JUDGMENT OF 26.4.1972 — CASE 92/71 INTERFOOD v HAUPTZOLLAMT HAMBURG

In Case 92/71 Reference to the Court under Article 177 of the EEC Treaty by the Finanzgericht Hamburg for a preliminary ruling in the action pending before that court between

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

gives the following

JUDGMENT

Issues of fact and of law

I— Summary of the facts and procedure

Question I

Question II

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

A — Observations submitted by Interfood GmbH

The first question

The second question

B — Written observations submitted by the Government of the Federal Republic of Germany

The first question

The second question and as an alternative

C — Written observations submitted by the Commission of the European Communities

The first question

The second question

Grounds of judgment

The first question

Costs

I—. Summary of the facts and procedure

1. The Interfood undertaking obtained customs clearance for 500 containers of apricots from Spain holding less than 5 kg but more than 4.5 kg without spirit. The customs office took three containers as samples for analysis and found that the average sugar content was 9.2 % by weight. The customs office considered that the goods must be classified under subheading 26.06 B II(a) 6(bb) and imposed customs duties at the rate of 22.4 %.

2. A copy of the order making the reference was lodged at the Court Registry on 9 November 1971.

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

A —. Observations submitted by Interfood GmbH

(a). Interfood recalls that prior to the entry into force of Regulation No 865/68 of the Council and the introduction of the. additional notes to Chapter 20 of the Common Customs Tariff the distinction between the two subheadings in dispute presented no problem since the tariff classification of the products was decided solely on the basis of the sugar actually added. Following the introduction of the additional notes the practice regarding tariff classification underwent a modification. The customs administration thereafter checked the sugar content of the product exclusively by the refractometric method prescribed in Regulation No 865/68 without endeavouring to determine whether such sugar was natural or added.

(b). In addition Interfood maintains as an alternative that the conclusions thus drawn cannot be modified if Additional Note No 2 is regarded as a legal definition. The word gelten appearing in this note and in Article 2(3) of Regulation No 865/68 does not imply that each time the legislature used this word it intended to establish an irrebuttable presumption regarding certain factual elements for, as the judgment in Case 3/71 shows, this word may, taking account of the objectives and of the overall plan of the rules, constitute a simple presumption. According to the preamble to Regulation No 865/68 its essential aim is to bring the trading system for processed products into line with that laid down for sugar and cereals. Far from merely embracing the imposition of the levy on the sugar contained in processed products, the trading system involves first and foremost the application of the customs duties provided for by the Common Customs Tariff. It is precisely the amount of such duties which indicates whether or not sugar has been added to the product during processing.

(c). Interfood adds that in any event the interpretation of the disputed Note 2 as a legal definition based on a fiction amounts to ignoring the fact that the Finanzgericht Hamburg has already pointed out in its order of reference that one and the same concept (the addition of sugar) must not be differently interpreted in the same chapter, in one place as a simple presumption and in another as an irrebuttable presumption according as the liability of a product to the levy or its classification in the Common Customs Tariff is concerned.

(d). Interfood finally recalls a decision of the Federal Ministry of Finance of 8 July 1971 (Annex 1) which, following the judgment of the Court in Case 3/71, instructs the customs services to impose the levy only in cases where the percentage of sucrose by weight is exceeded and the importer cannot prove that the sugar was not added to the relevant product. Moreover the principal customs offices were instructed to draw up a report to that Ministry for 1 September 1971 regarding the findings made in this respect. Interfood requests that the outcome of those reports should be communicated to the Court or notified to the parties concerned.

B —. Written observations submitted by the Government of the Federal Republic of Germany

(a). The German Government refers of all to the historical background to heading 20.06. It maintains that preserved fruit under heading 20.06 has always posed particular problems for customs administrations since the sugar content constitutes an important economic component of the products in question. This is why in certain Member States since the fifties a distinction has been made within this heading between products with added sugar and products without added sugar.

(b). The German Government then expressed the view with regard to the meaning of the word gelten appearing in No 2 of the Additional Notes to the Common Customs Tariff (German version) that it may not be interpreted as a presumption capable of being rebutted by evidence to the contrary.

(c). By means of technical considerations, supported by an expert opinion appended to its statement, the German Government also remarks that there is no technical process which can determine the origin of sugar by analysing it. With regard to prepared fruit it is in fact impossible to determine whether the sugar has been added or not since the total sugar content comes within the margin of the fluctuation in the natural sugar content of the various fruits.

(d). The German Government submits that the reply to the national court should be as follows :

C —. Written observations submitted by the Commission of the European Communities

(a). In support of this view the Commission invokes the historical precedents for the relevant provisions of the Common Customs Tariff.

