C-201/99

DEUTSCHE NICHIMEN

OPINION OF ADVOCATE GENERAL JACOBS delivered on 9 November 2000 1

1. In this case, the Finanzgericht (Finance are beamed towards earth in a process Court) Düsseldorf requests a preliminary known as downlinking. The downlink ruling on the interpretation of the Com- signal is collected by the satellite antenna bined Nomenclature. 2It wishes to know or dish and focused on the feedhorn, the whether 'satellite receivers' were included focal point assembly on the dish that in the definition of 'television receivers' in collects the signal, changes its polarity heading 8528 between 1990 and 1992 — and then sends it on to the low noise block as they have been since 14 May 1994 by down converter. This device [the down virtue of Commission Regulation converter] amplifies and converts a signal No 884/94 3— or whether another head- to enable the receiver to utilise it. The ing was more appropriate. receiver processes the signal and allows a viewer to select different channels.'

Description of the goods in issue

2. A helpful explanation of the technical context in which satellite receivers operate 3. The receivers in issue in the main is provided in one of the documents proceedings are described by the national produced by the Commission in response court in greater detail as: to a request from the Court for further information. 4 'Satellite television signals

4. The -Combined Nomenclature is the Community customs tariff nomenclature based on the world-wide Harmonised Sys- tem, 5 to which it is identical as regards the headings and six-digit subheadings, only the seventh and eighth digits forming subdivisions specific to the Combined Nomenclature. The headings are grouped The output provided by these satellite in chapters, themselves grouped in sections. receivers is not a red, green and blue (RGB) colour video signal but a composite video signal; of these, which include PAL, D2-MAC and SECAM signals, the receivers provide only a PAL signal in PAL-G or PAL-I format at a particular frequency, so that the tuner of the television or radio apparatus only has to be tuned to that 5. It is not disputed that satellite receivers frequency once in order to be able to use fall to be classified in Chapter 85 of that the satellite receiver. nomenclature — 'Electrical machinery and equipment and parts thereof; sound recor- ders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles' — which is part of Section XVI.

7. Heading 8525: 'Transmission apparatus covers 'aerials and aerial reflectors of all for... television, whether or not incorpor- kinds; parts suitable for use therewith', ating reception apparatus ...'. Subheading together with 'other' parts, including three 8525 20 is for transmission apparatus specific categories which are not relevant incorporating reception apparatus. here and a final residual subheading again entitled 'other'. In the first category (aerials and aerial reflectors), subheading 8529 10 31 has been put forward as a possibly appropriate classification. It is for 'Aerials — Outside aerials for radio or television broadcast receivers — For reception via satellite' 8. Heading 8528: 'Television receivers (including video monitors and video pro- jectors), whether or not incorporating 7 radio-broadcast receivers or sound or video recording or reproducing apparatus'. 8This heading is divided into colour and mono- chrome receivers. The subdivision for col- our receivers 9 lists television projection equipment, apparatus incorporating a video recorder or reproducer, video moni- 10. Heading 8543: 'Electrical machines tors with or without a cathode-ray tube and and apparatus, having individual functions, other equipment with integral tube, before not specified or included elsewhere in this going on to 'other' equipment, which may chapter'. This heading lists specifically be with or without a screen. The latter particle accelerators, signal generators, category includes subheadings 8528 10 91, machines and apparatus for electroplating, 'video tuners', and 8528 10 98, 'other'. electrolysis or electrophoresis, before going on to 'Other machines and apparatus', which include subheadings 8543 80 20, 'Aerial amplifiers', and 8543 80 80, 'Other', although up to and including 1990, the contents of those two subhead- ings were grouped together under subhead- ing 8543 80 90, 'Other'. Finally, subhead- 9. Heading 8529: 'Parts suitable for use ing 8543 90 is for parts falling under the solely or principally with the apparatus of heading. heading Nos 8525 to 8528'. This heading

12. On several occasions in 1991 and 1992 Deutsche Nichimen, the applicant in the main proceedings, declared the release into free circulation of imported satellite recei- vers under subheading 8543 80 20 (aerial amplifiers), thus paying customs duty at 15. The national court, having examined 7%. The goods had been in private customs the various Community and WCO expla- warehousing since 1990. natory notes to the headings and subhead- ings contended for, and considering that it cannot apply Regulation No 884/94 retro- actively, is in doubt as to the correct classification. It takes the view, however, that it is necessary in this case to determine only the relevant heading and not necessa- 13. In 1992, Hauptzollamt (Principal Cus- rily the subheading. It has therefore asked toms Office) Düsseldorf, the defendant in the Court to rule on the following ques- tions:

10 — Cited above in note 2. In 1996, subheading 8528 10 was renumbered 8528 12. In 1998 (by Commission Regulation (EC) No 2086/97 of 4 November 1997 amending Annex I to Regulation No 2658/87, OJ 1997 L 312, p. 1), the sub- subheadings of 8528 12 were rearranged, and since Commission Regulation (EC) No 936/1999 of 27 April 1999 amending or repealing certain regulations on the classification of goods in the Combined Nomenclature, OJ 1999 L 117, p. 9, satellite receivers have been classified '1. Is the definition of television receivers under subheading 8528 12 95, for video tuners which are not intended to be incorporated into automatic data in heading No 8528 of the Combined processing machines and are neither digital nor mixed digital and analogue. Nomenclature in the version in force 11 — Equivalent to the former subheading 8528 10. from 1990 to 1992 to be interpreted as

2. If Question 1 is answered in the 17. In that regard, the national court is not negative: Is the definition of parts in concerned with subheadings, since it wishes heading No 8529 of the Combined merely to determine the correct rate of Nomenclature or in Note 2(b) to customs duty, which was 14% for all the Section XVI of the Combined Nomen- subheadings of heading 8528 and 7.2% for clature in the version in force from all the conceivable subheadings of heading 1990 to 1992 to be interpreted as 8529 throughout the relevant period. including devices such as the satellite receivers more precisely described in the grounds of this order, and are those devices then to be classified under heading No 8529 of the Combined Nomenclature despite Note 2(b) to Section XVI of the Combined Nomen- 18. In addition to headings 8528 and 8529, clature?' however, headings 8525 and 8543 have also been mooted as possible classifica- tions.

Analysis

Headings 8525 and 8543

Scope of the question 19. Although at the national level the applicant has apparently argued principally for classification under heading 8543, it does not do so in its submissions to the 16. The question put by the national court Court, nor is the heading referred to in the boils down to this: were the goods in issue Finanzgericht's questions. Heading 8525

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OPINION OF MR JACOBS — CASE C-201/99

24. The first of those questions relates to 22. Heading 8543 is a residual heading — heading 8528, and the second is raised only in other words, it is for goods not specified in the event of a negative answer to the or included elsewhere in the chapter. It first. Indeed, as the Commission has comprises a number of specific subheadings pointed out, heading 8529 is subsidiary to for named goods and two residual sub- heading 8528, in that it is first necessary to headings, one for 'other' machines and consider what is meant by a television

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DEUTSCHE NICHIMEN

receiver before it can be determined whe- ther the latter is incorporated with the ther an item is a part suitable for use with receiver (as will often be the case) or not. such a receiver. However, if the item is already found to fall within the first category, it is not merely unnecessary but unwarranted to look any further.

27. To that extent, 'reception apparatus for television', a term which replaced 'televi- sion receivers' in 1996 in the English — Heading 8528 version of the heading, seems a better and clearer description. That change of wording has been discussed during the proceedings, but I do not think it can be adduced as evidence that the content of heading 8528 was any narrower before that date. On the contrary, I take it to confirm that the tenor of the broader formulation applied also before 1996. 25. I shall therefore consider first whether, as contended by the defendant Hauptzol- lamt in the national proceedings, satellite receivers fell under heading 8528 during the relevant period as they have done since 1994.

29. As the Court has consistently held, 'in 32. In its observations to the Court, the interests of legal certainty and for ease Deutsche Nichimen starts by pointing out of verification, the decisive criterion for the that the 'television receivers' referred to in classification of goods for customs pur- heading 8528 are not 'television receivers' poses is in general to be sought in their in the everyday sense of the word, since objective characteristics and properties as they include goods some of which possess defined in the wording of the relevant neither screen nor loudspeaker. In order to heading of the CN'. 14 In addition, 'the determine their nature, therefore, recourse intended use of a product may constitute an must be had to the wording of the sub- objective criterion for classification if it is headings. inherent to the product, and that inherent character must be capable of being assessed on the basis of the product's objective characteristics and properties'. 15

