fur- ther explanatory notes 4 relating to the abovementioned tariff subheadings and read- ing as follows:

'0406 20 10 This classification also covers cheeses which, after grating, are agglomerated.'"

and Cheese, grated or powdered, of all kinds

5. The Commission subsequently adopted Regulation (EEC) N o 316/91 of 7 February 0406 20 90 1991, concerning the classification of certain goods in the Combined Nomenclature. 5 The annex to that regulation reads as follows:

4 — Document 90/C 263/08 of 18 October 1990 (OJ 1990 C 263, p. 10), published in accordance with Article 10(1) of Regu- lation No 2658/87 as amended by Regulation (EEC) No 2472/90 (OJ 1990 L 247, p. 1). 5 — OJ 1991 L 37, p. 25.

3. When ... goods are prima facie classifiable under two or more headings, 1. The titles of sections, chapters and sub- classification shall be effected as follows: chapters are provided for ease of refer- ence only; for legal purposes, classifica- tion shall be determined according to the terms of the headings and any relative section or chapter notes and, provided (a) The heading which provides the such headings or notes do not otherwise most specific description shall be require, according to the following pro- preferred to headings providing a visions. more general description...

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(b) ... follows from the rules that subheading 0406 90 11 covers other cheeses, that is to say cheeses other than those quoted in the four other subdivisions of tariff heading 0406 (Cheese and curd) and which are 'for pro- cessing'. Processing is a broad legal term (c) When goods cannot be classified by covering the manufacture (production) of a reference to 3(a) or (b), they shall be new product following processing or work- classified under the heading which ing of the raw material. occurs last in numerical order among those which equally merit consider- ation.

II — Facts

6. For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subhead- 8. The company Fábrica de Queijo ERU ing notes and mutatis mutandis to the above Portuguesa, Lda ('ERU') imported into Por- rules, on the understanding that only sub- tugal, under import declaration N o 14595 headings at the same level are comparable. issued by the Delegação Aduaneira de For the purposes of this rule the relative sec- Xabregas de l'Alfândega de Lisboa (Lisbon tion and chapter notes also apply, unless the Customs Administration) on 20 March 1989, context otherwise requires.' 1 110 boxes containing cheese from the Netherlands packaged in plastic bags each containing about 15 kg.

15. O n the basis of the foregoing consider- ations, it considered that the cheese in ques- tion did not meet those requirements, since it is in the form of a compact block, that is to say in a form in which it cannot be sold directly to consumers, and furthermore it has 12. ERU challenged the decision of the Tri- a high moisture content and breaks down bunal Técnico de Primeira Instância before into irregular granules on exposure to the the Tribunal Técnico de Segunda Instância atmosphere. It therefore held that the cheese (Technical Court of Second Instance). That had the characteristics of a product which court delivered a ruling confirming the tariff was unfinished or in the course of processing classification adopted at first instance. and should consequently be classified under subheading 0406 90 11.

16. The plaintiff brought an appeal against 13. It held that the goods in question, that judgment of the Tribunal Técnico de described on the invoice as grated cheese, Segunda Instância before the Tribunal Tribu- were in fact cheese paste in irregularly shaped compact blocks weighing 15 kg, packaged in plastic bags. As tariff heading 6 — The reference order sutes that, according to the literature on 0406 20 covers 'Grated or powdered cheese, the subject, grated cheese is obtained from very dry cheese (Gruyère, Comté, Parmesan, etc.) and is usually used to of all kinds' that is to say cheese reduced to sprinkle on dishes before grilling or baking them but mav small pieces or very small granules, cheese also be served separately to add to soup, particularly fish soup (Dictionnaire des Fromages, R. J. Courtine, Librairie appearing in any other form (for example in Larousse, p. 196).

17. Being in doubt as to the interpretation of certain provisions of Community law which in its view apply to the matter at issue, the Supremo Tribunal Administrativo, by order of 25 January 1995, referred the following questions to the Court of Justice for a pre- (3) In the event of either of the foregoing liminary ruling: questions being answered in the nega- tive, is account to be taken in this case of the explanatory notes to the Combined Nomenclature of the European Commu- nities in the version referred to in Offi- cial Journal N o C 263 of 18 October 1990, p. 10, or of the previous explana- 'In view of the fact that, on 20 March 1989, tory notes? there was presented to the Portuguese Cus- toms Authorities for release into free circula- tion or for another customs procedure cheese coming from a Community country, described by the exporter as grated cheese, which had been ground and subjected to an industrial process in which oxygen was replaced by an injected nitrogen/002 solu- (4) In either case, under which of the two tion, in order to enhance its preservation, tariff headings mentioned above is the and then packaged and compacted in plastic said cheese to be classified?' 7 bags, each containing about 15 kg, with a high moisture content, having the appearance of a compact mass or paste, which, after 7 — As the Commission rightly remarks in its written observa- unpacking and exposure to the atmosphere tions, the phrase 'by an injected nitrogen/002 solution' should be replaced by the phrase 'by a nitrogcn/C02 (car- breaks down into irregular granules, the fol- bon dioxide) mixture'. The representatives of the Portuguese Republic and of the Commission also made this point at the lowing questions arise: hearing.

