C-164/95

ERU PORTUGUESA v ALFANDEGA DE LISBOA

J U D G M E N T O F T H E C O U R T (Fourth Chamber) 17June 1 9 9 7 '

In Case C-164/95,

R E F E R E N C E to the Court under Article 177 of the EC Treaty by the Supremo Tribunal Administrativo for a preliminary ruling in the proceedings pending before that court between

Fábrica de Queijo Eru Portuguesa Lda

and

composed of: J. L. Murray, President of the Chamber, P. J. G. Kapteyn and H . Ragnemalm (Rapporteur), Judges,

Advocate General: G. Cosmas, Registrar: H . von Holstein, Deputy Registrar,

after considering the written observations submitted on behalf of:

— Fábrica de Queijo Eru Portuguesa Ld1, by R. Vasco Lavrador, of the Lisbon Bar;

— the Portuguese Government, by L. Fernandes, Director of the Legal Service of the European Communities Directorate-General in the Ministry of Foreign Affairs, and L. A. Máximo dos Santos, Assistant in the Lisbon Law Faculty, acting as Agents;

— the Commission of the European Communities, by F. de Sousa Fialho, of its Legal Service, acting as Agent,

Judgment

1 By judgment of 25 January 1995, received at the Court on 29 May 1995, the Supremo Tribunal Administrativo (Supreme Administrative Court) referred for a preliminary ruling under Article 177 of the EC Treaty four questions on the inter- pretation of subheadings 0406 20 90 and 0406 90 11 of Council Regulation (EEC) N o 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1987 L 256, p. 1, hereinafter 'the C N ' ) , as amended by Commission Regulation (EEC) N o 3174/88 of 21 September 1988 amending Annex I to Regulation (EEC) N o 2658/87 (OJ 1988 L 298, p. 1) and by Commis- sion Regulation (EEC) N o 316/91 of 7 February 1991 concerning the classification of certain goods in the combined nomenclature (OJ 1991 L 37, p. 25).

2 Those questions have arisen in a dispute between the company Fábrica de Queijo Eru Portuguesa Ld a (hereinafter 'Eru Portuguesa') and the Alfândega de Lisboa (Tribunal Técnico Aduaneiro de 2 a Instância) (Lisbon Customs Authority (Special- ized Customs Court of Second Instance)) (hereinafter 'the Customs Authority') concerning the customs classification of cheese imported into Portugal from the Netherlands.

3 At the material time, that is to say, in 1989, the transition period provided for in the Treaty governing the accession of the Portuguese Republic to the European Communities, during which a national customs tariff continued to apply in certain circumstances, was still in force.

4 O n 20 March 1989, Eru Portuguesa imported 1 110 cartons of cheese from the Netherlands, packed in plastic bags each weighing some 15 kg. The packed cheese had the appearance of a paste or compact mass. After unpacking and exposure to the surrounding air, it broke down into irregular granules. O n the exporter's invoice, the cheese was described as 'grated cheese'.

0406 20 10 — Glarus herb cheese (known as Schabziger) made from skimmed milk and mixed with finely ground herbs

0406 20 90 — Other

— subheading 0406 90 11:

0406 90 — Other cheese:

0406 90 11 — For processing.

7 When the product in question was imported, the Explanatory Notes on the Com- bined Nomenclature of the European Communities published by the Commission regarding subheading 0406 20 90 were worded as follows:

9 According to Point 1 of the Annex to Regulation N o 316/91, 'Grated cheese which as a result of its high moisture content and conditions of transport or packaging (partially vacuum packed) becomes agglomerated' is classified under subheading 0406 20 90.

io Eru Portuguesa instituted proceedings against the decision of the Customs Auth- ority before the Tribunal Tributário de 2 a Instância (Tax Court of Second Instance), which deals with actions brought against decisions at final instance delivered by special customs appeal boards. That court confirmed the decisions of the Customs Authority.

1 1 O n appeal, the Supremo Tribunal Administrativo decided to stay the proceedings and to refer the following four questions to the Court:

'In view of the fact that, on 20 March 1989, there was presented to the Portuguese Customs Authorities for release into free circulation or for another customs pro- cedure cheese coming from a Community country, described by the exporter as grated cheese, which had been ground and subjected to an industrial process in

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JUDGMENT O F 17. 6. 1997 — CASE C-164/95

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ERU PORTUGUESA v ALFANDEGA DE LISBOA

1 3 The Court has consistently held that, in the interests of legal certainty and ease of verification, the decisive criterion for the customs classification of goods must be their objective characteristics and properties, as defined by the wording of the headings of the Common Customs Tariff and the notes to the sections or chapters (Joined Cases C-274/95, C-275/95 and C-276/95 Wünsche v HauptzolUmt Hamburg-Jonas [1997] ECR1-2091, paragraph 15). Likewise, the notes preceding the chapters of the Common Customs Tariff and the explanatory notes drawn up by the Customs Cooperation Council are important means for ensuring the uni- form application of the Tariff and may be an important aid to the interpretation of the scope of the various tariff headings but do not have any legally binding force (see Joined Cases C-106/94 and C-139/94 Colin and Dupré [1995] ECR 1-4759, paragraph 21, and Case C-121/95 VOBIS Microcomputer v Oberfinanzdirektion München [1996] ECR 1-3047, paragraph 13).

u According to Annex I to Regulation N o 3174/88, the general rules for the inter- pretation of the C N applicable at the time of the facts in the main proceedings provided that where goods are prima facie classifiable under two or more headings, the heading which provides the most specific description is to be preferred to headings providing a more general description (Rule 3(a)) and that, for legal pur- poses, the classification of goods in the subheadings of a heading are to be deter- mined according to the terms of those subheadings and any related subheading notes, on the understanding that only subheadings at the same level are compa- rable (Rule 6).

i9 This finding is supported both by the 1989 Explanatory Notes and those of 1990.

20 According to the 1989 Explanatory Notes, subheading 0406 20 90 includes grated cheeses usually used as seasonings, but does not exclude those used for other pur- poses. While the 1989 Notes state in their explanations that grated cheeses 'are obtained from hard cheeses', the fact that even that aspect is not exhaustive is made clear by the 1990 Notes, which add that grated cheeses are 'most often' obtained from hard cheeses. The 1990 Notes further specify that 'this classification also cov- ers cheeses which, after grating, are agglomerated'.

2i It follows that, in so far as the case involves cheese which was grated prior to packaging and broke down into irregular granules after unpacking and exposure to the surrounding air, neither the fact that the product in question is obtained from a type of cheese having a moisture content greater than that normally used to pro- duce grated cheese nor the method of packaging or preservation of the product can, for purposes of the C N , deprive it of its objective characteristic as grated cheese.

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ERU PORTUGUESA v ALFÂNDEGA DE LISBOA

22 Accordingly, without its being necessary to consider whether Regulation N o 316/91 is applicable, the answer to the questions submitted must be that sub- heading 0406 20 90 of Regulation N o 2658/87, as amended by Regulation N o 3174/88, must be interpreted as including grated cheese which, when imported, is, by reason of the method of packaging and preservation used, in an agglomer- ated form and, after unpacking and exposure to the surrounding air, breaks down into irregular granules.

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JUDGMENT OF 17. 6. 1997 — CASE C-164/95

preted as including grated cheese which, when imported, is, by reason of the method of packaging and preservation used, in an agglomerated form and, after unpacking and exposure to the surrounding air, breaks down into irregu- lar granules.

Murray Kapteyn Ragnemalm

Delivered in open court in Luxembourg on 17 June 1997.

R. Grass J. L. Murray