33. However, it argues, the satellite recei- 30. The objective characteristics and prop- vers in issue cannot conceivably be classi- erties of the satellite receivers in issue are in fied under any of the subheadings of head- my view accurately described in heading ing 8528 other than, possibly, 8528 10 91 8528. Such devices are designed — and 'video tuners' or 8528 10 98 'other'. They this is an inherent feature, capable of being are not (and here I agree) video monitors, assessed on the basis of their objective they are not video recorders or reproducers characteristics and properties — to receive or apparatus incorporating such, they are television signals from aerials and convert not television projection equipment and them into a form which can be processed they do not have an integral tube or a for display on a screen. screen of any sort.

to the Harmonised System. 16 Moreover, heading 8528; if so, the fact that they are the fact that they are described as 'similar not covered by any of its specific subhead- to video tuners' in Note 4 to heading 8528 ings does not mean that they cannot fall in the current version of those notes within the residual subheading for 'other' demonstrates that they are not video apparatus. tuners. To that extent, Deutsche Nichimen appears to be arguing that the classification made in Regulation No 884/94, which includes satellite receivers under subhead- ing 8528 10 91 'video tuners', is incorrect. However, it then states that they cannot be included under the following subheading 8528 10 98 'other', because they are clas- sified as 'video tuners' by Regulation No 884/94, thereby apparently assuming 37. Second, it is only if the classification in that the classification therein is correct Regulation No 884/94 is correct, and in (although denying it any retroactive effect). particular was correct at the material time, From all of the above, it concludes that the that it can preclude classification under satellite receivers in issue cannot be classi- subheading 8528 10 98 'other'; in that fied under any of the subheadings of head- case, however, the question is already ing 8528 and thus cannot be classified resolved because the correct classification under that heading at all. is by definition subheading 8528 10 91. If, on the other hand, it was incorrect, then subheading 8528 10 98 is the logical clas- sification for any 'television receiver' not identified in any other subheading.

42. Further support may be derived from the subsequent classification under that heading by the Commission in Regulation No 884/94. Whilst a regulation classifying goods under a particular tariff heading or 40. Such thinking seems to me to be subheading, being of a legislative nature, misguided. The question being whether cannot have retroactive effect, 18 I pointed satellite receivers fall under heading 8528 out in my Opinion in Siemens 19 that the or not, it makes no difference that they may form of such regulations, which generally not be video tuners under subheading state (as is the case with Regulation 8528 10 91 as long as they can be 'other' No 884/94) that classification is deter- apparatus without a screen under subhead- mined by the provisions of the general ing 8528 10 98, and I can see no reason to rules for the interpretation of the nomen- exclude them from that category. In any clature and by the wording of the relevant event, as the national court points out in its headings and subheadings, suggests that the order for reference, the terms of the head- legislature takes the view that the classifi- ing and subheadings give no indication that cation enacted in fact follows from the any particular quality of signal is a neces- legislation already in force. sary criterion for classification. The refer- ence in the explanatory notes to the Har- monised System to the frequency of the signals sent by a video tuner to a video monitor need not concern items which are merely similar to (and must thus in some respects differ from) video tuners and there is certainly no reason why it should apply to 'other' equipment under a different 43. The support provided by such a sub- subheading. sequent regulation — in so far as it con- firms a conclusion already reached as to the proper classification — is of course con- fined to cases where, as here, there has been no intervening material change to the

'... parts of machines ... are to be classified according to the following rules:

44. Having reached the view that the national court's first question is to be answered in the affirmative, I consider it unnecessary to examine the second ques- (a) Parts which are goods included in any tion concerning heading 8529. Moreover, of the headings of Chapter ... 85 ... are as the national court points out, satellite in all cases to be classified within their receivers are not 'parts' in any normal respective headings. acceptance of the term, but independent appliances.

20 — Although the subheadings of heading 8528 and their wording were quite extensively modified bv Commission Regulation (EEC) No 2505/92'of 14 July 1992 amending Annexes I a n d II to Council R e g u l a t i o n (EEC) No 2658/87, OJ 1992 L 267, p. 1 - between the mate- rial period here and the adoption of Regulation N o 884/94 — those amendments concerned only the |b) Other parts, if suitable for use solely or dimensions, width/height ratios and scanning parameters of screen equipment, criteria which have no bearing on the principally with a particular kind of classification in the present case. machine, or with a number of

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OPINION OF MR JACOBS — CASE C-201/99

machines of the same heading... are to 47. Since parts suitable for use solely or be classified with the machines of that principally with television receivers have kind. ...' their own heading (they are goods included in a heading of Chapter 85, namely heading 8529), they fall to be classified under that heading in accordance with Note 2(a) and there is thus no need for recourse to Note 2(b).