22. I must emphasize in this connection that 20. Citing Article 9(1 )(e) of Regulation N o Regulation N o 316/91 has the character of a 2658/87, under which the Commission is tariff classification regulation. The Court has required to adopt 'amendments to the Com- consistently held that 'a regulation specifying bined Nomenclature intended to adapt it to the conditions for classification in a tariff take account of technological or commercial heading or subheading is of a legislative developments or aimed at the alignment or nature and cannot have retroactive effect'.8 clarification of texts' and Article 10(2) of the In the light of that case-law, I consider that same regulation, under which the Commis- Regulation N o 316/91 cannot have retroac- sion is required to adopt measures which tive effect. will be immediately applicable, ERU claims that the abovementioned Article 10 acknowl- edges the principle that an interpretative pro- 8 — Case 158/78 Biegi v ilaupizolUml Bochum [1979] ECR vision forms part of the provision inter- 1103, paragraph 11.

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9 — Sec, for example, Case C - l l / 9 3 Siemens Nixdorf [1994] E C R 1-1945, paragraph 11, Case C-219/89 WeserGold [1991] E C R 1-1895, paragraph 6, and Case 62/77 Carlsen- 11 — Case 798/79 HauptzoUamt Kbln-Rheinau v Chem-Tec Verlag v Oberfmanzdirektion Köln [1977] ECR 2343, para- [1980] ECR 2639, paragraph 11. graph 3. 12 — Sec also Joined Cases 69/76 and 70/76 Dittmeyer v Haupt- 10 — Sec Siemens Nixdorf, cited above, paragraphs 11 and 17, Zollamt Hamburg-Wakershof [1977] ECR 231 and Joined and the Opinion of Advocate General Jacobs in the same Cases C-106/94 and C-139/94 Co/in and Dupri [1995] case, point 17. E C R 1-4759, paragraph 21.

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ERU PORTUGUESA v ALFÂNDEGA DE LISBOA

29. In the present case, the imported cheese 31. In the light of those considerations, I was a Dutch cheese of the Gouda type, think the reference in the 1989 Explanatory grated and packaged in accordance with a Note to grated cheese obtained from the special procedure. If, as the Commission has hard cheeses cited by way of example, which pointed out, the wording of the 1989 having been grated are packaged in accord- Explanatory Note meant that this grated ance with a certain procedure (after partial cheese, which appeared on import in the dehydration) and are usually used as season- form of a compact mass, was not one of the ings, did not exclude similar products cheeses classified under tariff subheading obtained from some other type of cheese, 0406 20 90 and must therefore be classified packaged in accordance with a different pro- under a different tariff heading even though cedure and intended for different purposes it was clear from the wording of the tariff (other purposes in the food-processing subheading of the Common Customs Tariff industry). It is sufficient that they have the and from the characteristics of the cheese characteristics of grated cheese. The 1989 itself that the appropriate subheading was Explanatory Note thus contained a lacuna subheading 0406 20 90, that would mean that regarding the imported product in question, the Explanatory Note altered the meaning of a lacuna that the fuller 1990 Explanatory the provision of the Common Customs Tar- Note sought to fill. iff. However, the Court has held that that is not permissible. 16

35. The Portuguese Government, on the other hand, contends that the imported product did not have the objective character- C — The first and fourth questions istics of grated cheese at the time of customs clearance, as it was still necessary to employ a special procedure to break it down before it could be offered to the final consumer. It emphasized the point that even if the prod- uct was regarded as agglomerated at the time of importation, within the meaning of Regu- 33. In the first and fourth questions, the lation N o 316/91, it did not have the other national court asks whether the Combined characteristics of grated cheese and should Nomenclature of the Common Customs therefore be classified not under subheading Tariff is to be interpreted as meaning that a 0406 20 90 but under subheading 0406 90 11. cheese having the characteristics described in the reference order is to be classified under tariff subheading 0406 20 90 or, if not, to what extent it may be classified under sub- heading 0406 90 11.

37. According to the reference order, before it had before packaging. 1S An analysis of the it was packaged the imported cheese was case-law on the processing of products with grated cheese, as ERU claims. It lost the a view to manufacturing new products characteristics of grated cheese as a result of inclines me to take the same view. 19 the procedure to which it was subjected when it was packaged with a view to ensur- ing the longest possible preservation. 40. Having regard to the foregoing consider- ations, I consider that the procedure consist- ing of removing the nitrogen/carbon dioxide solution from the imported product does not constitute processing, as the purpose of that procedure is not to create a new product but to restore the product to its original form of grated cheese. In other words that procedure 38. Moreover, as I have already observed, does not constitute 'processing' within the the steps taken to reverse the preservation meaning of subheading 0406 90 11. procedure are not intended to create a new variety of cheese but to neutralize that pro- cedure so that the cheese can be offered to the consumer in its original form, that is to 41. The answer to the question referred by say to produce grated cheese as it was when the national court should therefore be that it was imported, packaged in bags. the Combined Nomenclature of the Com- mon Customs Tariff must be interpreted as meaning that a cheese 'which has the charac- teristics described in the reference order is to be classified under tariff subheading 0406 20 90.

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V — Conclusion

42. Having regard to those considerations, I propose that the Court reply as fol- lows to the questions submitted by the Supremo Tribunal Administrativo for a pre- liminary ruling:

(1) Commission Regulation (EEC) N o 316/91 of 7 February 1991 concerning the classification of certain goods in the Combined Nomenclature lays down the conditions for classification under a tariff heading or subheading; it is not binding on national authorities who are called upon to determine the tariff classification of goods imported before it entered into force, on the basis of the objective characteristics of those goods.

(2) Explanatory notes published after the facts in the case may also be taken into account by national authorities for the purpose of determining the tariff clas- sification of an imported product; it is sufficient that it be clear from an exami- nation of the objective characteristics of the product that the meaning of the applicable provision of the Common Customs Tariff is not thereby altered.