C-105/96

JUDGMENT OF 17. 6. 1997 — CASE C-105/96

J U D G M E N T O F T H E C O U R T (First Chamber) 17 June 1997"

In Case C-105/96,

R E F E R E N C E to the Court under Article 1 7 7of the EC Treaty by the Supremo Tribunal Administrativo for a preliminary ruling in the proceedings pending before that court between

Codiesel — Sociedade de Apoio Técnico à Indústria Lda

and

T H E C O U R T (First Chamber),

composed of: L. Sevón, President of the Chamber, D. A. O . Edward (Rapporteur) and P. Jann, Judges,

Advocate General: N . Fennelly, Registrar: R. Grass,

after considering the written observations submitted on behalf of:

— Codiesel — Sociedade de Apoio Técnico à Indústria Ld", by João Teixeira Alves, of the Lisbon Bar;

— the Portuguese Government, by Luís Fernandes, Director of the Legal Service in the European Communities Directorate-General at the Ministry of Foreign Affairs, and Rui Barreira, Adviser to the Legal Studies Centre of the Presi- dency of the Council of Ministers, acting as Agents;

Judgment

1 By order of 28 February 1996, received at the Court on 1 April 1996, the Supremo Tribunal Administrativo (Supreme Administrative Court) referred for a prelimi- nary ruling under Article 177 of the EC Treaty two questions on the interpretation of Council Regulation (EEC) N o 950/68 of 28 June 1968 on the Common Cus- toms Tariff (OJ, English Special Edition 1968(1), p. 275), as amended by Council Regulation (EEC) N o 3331/85 of 5 December 1985 (OJ 1985 L 331, p. 1, hereinaf- ter 'the Nomenclature').

2 Those questions have arisen in a dispute between Codiesel — Sociedade de Apoio Técnico à Indústria Ld a , a company established under Portuguese law (hereinafter 'Codiesel'), and the Conselho Técnico Aduaneiro (Customs Examination Board) in regard to the tariff classification of an electrical apparatus which constitutes a UPS (uninterruptible power supply) consisting of two cabinets (hereinafter 'the product in dispute'). The first cabinet consists of a rectifier/charger which feeds power from networks to an inverter and powers a battery, a D C / A C inverter which con- verts the current into regulated alternating current, and a static bypass switch allowing surges to be absorbed without overcharging (hereinafter 'the rectifier/ charger cabinet'). The second cabinet houses a sealed lead-acid accumulator battery which can operate independently for 30 minutes (hereinafter 'the accumulator cabinet').

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3 Tariff subheading 85.01. B. II, which forms part of Chapter 85 of Section XVI of the Nomenclature ('Machinery and mechanical appliances; electrical equipment, parts thereof') is worded as follows:

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JUDGMENT OF 17. 6. 1997 — CASE C-105/96

Community and statistics of trade between Member States (Nimexe) (OJ 1985 L 353, p. 1, hereinafter 'Nimexe'). Statistical subheading 85.01. B. II. f of tariff sub- heading 85.01. B. II includes 'static converters, rectifiers and rectifying apparatus'.

5 In addition, subheading 85.04. B. I, which also features in Chapter 85 of Section XVI of the Nomenclature, is worded as follows:

'85.04 Electrical accumulators:

A. For use in civil aircraft (a)

CODIESEL v CONSELHO TÉCNICO ADUANEIRO

3. When for any reason goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:

(a) The heading which provides the most specific description shall be preferred to headings providing a more general description.

(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets, which cannot be classified b y reference to 3(a), shall be classified as if they consisted of the material or com- ponent which gives them their essential character, in so far as this criterion is applicable.'

7 On 20 May 1986, Codiesel imported the product in dispute from France and declared it under tariff subheading 90 28 180 000 T of the Portuguese nomenclature ('other electronic apparatus for measuring electrical quantities'), corresponding to tariff subheading 90.28. A. II. a of the Nomenclature and, more particularly, sta- tistical subheading 90.28. A. II. a.5 of Nimexe.

8 The Examiner, Supervisory Examiner and, by a majority of its members, the Con- ference of Supervisory Examiners (Conferência dos Reverificadores) classified the product in dispute under tariff subheading 90 28 380 000 D of the Portuguese nomenclature ('regulators'), corresponding to tariff subheading 90.28. A. II. b of the Nomenclature and, more particularly, to statistical subheading 90.28. A. II. b.2 of Nimexe.

'1. Having regard to the facts held to be proved in part 3 of this judgment (above all those set out in paragraphs A to D and L, commencing on p. 7 and ending on p. 12) and the applicable Community provisions, is the dual tariff classifica- tion assigned to the goods in question by the Tribunal Técnico de I a Instância and later confirmed by the Tribunal Técnico de 2 a Instância and the Tribunal Tributário de 2" Instância correct?

2. If not, what is the proper tariff classification?'

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12 It should be noted at the outset that Article 177 of the Treaty is based on a clear separation of functions between national courts, on the one hand, and the Court of Justice, on the other, and that the latter is empowered solely to rule on the inter- pretation or validity of a Community measure on the basis of the facts indicated to it by the national court (see, in particular, Case 167/84 HauptzolUmt Bremen- Freihafen v Drünert [1985] ECR2235, paragraph 12).

1 3 However, in the event of questions having been improperly formulated or going beyond the scope of the powers conferred on it by Article 177, the Court is free t o extract from all the factors provided by the national court, and in particular from the statement of the grounds contained in the reference, the elements of C o m m u - nity law requiring an interpretation — or, as the case may be, an assessment of validity — having regard to the subject-matter of the dispute (see Case 83/78 Pigs Marketing Board v Redmond [1978] ECR2347, paragraph 26).

i7 The Court has consistently held that, in the interests of legal certainty and ease of verification, the decisive criterion for the classification of goods for customs pur- poses is in general to be sought in their objective characteristics and properties, as defined in the relevant headings of the Common Customs Tariff and the notes to the sections or chapters. Likewise, for the purpose of interpreting the Common Customs Tariff, both the notes which head the chapters of the Common Customs Tariff and the Explanatory Notes to the Nomenclature of the Customs Coopera- tion Council are important means for ensuring the uniform application of the Tar- iff and as such may be regarded as useful aids to its interpretation (see Case C-121/95 VOBIS Microcomputer v Oberfinanzdirektion München [1996] E C R 1-3047, paragraph 13).

is It is therefore first necessary to examine whether an electrical apparatus such as the product here in dispute falls to be classified in the Nomenclature pursuant to Gen- eral Rule 3(b), cited in paragraph 6 of this judgment, and, if necessary, to determine the essential character of that product.

i9 In this regard, Codiesel, basing itself on the conclusions of an expert technical opinion which it submitted to the Court, takes the view that the two cabinets con- tain an inseparable unit — the sole and indivisible function of which is to regulate and safeguard the power supply for computers — and that, in accordance with General Rule 3(b) and N o t e 3 to Section XVI of the Nomenclature, the tariff clas- sification must be made taking that function into account.

23 The applicability of that rule in the main proceedings in this case is corroborated by Rule 3(b), point VIII, of the General Rules for the Interpretation of the Nomenclature of the Customs Cooperation Council, which provides inter alia that it applies to goods with separable components, provided those components are adapted one to the other and are mutually complementary and that together they form a whole which it would be difficult to sell in different parts. It is com- mon ground that the static unit here at issue in the main proceedings does not function and does not perform the role for which it was constructed when it is separated from the accumulator battery.

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24 It is therefore necessary to examine, pursuant to General Rule 3(b), what is the essential character of the product in dispute. According to point VII of Rule 3(b) of the General Rules for the Interpretation of the Nomenclature of the Customs Cooperation Council, this character may be determined inter alia by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.

25 Since the product in dispute is an 'uninterruptible power supply' designed to regu- late and ensure a permanent power supply, it must be held, first, that the rectifier/ charger cabinet confers on it its essential character and, second, that the accumula- tor cabinet is of only secondary importance.

26 The accumulator battery in the accumulator cabinet constitutes, in summary, only an alternative source of accumulated energy designed to supply, within the limits of its autonomy, the inverter in the event of disruption or failure of the primary network of the rectifier/charger cabinet. Furthermore, the rectifier converts the alternating current into direct current which keeps the accumulator battery charged.

29 The costs incurred by the Portuguese Government and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main action, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

O n those grounds,

T H E C O U R T (First Chamber),

in answer to the questions referred to it by the Supremo Tribunal Administrativo by order of 28 February 1996, hereby rules:

Council Regulation (EEC) N o 950/68 of 28 June 1968 on the Common Cus- toms Tariff, as amended by Council Regulation (EEC) N o 3331/85 of 5 Decem- ber 1985, must be interpreted as meaning that an electrical apparatus which is an 'uninterruptible power supply' consisting, on the one hand, of a cabinet containing a rectifier/charger, an inverter and a static bypass switch and, on

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