(b). These considerations are also confirmed by an approach based on logic and the establishment of the concepts of the customs tariff. The expression fruit containing added sugar in Additional Note No 2 to Chapter 20 cannot be interpreted in accordance with its ordinary meaning; in Chapter 20 it has a specific meaning which was exhaustively defined by the legislature in this note. From the point of view of draftsmanship it would in fact be impossible to conceive of the Common Customs Tariff, and from the practical point of view of its application by the customs authorities the tariff would be useless, if the possibility of creating specific concepts, in the form of legal fictions, were ruled out.

(c). It is moreover impossible for technical reasons to distinguish natural sugar from added sugar and for this reason the legislature had recourse to the fiction contained in Additional Note No 2. On this point the Commission refers to its observations in Case 3/71 and produces an expert opinion in support. If the Court considers it necessary to settle this point or if it has doubts as to the accuracy of this opinion, the Commission requests the Court to order a fresh expert opinion. If the conclusions of the expert opinion submitted are regarded as correct, the Commission considers that an interpretation of Additional Note No 2 as constituting a simple presumption is unfounded since reversing the burden of proof involves

(d). Finally with regard to the effect of the judgment in Case 3/71 on the present proceedings the Commission raises the question whether such a judgment can be upheld in that it could not have taken account of a fact — that chemical analysis cannot distinguish added sugar in preserved fruit from natural sugar — which the Court did not know or at any rate did not know with the same accuracy and certainty as it does today. If the Court were however to think reconsideration unnecessary or, after reconsideration, were to uphold that judgment, the decision to be taken in the present case would in no way be prejudiced.

1. By an order of 15 October 1971 received at the Registry on 9 November 1971 the Finanzgericht Hamburg referred to the Court under Article 177 of the EEC Treaty two questions on the interpretation of certain tariff subheadings of Chapter 20 of the Common Customs Tariff in conjunction with Additional Note No 2 to this chapter.

2. In the first question the Court is asked to rule whether the wording of subheading 20.06 B II(a) 6(bb) of the Common Customs Tariff read together with Additional Note No 2 to Chapter 20 must be interpreted to mean that when fruit, other than pineapples and grapes, in this case apricots, referred to under heading 20.06 of the tariff has a sugar content exceeding 9 % but less than 13 % it is liable to the higher rate prescribed for fruit with added sugar regardless of whether sugar has been added.

3. Tariff headings 20.06 B II(a) 6(bb) and 20.06 B II(c) 1 (aa) of the Common Customs Tariff apply respectively to products containing added sugar and not containing added sugar subjecting them to different customs duties. According to Additional Note No 2 appearing at the beginning of Chapter 20 of the Common Customs Tariff laid down in Regulation No 2451/69 of the Council of 8 December 1969 (JO L 311, 1969) the products under heading 20.06 shall be considered as containing added sugar if their sugar content exceeds 9 % by weight according to the kind of fruit concerned.

4. The plaintiff in the main action maintains that this note merely establishes a presumption as to the classification which may be rebutted by evidence to the contrary.

5. Such an argument fails to observe the independent nature of the provisions of the common organization of the agricultural markets.

6. Since agreements regarding the Common Customs Tariff were reached between the Community and its partners in GATT the principles underlying those agreements may be of assistance in interpreting the rules of classification applicable to it.

7. The absolute nature of this criterion emerges yet more clearly from the conditions relating to the right of the Community to make limited exceptions to the principle of consolidation of customs duties.

8. This conclusion is confirmed with particular regard to the Community by the section of the Common Customs Tariff approved by the Decision of the Council of 13 February 1960 (JO 80 A 1960) and referring inter alia to the products under heading 20.06.

9. It is clear from those considerations as a whole that Additional Note No 2 to Chapter 20 of the Common Customs Tariff is to be understood as a classification provision based exclusively on the sugar content of the relevant products in excess of certain percentages by weight.

10. The second question is superfluous since an affirmative reply has been given to the first question.

11. The costs incurred by the Government of the Federal Republic of Germany and by the Commission of the European Communities which submitted observations to the Court are not recoverable and since 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 national court the decision on 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 oral observations of the undertaking Interfood GmbH, the Government of the Federal Republic of Germany and the Commission of the European Communities; Upon hearing the opinion of the Advocate-General; Having regard to the Treaty establishing the European Economic Community, especially Article 177; Having regard to the Decision of the Council of 13 February 1960 (JO. 80A, 1960); Having regard to the Regulations of Council No 865/68 of 28 June 1968 (OJ L 153, English Special Edition 1968 (I), p. 225) and No 2451/69 of 8 December 1969 (JO. L 311, 1961); Having regard to the Protocol on the Statute of the Court of Justice of the EEC, 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 Finanzgericht Hamburg in accord-with the judgment delivered by that court on 15 October 1971, hereby rules: