JUDGMENT OF 15. 12. 1971 — CASE 21/71 BRODERSEN v EINFUHR- UND VORRATSSTELLE GETREIDE

In Case 21/71 Reference to the Court under Article 177 of the EEC Treaty by the Hessisches Finanzgericht for a perliminary ruling in the action pending before that court between

THE COURT composed of: R. Lecourt, President, J.Mertens de Wilmars and H. Kutscher, President of Chambers, A. M. Dormer, A. Trabucchi (Rapporteur), R. Monaco and P. Pescatore, Judges, Advocate-General: A. Dutheillet de Lamothe Registrar: A. Van Houtte

gives the following

JUDGMENT

Issues of fact and of law

I — The provisions applicable, facts and procedure

II — Observations submitted under Article 20 of the Protocol on the Statute of the Court

The first question

The second question

Grounds of judgment

Costs

I —. The provisions applicable, facts and procedure

(a). of barley, of an ash content, expressed as a ratio of the dry material, of less than 1 % (without talcum): according to the conversion rate of 100 kg for 220 kg of barley,

(b). of barley, in all cases: according to the conversation rate of 100 kg for 160 kg of barley

1. What must be understood by the terms

2. How are the two categories of products referred to under 1 above distinguished and in what does this distinction consist? In particular, in order that the product may be given the tariff classification described under 1 (b), is it necessary for the grains to have become approximately pearl-shaped (that is, almost spherical or ellipsoidal) and, therefore, for them to show no grooves or traces of embryo, or is it sufficient for almost all the pericarp to have been removed from the grain and for it to have been rounded at both ends, with the result that traces of embryo remain?'

II —. Observations submitted under Article 20 of the Protocol on the Statute of the Court

(a). the Explanatory Notes in the Brussels Customs Cooperation Council concerning heading 11.02 of the Common Customs Tariff;

(b). the decree of the Federal Minister of Finance adopted in relation to the Common Customs Tariff, as well as the Anweisung zum Abschöpfungstarif (instruction concerning the rate of levy) of 20 November 1964, III B 6 — Z 1777 — 7/64 (Bundeszollblatt 1964, p. 977et sea.);

(c). EEC Council Regulations Nos 19/62; 55/62, Article 5, 14 et seq.; 141/64, Article 14 et seq.; 120/67, Articles 5 and 14;

(d). Regulation No 821/68 of the Commission;

(e). the German decrees on refunds on the export of cereals of 30 July 1963 (Bundesgesetzblatt BGB1. I, 543), 5 August 1964 (BGB1. I, 578) and 24 November 1964 (BGB1. I, 917);

(f). directives from the Einfuhr- und Vorratsstelle für Getreide und Futtermittel (Bundesanzeiger No 222 of 27 November 1964, No 156 of 21 August 1965 and No 73 of 19 April 1966).

1. Since 30 July 1962 no explanatory notes of a binding nature have been issued regarding the goods subject to the agricultural market organization, nor are any being issued by the Commission;

2. The contents of the various German explanatory notes, which had no binding force but which have however been applied in practice are not the same;

3. The German decrees on refunds had acknowledged that a type of pearled barley exists which may have an ash content equal to or higher than 1 %;

4. The contradictory German practice which results from the decrees, instructions and directives does not correspond to current economic practices and concepts.

(a). Hulled grains: barley (geschliffen) are barley grains from which the bracts have been removed and which have been hulled to the point at which its ash content, expressed as a ratio of the dry material, does not exceed 1.3 %.

(b). pearled grains of hulled barley (geschält perlförmig geschliffen) are barley grains from which the bracts have been removed and which have been hulled (geschält und geschliffen) to the point at which their ash content, expressed as a ratio of the dry material, does not exceed 1.1 %.

1. Pearled grains: barley are husked barley grains from which practically the whole pericarp has been removed by an intensive reducing process (grinding) and the two ends of which are rounded in shape. Grain fragments rounded by grinding also form part of the same category.

2. Hulled grains: barley (Getreidekörner geschliffen, von Gerste) are all other husked barley grains (from which the bracts have been removed) which has been ground. It is to be regarded as husked barley (from which the bracts have been removed).

3. The Member states were empowered by virtue of the refund scheme established by Regulation No 19 to limit the grant of a refund on exports to third countries to pearled barley of a specific minimum quality and to fix the qualitative characteristics therefor.

1. By order of 25 February 1971, received at the Court Registry on 27 April 1971, the Hessisches Finanzgericht requested the Court to give a preliminary ruling on the interpretation of the terms of Hulled grains: barley and pearled grains: barley appearing in heading 11.02 of the Common Customs Tariff.

2. The file shows that through this request the Finanzgericht seeks to obtain information on which to establish whether the criteria adopted by the national authorities in order to identify pearled barley for the purposes of the refunds on exports to third countries provided for by Article 20 of Regulation No 19/62 of the Council (JO 1962, p. 933) were in accordance with Community law.

3. In accordance with this provision Regulation No 141 /64/EEC of the Council (JO No 169, p. 2666), which was in force during the period in question in this case, governed the power conferred upon each Member State to grant refunds on exports of processed cereal products to third countries by fixing criteria for determining the maximum amount of permitted refunds.

4. This regulation fixed higher maximum amounts for pearled barley than for hulled barley. The terms hulled grains and pearled grains are contained in the Annex to Regulation No 19/62 which refers, in this respect, to heading 11.02 of the Common Customs Tariff which distinguishes between hulled grains: barley and pearled grains: barley. In order to define these concepts in the absence of explanatory notes attaching to the Common Customs Tariff and in the light of the fact that this tariff heading exactly reproduced a heading in the Brussels Nomenclature, it is necessary to refer to the Explanatory Notes concerning that Nomenclature.

5. Within the context of the optional export refunds provided for by the above-mentioned regulations the Member States were bound, in order to respect the maximum amounts allowed by those regulations, to regard as pearled barley only those products which satisfied at least the conditions laid down by the Explanatory Notes to heading 11.02 in the document known as the Brussels Nomenclature. Therefore, although when fixing the conditions for the grant of the refunds which they decided freely to award, the Member States were bound to observe a certain number of rules or principles which were necessary to the application of the general scheme laid down by Regulation No 19, they had, on the other hand, the power to apply more restrictive criteria than those established by the Community rules. In particular, and without prejudice to the uniform scope of the concepts contained in the Common Customs Tariff, within the limited context of the regulations referred to above and to the extent to which they were free not to grant any export refund on pearled barley, the Member States were a fortiori empowered to limit this grant to types of this product which had additional characteristics to those required by the Community rules.

6. The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable, and as these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the Hessisches Finanzgericht, the decision as to costs is a matter for that court.

On those grounds, Upon reading the pleadings; Upon hearing the report of the Judge-Rapporteur; Upon hearing the observations of the parties to the main action and of the Commission of the European Communities; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community; Having regard to Regulation No 19/62 of the Council on the progressive establishment of the common organization of the market in cereals, especially Article 20; Having regard to Regulation No 141/64/EEC of the Council on the rules applying to processed cereal and rice-based products, especially Article 5; Having regard to the Protocol on the Statute of the Court of Justice of the European Economic Community, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities, THE COURT in answer to the questions referred to it by the Hessisches Finanzgericht by order of that court dated 25 February 1971, hereby rules:

I Within the context of the application of the scheme of optional refunds on exports of processed cereal-based products to third countries which is laid down in Article 20 of Regulation No 19/62 of the Council, Regulation No 141/64/EEC of the Council and Regulation No 60/66/EEC of the Commission, the Member States could only regard as pearled barley those products which satisfied at least the conditions laid down by the Explanatory Notes to heading 11.02 in the document known as the Brussels Nomenclature.

2 Within the context of the application of the abovementioned provisions, the national authorities were entitled to add to those minimum requirements other more restrictive conditions.